What changed in this filing

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Item 1A. Risk Factors

2024-11-14 compared with 2023-11-16 · 78 added, 51 removed, 389 unchanged (25% of the section changed)

9 unchanged sentences

Our visibility into future demand is generally limited and forecasting is difficult, and we believe historic, industry-wide volatility will persist.

The ongoing Israel-Hamas war may adversely affect our business, financial condition or results of operations.

International political instability, geopolitical tensions, terrorist acts and acts of war may adversely affect our business, financial condition or results of operations.

The threat of terrorism or acts of war, risks and rumors of war, escalation and civil disturbances, including the prolonged tensions in the Middle East and the Ukraine/ Russia conflict, increases the uncertainty in our markets and could adversely affect our business.

On October 7, 2023, an escalated armed conflict between Israel and the Hamas terrorist organization commenced, leading to a series of extended hostilities along Israel’s border with the Gaza Strip.

Additionally, since October 8, 2023, the Hezbollah militant group has increased its hostilities against Israel over its northern region, including Haifa.

Additionally, since October 8, 2023, the Iran-backed Hezbollah militant group has increased its hostilities against Israel over its northern region, including Haifa.

The situation in Northern Israel and Southern Lebanon remains highly tense and volatile.

Many multinational companies in the semiconductor industry have research, design and development centers situated in Israel, including our Company, which has a manufacturing facility and a business office in Haifa.

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While we are currently maintaining business and operations in Israel without material damage or interruptions at our Israeli facility, our assets and operations in Israel could be vulnerable to future property damage, inventory loss, business disruption, and expropriation.

We have around 70 employees in Israel.

While to our knowledge, there have been no reported casualties or injuries to our employees as of the date of this report, some of our Israeli employees have been mobilized as members of the Israeli military reserves to active duty.

We have approximately 70 employees in Israel.

The ongoing war could cause harm to our employees and otherwise impair their ability to work for extended periods of time, as well as disrupt supply chains, transport networks, telecommunications and financial systems, and other critical infrastructure necessary to conduct business in Israel.

In late September 2024, missiles fired by the Iran-backed Hezbollah militant group were seen being intercepted by Israeli air defense system over the city of Haifa.

As the intensity of the war has been rapidly evolving, including the potential for heightened geopolitical tensions in the Middle East, we continue to receive and review reports concerning our operations and business partners and remain vigilant.

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• reliability or quality issues with certain key subassemblies provided by single source suppliers as to which we may not have any short-term alternative;

• shortages caused by disruptions at our suppliers and subcontractors for a variety of reasons, including public health emergencies and associated containment measures, war or geopolitical tensions (such as the Israel-Hamas war, tensions in the Middle East and the Ukraine/Russia conflict), significant natural disasters (including as a result of climate change) or significant price changes (including as a result of inflationary pressures);

• shortages caused by disruptions at our suppliers and subcontractors for a variety of reasons, including public health emergencies and associated containment measures, war or geopolitical tensions (such as the prolonged tensions in the Middle East and the Ukraine/Russia conflict), significant natural disasters (including as a result of climate change) or significant price changes (including as a result of inflationary pressures);

• delays in the delivery of raw materials or subassemblies, which, in turn, may delay shipments to our customers;

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If any of these risks were to materialize, we might be unable to deliver our products to our customers on time and at expected cost, or at all.

While we observed some easing of the industry-wide supply constraints towards the end of fiscal 2022 and in fiscal 2023, we expect some constraints to continue and the duration of such constraints or their long-term impact on our business cannot be predicted at this time.

While we observed some easing of the industry-wide supply constraints in fiscal 2024, we expect some constraints to continue from time to time and the duration of such constraints or their long-term impact on our business cannot be predicted at this time.

As part of our supply chain management, we may from time to time increase our inventory levels to mitigate against anticipated future component shortages.

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• timing and extent of our research and development efforts;

• severance, restructuring, and other costs of relocating facilities;

• inventory write-offs due to obsolescence or other causes;

• severance, restructuring, and other costs of relocating our manufacturing or warehouse facilities;

• inventory write-offs due to obsolescence, project cancellations or other causes;

• an increase in the cost of labor or materials.

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Our average selling prices usually decline over time and may continue to do so.

Typically, our average selling prices have declined over time due to continuous price pressure from our customers and competitive cost reductions in our industry’s supply chains.

