What changed in this filing

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Item 1A. Risk Factors

2026-05-27 compared with 2025-05-21 · 102 added, 57 removed, 194 unchanged (45% of the section changed)

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However, the risks set forth below and elsewhere in this report, as well as other risks currently unknown or deemed immaterial at the date of this report, could materially adversely affect us and cause our financial results to vary materially from recent or anticipated future results.

These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future.

References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future .

Economic uncertainties

Economic, political, and general market conditions could adversely affect our business, financial position, results of operations and cash flows.

We operate in 16 countries on four continents and serve customers in a wide array of commercial, industrial, HVAC&R, and vehicular markets.

We operate in numerous countries on four continents and serve customers in a wide array of commercial, industrial, HVAC&R, and vehicular markets.

As such, our business is impacted by general economic, political, and industry conditions globally as well as in the regions and countries in which we conduct business.

We are subject to the risk of disruptions or significant deterioration in market conditions, which could have a material impact on our business, financial position, results of operations and cash flows.

Military conflicts, including the ongoing conflicts in Ukraine and in the Middle East and heightened tension in the Red Sea, could negatively impact or cause significant business disruptions in the global markets we operate in.

Geopolitical tensions and military conflicts, including the conflict between the U.S.

and Iran, as well as related regional instability or proxy conflicts, could negatively impact or cause significant business disruptions in the global markets we operate in.

Ongoing conflicts and any potential further escalation, could lead to significant disruption near major oil producing regions or in shipping corridors and could result in higher energy and fuel prices, shipping delays, increased freight and manufacturing costs, and increased cyberattacks from state-sponsored or other actors.

Such developments could also contribute to broader inflationary pressures across the global economy and supply chains, including increased costs for materials, transportation and labor, which may not be fully recoverable through pricing and could impact the availability, reliability, and overall viability of certain supply sources.

In addition, customer demand for our products and system solutions is impacted by the overall strength of the economy, employment levels, consumer confidence levels, the availability and cost of credit, and the cost of fuel.

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Changes in U.S.

or international trade policies, including the imposition or increases in tariffs, could adversely affect our business, financial position, results of operations and cash flows.

or international trade policies, including the imposition of or increases in tariffs, could adversely affect our business, financial position, results of operations and cash flows.

There is uncertainty regarding future relationships between the U.S.

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social, political, regulatory and economic conditions or in laws and policies related to foreign trade in countries where we currently manufacture and sell our products, and any resulting negative sentiments towards the U.S., could adversely affect our business, financial position, results of operations and cash flows.

Additional risks related to international trade policies and related matters are discussed throughout this section.

In February 2026, the U.S.

Supreme Court ruled that tariffs imposed in 2025 under the International Emergency Economic Powers Act were invalid (the “IEEPA Ruling”).

However, other tariffs remain in effect and trade policies are unpredictable.

There is also uncertainty with regard to the IEEPA Ruling, including the availability and timing of refunds, the potential for new tariffs to be invoked under alternative laws, the impacts on trade agreements between the U.S.

and other countries, and the expectations of customers, suppliers, and others impacted by the tariffs.

In addition, the rapid evolution, reversal, or replacement of trade measures following the IEEPA Ruling may contribute to increased policy volatility and uncertainty, which could complicate planning, pricing, sourcing, and contractual arrangements.

Additional risks and uncertainties related to international trade policies and related matters are discussed throughout this section.

A future widespread outbreak of an illness or other public health threat could adversely affect our business, financial position, results of operations and cash flows.

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Customer and supplier matters

Increases in costs of materials, including aluminum, copper, steel and stainless steel (nickel), other raw materials and purchased components, could place significant pressure on our results of operations.

Increases in the costs of raw materials and other purchased components, which may be impacted by a variety of factors, including changes in trade laws, tariffs, sanctions, inflation, geopolitical and military conflicts, the behavior of our suppliers and significant fluctuations in demand, could have a significant negative impact on our results of operations.

Increases in the costs of raw materials and other purchased components, which may be impacted by a variety of factors, including changes in trade laws, tariffs, sanctions, geopolitical and military conflicts, inflation, the behavior of our suppliers and significant fluctuations in demand, could have a significant negative impact on our results of operations.

In the shorter-term, our ability to adjust for cost increases is limited when prices are fixed for current orders.

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We regularly engage with our suppliers to ensure availability of purchased commodities and components used in manufacturing our products.

We use a limited number of suppliers for certain components, including aluminum, copper, steel and stainless steel (nickel).

We use a limited number of suppliers for certain raw materials, including aluminum, copper, steel and stainless steel (nickel), and third-party parts and components required to make our products.

We select our suppliers based upon total value (including price, delivery and quality), taking into consideration their production capacities, financial condition and willingness and ability to meet our demand.

In some cases, it can take several months or longer to identify and accept a new supplier due to qualification requirements.

Strong demand, the potential effects of trade laws and tariffs, sanctions, capacity constraints, financial instability, geopolitical and military conflicts, public health crises, such as pandemics and epidemics, or other circumstances experienced by our suppliers could result in shortages or delays in their supply of product to us, or a significant price increase resulting in our need to resource to a different supplier.

In some cases, it can take several months, or longer, to identify and accept a new supplier due to qualification and/or customer approval requirements.

Strong or rapidly increasing demand, including significant or unanticipated increases in demand for certain components driven by elevated levels of capital investment in end markets such as data centers, as well as the potential effects of trade laws and tariffs, sanctions, geopolitical and military conflicts, capacity constraints, financial instability, public health crises, such as pandemics and epidemics, or other circumstances experienced by our suppliers could result in shortages or delays in their supply of product to us, or significant price increases.

In certain cases, such demand may exceed available market supply for key components, limiting our ability to obtain sufficient quantities from existing or alternative suppliers.

We began experiencing supply shortages of certain data center product components in the fourth quarter of fiscal 2026, which are negatively impacting our production schedules for the first quarter of fiscal 2027.

If we experience significant or prolonged shortages of critical components or materials from our suppliers and could not procure the components or materials from other sources, we may be unable to meet our production schedules and could miss product delivery dates, which would adversely affect our sales, results of operations, cash flows and customer relationships.

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If our pricing strategy results in winning less new business, our results of operations and cash flows could be adversely affected.

Climate change and environmental, social, and governance (“ESG”) risks

Global climate change and related emphasis on ESG matters by various stakeholders could negatively affect our business.

Increased public awareness and concern regarding links between greenhouse gas emissions and global climate changes may result in more regional and/or federal requirements to reduce or mitigate the effects of greenhouse gas emissions.

There continues to be ambiguity regarding the promulgation and enforcement of climate change regulations, which creates uncertainty in the markets in which we operate.

Climate and sustainability risks

Global climate change and related emphasis on sustainability goals by various stakeholders could negatively affect our business.

There continues to be ambiguity regarding the promulgation and enforcement of climate-related regulations, which creates uncertainty in the markets in which we operate.

This uncertainty extends to the use or adoption rate of many products within our product portfolio and our overall costs of regulatory compliance, which may impact the demand for our products and/or may require us to make increased capital expenditures to meet new standards and regulations.

Further, our customers, other market participants, or government entities may impose emissions or other environmental standards upon us through regulation, market-based emissions policies or consumer preference that we may not be able to timely meet, or which may not be economically feasible for us, due to the required level of capital investment or required speed of technological advancement.

Additionally, climate changes, such as extreme weather conditions, create financial risk and uncertainty for our business.

For example, the demand for our products and services may be affected by unpredictable or unseasonable weather conditions.

Climate changes could also disrupt our operations by impacting the availability and cost of materials needed for manufacturing and could increase our insurance and other operating costs.

In addition, natural disasters or extreme weather events, including those as a result of climate change, could disrupt our manufacturing operations and our ability to manufacture and deliver products to our customers and adversely impact our results of operations and cash flows.

We could also face indirect financial risks passed through the supply chain, and process disruptions due to climate changes could result in price modifications for our products and the resources needed to produce them.

Furthermore, customer, investor, and employee expectations for ESG matters have been rapidly evolving.