Typically, our average selling prices have declined over time due to continuous price pressure from our customers, our competitors and general cost reductions within our industry’s supply chains.

The Chinese government’s initiatives around self-sustainability are propelling China to expand its domestic manufacturing capacity.

With considerable incentives from the Chinese government, manufacturers based in China are able to lower selling prices, thereby increasing overall competition.

This has resulted in a lowering of our average selling prices in China.

We seek to offset this decline by continually reducing our cost structure by consolidating operations in lower cost areas, reducing other operating costs, by pursuing product strategies focused on product performance and customer service, and developing new products for which we are able to charge higher prices.

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The semiconductor equipment and packaging materials industries are very competitive.

In the semiconductor equipment industry, significant competitive factors include price, speed/throughput, production yield, process control, delivery time, innovation, quality and customer support.

In the semiconductor equipment industry, significant competitive factors include price, speed/throughput, production yield, process control, footprint, delivery time, innovation, quality and customer support.

In the semiconductor packaging materials industry, significant competitive factors include price, delivery and quality.

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suppliers for materials and components used in our products, and substantially all of our manufacturing operations are located in countries other than the U.S.

We manufacture our ball, wedge and APAMA TM bonders in Singapore, our Hybrid and Electronic Assembly solutions in the Netherlands, our dicing blades, capillaries and bonding wedges in China, our capillaries in Israel and China, and our advanced dispensing equipment in Taiwan.

We currently manufacture our ball, wedge, APAMA TM and APTURA TM bonders in Singapore, our Hybrid and Electronic Assembly solutions in the Netherlands, our dicing blades, capillaries and bonding wedges in China, our capillaries in Israel and China, and our advanced dispensing equipment in Taiwan.

We also rely on independent foreign distribution channels for certain of our product lines.

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• less protective foreign intellectual property laws, and the enforcement of patent and other intellectual property rights;

• longer payment cycles in foreign markets;

• longer payment cycles in foreign markets and potential default risks;

• foreign exchange restrictions and capital controls, monetary policies and regulatory requirements;

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• possible disagreements with tax authorities;

• episodic events outside our control such as, for example, outbreaks of coronaviruses, influenza or other illnesses;

• episodic events outside our control such as, for example, outbreaks of coronaviruses, influenza, monkeypox or other illnesses;

• natural disasters such as earthquakes, fires or floods, including as a result of climate change;

• war, risks and rumors of war and civil disturbances, including the Israel-Hamas war and the Ukraine/Russia conflict, or other events that may limit or disrupt manufacturing, markets and international trade;

• war, risks and rumors of war and civil disturbances, including the prolonged tensions in the Middle East and the Ukraine/Russia conflict, or other events that may limit or disrupt manufacturing, markets and international trade;

• act of terrorism that impact our operations, customers or supply chain or that target U.S.

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• legal systems which are less developed and may be less predictable than those in the U.S.

In addition, there is a potential risk of conflict and instability in the relationship between Taiwan and China which could disrupt the operations of our customers and/or suppliers in both Taiwan and China, our manufacturing operations in Taiwan and China, and our future plans in the region.

In addition, there remains a potential risk of conflict and instability in the relationship between Taiwan and China which could disrupt the operations of our customers and/or suppliers in both Taiwan and China, our manufacturing operations in Taiwan and China, and our future plans in the region.

Our international operations also depend on favorable trade relations between the U.S.

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Catastrophic events, such as pandemics and extreme weather events as a result of climate change, can have a material adverse effect on our operations and financial results.

Our operations and business, and those of our customers and suppliers, can be disrupted by natural disasters, public health issues, cybersecurity incidents, interruptions of service from utilities, or other catastrophic events including as a result of climate change.

For example, we have at times experienced temporary disruptions in our manufacturing processes as a result of power outages.

Our operations and business, and those of our customers and suppliers, can be disrupted by natural disasters, public health issues, interruptions of service from utilities, or other catastrophic events including as a result of climate change.

In addition, global climate change can result in natural disasters occurring more frequently, with greater intensity and with less predictability.

For example, in September 2023, territories in the East Asian monsoon region, including Guangdong, Hong Kong, Fujian and Taiwan, experienced significant typhoons and storm surges, resulting in a temporary suspension of business and services.

Such temporary suspension of business and services impacted some of the semiconductor factories and suppliers who operate there.