Specifically, certain customers are requiring information on our environmental sustainability goals and commitments, which we have not yet released publicly.

There can be no assurance of the extent to which any of our future goals will be achieved, or that any investments we make in furtherance of achieving any such plans, targets, goals or other commitments will meet regulatory or legal standards regarding sustainability performance or any customer, investor, employee or other stakeholder expectations and desires regarding such goals or commitments.

Additionally, the enhanced stakeholder focus on ESG matters requires the continuous monitoring of evolving expectations, tolerances, and standards, as well as reporting requirements and disclosures associated with ESG-related goals and initiatives.

Some stakeholders may disagree with our ESG initiatives and goals, as the political climate and investor sentiment changes over time.

Stakeholders and regulators may also hold divergent opinions on ESG issues and conflicting expectations regarding our culture, values, goals and business, which may affect how we are regulated or perceived.

Moreover, we may determine that it is in the best interest of the Company and our shareholders to prioritize other business investments over the achievement of our current ESG goals based on economic or technological developments, regulatory and social factors, business strategy or pressure from investors, activists, or other stakeholders.

Further, our customers, other market participants, or government entities may impose emissions or other environmental standards upon us through regulation, market-based emissions policies or consumer preference that we may not be able to meet on a timely or cost-effective basis, due to the required level of capital investment or pace of technological advancement.

Climate changes, such as extreme weather conditions, also create financial risk and uncertainty for our business.

Demand for our products and services may be affected by unpredictable or unseasonable weather conditions.

Climate changes could also disrupt our operations by impacting the availability and cost of materials and resources needed for manufacturing and could increase our insurance and other operating costs.

In addition, natural disasters or extreme weather events, including those as a result of climate changes, could disrupt our manufacturing operations and our ability to manufacture and deliver products to our customers and adversely impact our results of operations and cash flows.

Increased stakeholder focus on sustainability matters requires the continuous monitoring of evolving expectations, standards, and disclosure requirements across jurisdictions.

Certain customers are requiring information on our environmental sustainability goals and commitments, which we have not released publicly.

Stakeholders may hold divergent or changing views on sustainability initiatives, particularly in light of evolving political and market dynamics.

There can be no assurance that our future plans, targets, goals or other commitments will be achieved or that related investments will meet applicable regulatory or stakeholder expectations.

A failure to adequately meet stakeholder expectations may result in the loss of business, diluted market valuation, an inability to attract and retain customers or an inability to attract and retain top talent.

Likewise, a failure to comply with any current or future ESG reporting requirements, as established by regulators in the U.S., Europe and beyond, may result in the loss of business, regulatory penalties, litigation, and/or reputational damage.

Likewise, a failure to comply with any current or future sustainability reporting requirements, as established by regulators in the U.S., Europe and beyond, may result in the loss of business, regulatory penalties, litigation, and/or reputational damage.

Competitive environment

Continued and increased competition could adversely affect our business and our results of operations.

We experience competition from suppliers in other parts of the world that enjoy economic advantages, such as lower labor costs, lower health care costs, lower tariff or tax rates, lower costs associated with legal compliance, and, in some cases, export or raw materials subsidies.

We experience competition from companies in other parts of the world that enjoy economic advantages, such as lower labor costs, lower health care costs, lower tariff or tax rates, lower costs associated with legal compliance, and, in some cases, export or raw materials subsidies.

In addition, consolidation and vertical integration within the supply base have introduced new or restructured competitors to our markets.

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We have manufacturing and technical facilities located in North America, South America, Europe, and Asia.

Our global operations are subject to complex international laws and regulations and numerous risks and uncertainties, including changes in monetary and fiscal policies, including those related to tax and trade, cross-border trade restrictions or prohibitions, import or export duties or other charges or taxes, fluctuations in foreign currency exchange and interest rates, inflation, changing economic and employment conditions, changes in foreign visitor and immigration policies, public health crises, unreliable intellectual property protection and legal systems, insufficient infrastructures, social unrest, political instability and disputes (including, for example, impacts of the military conflicts in Ukraine and in the Middle East and heightened tension in the Red Sea), incompatible business practices, and international terrorism.