We also operate in seismic zones including Taiwan, which is located within a complex zone of convergence between the Philippines Sea Plate and Eurasian Plate.

For example, in April 2024, a magnitude 7.4 earthquake struck Taiwan, resulting in significant injuries and death, leading to a temporary suspension of business and services.

Although our advanced dispensing manufacturing operations in Taiwan were not affected, the earthquake resulted in the temporary suspension of other semiconductor factories and suppliers who operate in Taiwan.

The long-term effects of climate change on the global economy and the semiconductor industry in particular are unclear but could be severe, and could exacerbate the other risk factors described herein.

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tariffs on Chinese goods and retaliatory Chinese tariffs on U.S.

goods, and there remains significant uncertainty about the future relationship between the U.S.

We cannot predict what further actions may ultimately be taken with respect to tariffs or trade relations between the U.S.

and other countries, what products may be subject to such actions, or what actions may be taken by other countries in response.

Further changes in trade policy, tariffs, additional taxes, restrictions on exports or other trade barriers, or restrictions on supplies, equipment, and raw materials, may limit our ability to produce products, increase our selling and/or manufacturing costs, reduce the competitiveness of our products, or inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial condition.

inhibit our ability to sell products or purchase necessary equipment and supplies, which could have a material adverse effect on our business, results of operations, or financial condition.

Though nearly all of our manufacturing activities take place outside of the U.S., certain of our advanced packaging products are subject to the EAR because they are based on U.S.

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supply chain in its entirety to avoid the application of these regulations.

The rules promulgated by the BIS are typically complex, and the BIS could revise or expand them in response to public comments.

In November 2023, the BIS issued additional rules to update export controls on advanced computing semiconductors and semiconductor manufacturing equipment, as well as items that support supercomputing applications and end-uses, to arms embargoed countries, including China.

We are taking appropriate measures to comply with all applicable BIS Rules.

Where required, we will apply for export licenses from the BIS to avoid disruption to our customers’ operations.

Export licenses may be subject to a prolonged review and appeals process, to which there cannot be an assurance as to whether an export license may be granted, granted with conditions or eventually revoked due to subsequent challenge.

Additionally, the rules promulgated by the BIS are typically complex, and the BIS could revise or expand them in response to public comments.

Likewise, the BIS may issue guidance clarifying the scope of the rules.

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We expect that a small number of customers will continue to account for a high percentage of our net revenue for the foreseeable future.

Thus, our business success depends on our ability to maintain strong relationships with our customers.

Thus, our business success depends on our ability to maintain strong relationships with our customers and closely understand their present and anticipated utilization rates.

Any one of a number of factors could adversely affect these relationships.

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We may also make commitments from time-to-time to our customers regarding minimum volumes and performance standards, and if we are unable to meet those commitments, we may incur liabilities to our customers.

If we lose orders from a significant customer that we are not able to replace, or if a significant customer reduces its orders substantially, or if we incur liabilities for not meeting customer commitments, these losses, reductions or liabilities may materially and adversely affect our business, financial condition and operating results.

If we lose orders from a significant customer that we are not

able to replace, or if a significant customer reduces its orders substantially, or if we incur liabilities for not meeting customer commitments, these losses, reductions or liabilities may materially and adversely affect our business, financial condition and operating results.

We maintain a backlog of customer orders that is subject to cancellation, reduction or delay in delivery schedules, which may result in lower than expected revenues.

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The broad-based weakening in the global macroeconomic environment may result in lower than expected demand for our products, and our inability to sell products after we devote significant resources to them could have a material adverse effect on our levels of inventory, revenues and profitability.

The cancellation and wind down of the Project may adversely affect our business, results of operations and financial condition.

In connection with the cancellation of a project with one of its customers (previously referred to as Project W) (the "Project"), on March 11, 2024, the Company committed to a plan to cease operational activities and commence wind down activities concerning various aspects of the Project.

As of September 28, 2024, the wind down activities have been substantially completed and as a result of these activities, the Company incurred certain charges during fiscal year 2024.

The Company's estimates of the anticipated impact on its results of operations and the timing thereof are subject to a number of assumptions and actual amounts may differ materially from estimates.

As we further wind down the Project, we may discover other facts that could require us to incur additional expenses and/or record additional charges that may be different from our initial expectations about the costs of the wind down.

In addition, we may not be able to complete the wind down in all respects due to factors outside of our control.

If actual amounts were to differ from our estimates, or if the full and complete wind down takes longer than expected, our results of operations and financial condition could be materially and adversely affected.

Cancellations of significant orders or other similar projects by other customers in the future could also cause the Company to incur additional costs or expenses or lead to a reduction in future revenue, which could materially and adversely affect our results of operations.

As a result of the cancellation of the Project, the Company has refocused its development resources towards other growth-centric opportunities supporting technology changes within the thermocompression, Vertical Fan-Out, Automotive and Dispense markets.

The Company may experience operational difficulties as it shifts its development resources to these other opportunities, which may result in disruptions to the Company's operations.

We cannot be certain that these efforts will be effective or successful, or that we will realize the anticipated benefits of the refocus.

As a result, our results of operations and financial condition could be materially and adversely affected.

Human Capital Risks

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Failure to ensure effective transfer of knowledge and smooth transitions involving senior management could hinder our strategic planning and execution.

From time to time, senior management or other key employees may leave our company, and the loss of any key employee could result in significant disruptions to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of company initiatives, the effectiveness of our disclosure controls and procedures and our internal control over financial reporting, and the results of our operations.

From time to time, senior management or other key employees may leave our Company, and the loss of any key employee could result in significant disruptions to our operations, including adversely affecting the timeliness of product releases, the successful implementation and completion of company initiatives, the effectiveness of our

disclosure controls and procedures and our internal control over financial reporting, and the results of our operations.

Changes in immigration policies may also impair our ability to recruit and hire technical and professional talent.

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Alternative packaging technologies have emerged that may improve device performance, reduce the size of or enhance the number of components inherent in an integrated circuit package, as compared to traditional wire bonding.

These technologies include flip chip and wafer-level packaging.

These technologies include hybrid bonding, thermo-compression bonding, flip chip bonding and wafer-level packaging.

Some of these alternative technologies eliminate the need for wires to establish the electrical connection between a die and its package.

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• defending against litigation.

Continued improvement in manufacturing capabilities, control of material and manufacturing quality and costs and product testing are critical factors in our future growth.

Continued improvement in manufacturing capabilities, control of material, emphasis on product safety and manufacturing quality and costs and product testing are critical factors in our future growth.

Our efforts to monitor, develop, modify and implement appropriate tests and manufacturing processes for our products may not be sufficient to permit us to avoid a rate of failure in our products that results in substantial delays in shipment, significant repair or replacement costs, potential damage to our reputation or general customer dissatisfaction with our products.

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Operations and Supply Chain Risks

We may not be able to continue to consolidate manufacturing and other facilities or entities without incurring unanticipated costs and disruptions to our business.

As part of our ongoing efforts to drive further efficiency, we may consolidate our manufacturing and other facilities or entities.

Should we consolidate, we may experience unanticipated events, including the actions of governments, suppliers, employees or customers, which may result in unanticipated costs and disruptions to our business.

We may not be able to continue to consolidate or relocate manufacturing and other facilities or entities without incurring unanticipated costs and disruptions to our business.

As part of our ongoing efforts to drive further efficiency, we may consolidate or relocate our manufacturing and other facilities or entities.

Should we consolidate or relocate, we may experience unanticipated events, including the actions of governments, suppliers, employees, union representatives or customers, which may result in unanticipated costs and disruptions to our business.

We may also incur restructuring charges, severance costs, asset impairments, loss of accumulated knowledge, inefficiency during transitional periods, employee attrition and other effects that could negatively impact our financial condition and results of operations.

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Proper waste disposal plays an important role in the operation of our manufacturing plants.

In many of our facilities we maintain wastewater treatment systems that remove metals and other contaminants from process wastewater.

These facilities operate under permits that must be renewed periodically.

Most of our facilities operate under permits that must be renewed periodically.

A violation of those permits may lead to revocation of the permits, fines, penalties or the incurrence of capital or other costs to comply with the permits, including the potential shutdown of operations.

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The cost of complying, or of failing to comply, with these and other regulatory requirements or contractual obligations could adversely affect our operating results, financial condition and ability to conduct our business.

To the extent that higher costs result in higher prices for our products, we may experience a reduction in the demand for those products, which could negatively affect our results of operations.

In addition, changes in environmental laws and regulations (including any relating to climate change and greenhouse gas (“GHG”) emissions) could require us, or others in our value chain, to install additional equipment, alter operations to incorporate new technologies or processes and generally enhance audit, surveillance and compliance measures.

To the extent that higher costs incurred from the above activities result in higher prices for our products, we may experience a reduction in the demand for those products, which could negatively affect our results of operations.

Conversely, we may not be able to pass these increased costs onto our customers in the form of higher prices, as a result of which our results of operations may also be adversely affected.

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These transactions place additional demands on our management, our various functional teams and our current labor force.

The combination of businesses may result in the loss of key personnel or an interruption of, or loss of momentum in, our existing businesses and/or the acquired business.

The combination of businesses may result in the loss of key personnel or an interruption of, or loss of

momentum in, our existing businesses and/or the acquired business.

In addition, we may need to divest existing businesses, which would cause a decline in revenue or profitability and may make our financial results more volatile.

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From time to time, we create and publish voluntary disclosures regarding ESG matters.

Our sustainability report, currently in its seventh edition and available on our website, continues to outline our Company’s strategies, initiatives and performance of ESG topics identified through a materiality assessment to be most relevant to the operations and stakeholders of our Company.

The identification, assessment, and disclosure of such matters is complex.

Our sustainability report continues to outline our Company’s strategies, initiatives and performance of ESG topics identified through a materiality assessment to be most relevant to the operations and stakeholders of our Company.

In fiscal 2023, we performed an independent, limited external assurance of our direct (Scope 1) and purchased energy indirect (Scope 2) greenhouse gas emission data under the operational control boundary of eight of our global operational sites, and published such limited external assurance in our sustainability report.

However, the identification, assessment, and disclosure of such matters remains complex.

Many of the statements in such voluntary disclosures are based on our expectations and assumptions, which may require substantial discretion and forecasts about costs and future circumstances.

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We remain vigilant and take note of similar products and solutions offered by our competitors and, based on reasonable efforts, investigate whether any of our competitors’ products or solutions is the outcome of unlawful reverse engineering.

For example, we are currently investigating a potential unlawful reverse engineering incident and, where necessary, plan to pursue appropriate legal action against parties that may be involved in such unlawful reverse engineering.

For example, we are currently investigating a

potential unlawful reverse engineering incident and, where necessary, plan to pursue appropriate legal action against parties that may be involved in such unlawful reverse engineering.

Competitors or third parties (including ex-employees violating their surviving contractual obligations with us) may also copy or reverse engineer aspects of our products or solutions through unlawful means, or illegally use information that we regard as proprietary.

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We have experienced, and expect to continue to be subject to, cybersecurity threats and incidents, ranging from employee error or misuse, to individual attempts to gain unauthorized access to information systems, to sophisticated and targeted measures known as advanced persistent threats, none of which have been material to the Company to date.

For example, in May 2024, the Company detected unauthorized access attempts into its network and servers and determined that the threat actor accessed and acquired some of its data, including source code, engineering information, business partner data and personally identifiable information.

The Company believes that this cybersecurity incident has not had a material impact on the Company's operations, and the Company currently does not expect that this incident is reasonably likely to materially impact the Company's overall financial condition, results of operations or business outlook.

Notwithstanding the foregoing, future attempts or breaches might, especially given that threat actors may leverage other means and technologies, including artificial intelligence, to circumvent controls and avoid detection.

We devote significant resources to network security and other measures to protect our systems and data from unauthorized access or misuse.

However, depending on its nature and scope, cybersecurity incidents could result in business disruption;

However, our cybersecurity risk management, process, protocols and tools, may not be fully implemented or may not completely protect the Company against future cybersecurity incidents.

Depending on its nature and scope, cybersecurity incidents could result in business disruption;

misappropriation, corruption or loss of confidential information and critical data (of the Company or that belonging to its third parties);

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In addition, we may not be able to successfully complete the implementation of the new ERP system without experiencing difficulties.

Any disruptions, delays or deficiencies in the design and implementation or the ongoing maintenance of the new ERP system could adversely affect our ability to process orders, ship products, provide services and customer support, send invoices and track payments, fulfill contractual obligations, accurately maintain books and records, provide accurate, timely and reliable reports on our financial and operating results, including reports required by the SEC such as the evaluation of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and otherwise operate our business.

SEC such as the evaluation of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and otherwise operate our business.

Additionally, if we do not effectively implement the ERP system as planned or the system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess it adequately could be delayed.

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Changes to our existing tax incentive in Singapore may materially reduce our reported results of operations in future periods.

Our existing tax incentive, scheduled to expire in our fiscal 2025, allows certain classes of income to be subject to reduced income tax rates in Singapore provided we meet certain employment and investment conditions.

Our existing tax incentive, scheduled to expire in January 2025, allows certain classes of income to be subject to reduced income tax rates in Singapore provided we meet certain employment and investment conditions.

If we cannot, or elect not to, comply with these conditions, we could be required to refund material tax benefits previously realized with respect to this tax incentive.

Subsequent renewals are at the discretion of the Singapore government and we may not be able to extend the tax incentive arrangement beyond its expiration date or we may also elect not to renew this tax incentive arrangement.

In the absence of the tax incentive, the income tax rate in Singapore that would otherwise apply is 17%, which would result in a significant increase in our provision for (benefit from) income taxes in future periods.

There cannot be assurances that we are able to benefit from future tax incentives granted by the Singapore government beyond the expiration of our existing tax incentive.

In the absence of any tax incentive, the income tax rate in Singapore that would otherwise apply is 17%, which would result in a significant increase in our provision for (benefit from) income taxes in future periods.

Changes in tax legislation could adversely impact our future profitability.

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Tax laws and regulations are continuously evolving with corporate tax reform, base-erosion efforts, global minimum tax, and increased transparency continuing to be high priorities in many tax jurisdictions in which we operate.

Although the timing and methods of implementation may vary, many countries, including those in the Asia/Pacific region in which we have significant operations, have implemented, or are in the process of implementing, legislation or practices inspired by the base erosion and profit shifting project undertaken by the Organization for Economic Co-operation and Development (“OECD”).

In December 2021, the OECD issued its guidance on the Global Anti-Base Erosion (“GloBE”) rules with the purpose of ensuring multinational companies pay a minimum level tax on the income generated in each of the jurisdictions where they operate in.

In December 2022, the European Council attained a consensus on Pillar Two of the GloBE rules to implement the 15% global minimum tax, and many EU and G20 countries have specified their plan to adhere to the OECD guidelines as early as fiscal 2025 which may materially impact our income tax expense.

Further, the increased scrutiny on international tax and continuous changes to countries’ tax legislation may also affect the policies and decisions of tax authorities with respect to certain income tax and transfer pricing positions taken by the Company in prior or future periods.

We continue to monitor new tax legislation or other developments since significant changes in tax legislation, or in the interpretation of existing legislation, could materially and adversely affect our financial condition and operating results.

While we do not expect Pillar Two to have a material tax impact in fiscal 2025, we will continue to monitor new tax legislation and other developments since changes in tax legislation, or in the interpretation of existing legislation, could materially and adversely affect our financial condition and operating results.

Other changes in taxation could materially impact our future effective tax rate.

Additionally, our future effective tax rate could be affected by numerous other factors including higher or lower than anticipated foreign earnings in various jurisdictions where we are subjected to tax rates that differ from the U.S.

federal statutory tax rate, by changes in the valuation allowances recorded against certain deferred tax balances, or by changes in accounting principles and reporting requirements, or including the interpretations and application of such accounting principles and reporting requirements.

federal statutory tax rate, by changes in the valuation allowances recorded against certain deferred tax balances, or

by changes in accounting principles and reporting requirements, or including the interpretations and application of such accounting principles and reporting requirements.

Changes in our assertion for foreign earnings, whether permanently or non-permanently reinvested, as a result of changes in facts and circumstances or challenges by tax authorities to our historic or future tax positions and transfer pricing policies, could also significantly adversely impact our future effective tax rate.

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Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on our internal control over financial reporting.

As described in “Part II, Item 9A — Controls and Procedures” of this Annual Report, we previously identified a material weakness in our internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Management has concluded that this material weakness was remediated as of September 30, 2023.

However, one or more material weaknesses may be identified in the future during the evaluation and testing process of our internal controls in future years.

If we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to certify that our internal control over financial reporting is effective, our consolidated financial statements may contain material misstatements and we could be required to revise or restate our financial results.

This could materially and adversely affect our business, results of operations and financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the material weakness, subject us to fines, penalties or judgments, harm our reputation, adversely affect the trading price of our common stock, or otherwise cause a decline in investor confidence.

UNRESOLVED STAFF COMMENTS

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