Our global operations are subject to complex international laws and regulations and numerous risks and uncertainties, including changes in monetary and fiscal policies, including those related to tax and trade, cross-border trade restrictions or prohibitions, import or export duties or other charges or taxes, fluctuations in foreign currency exchange and interest rates, inflation, changing economic and employment conditions, changes in foreign visitor and immigration policies, public health crises, unreliable intellectual property protection and legal systems, insufficient infrastructures, social unrest, political instability and disputes (including, for example, impacts of the military conflicts and tensions in the Middle East and Ukraine), incompatible business practices, and international terrorism.

Changes in policies or laws governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we either manufacture products or buy raw materials, such as Mexico, China, and Canada, could have a material adverse impact on our results of operations.

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government or those abroad that restrict or prohibit sales to or purchases from specific persons or countries or based upon product classification may expose us to potential criminal and civil sanctions to the extent that we are alleged or found to be in violation, whether intentional or unintentional.

In connection with the military conflict in Ukraine, governments in the U.S.

and abroad extended and expanded sanctions against Russia and entities known to be supporting Russian interests, including on certain companies located in countries in which we operate, including China, Germany, and Serbia.

We do not have manufacturing operations in Ukraine or Russia nor any significant business relationships in or associated with Ukraine or Russia, however we are continuing to monitor the sanctions requirements and reacting as necessary to ensure compliance.

In connection with the military conflict with Iran, the U.S.

government has expanded sanctions against Iran, including entities involved in Iran’s oil transportation infrastructure and countries that trade with Iran.

In addition, governments in the U.S.

and abroad have extended and expanded sanctions against Russia and entities known to be supporting Russian interests, including on certain companies located in countries in which we operate, including China, Germany, and Serbia.

We do not have manufacturing operations in the Middle East, Ukraine, or Russia, nor any significant business relationships in or associated with Iran, Ukraine or Russia, however we are continuing to monitor the sanctions requirements and reacting as necessary to ensure compliance.

We cannot predict future regulatory requirements to which our business operations may be subject or the manner in which existing laws might be administered or interpreted.

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In recent years, there has been a substantial increase in the global enforcement of anti-corruption laws.

In the event that we believe our employees or agents may have violated applicable anti-corruption laws, or if we are subject to allegations of any such violations, we may have to expend significant time and financial resources toward the investigation and remediation of the matter, which could disrupt our business and result in a material adverse impact on our financial condition, results of operations and reputation.

Challenges of maintaining a competitive cost structure

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As we progress towards our vision of a “new” Modine by applying 80/20 principles across our businesses to focus resources on products and markets with the highest sustainable growth opportunities and return profiles, it is imperative that we effectively and efficiently manage our operations in response to sales volume changes.

This includes ramping up and maintaining adequate production capacity to meet demand in our growing businesses, while also completing restructuring activities, including targeted headcount reductions and product line transfers, in order to optimize our manufacturing footprint and cost structure, particularly in light of changes in our mix of business and in areas where we are strategically refraining from further investments.

This includes ramping up and maintaining adequate production capacity to meet demand in our growing businesses, particularly in Data Centers, and completing restructuring activities, including transferring production for certain product lines among our facilities, to both support our growth initiatives and optimize our manufacturing footprint.

Our successful execution of these initiatives and our ability to optimize and maintain competitive cost structures, is critical in sustaining our long-term competitiveness.

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Significant technological developments by our competitors or others also could adversely affect our business and results of operations.

Changes in the adoption rate for newer technologies could adversely affect our business.

Changes in or shifts in the adoption rate of technologies or products that we expect to drive future sales growth, including technology related to electric vehicles, could adversely affect our results of operations and financial condition.

For example, under the current U.S.

administration, there is uncertainty in the marketplace regarding future federal funding related to electrification, and in particular, the adoption of electric vehicles.

Government policies and funding legislation in the U.S.

and Europe significantly influence the rate of investments in electric vehicles, and the infrastructure necessary for wide-scale adoption of alternative powertrains.

If technology adoption rates slow or are significantly delayed, our sales growth in these areas of our business could be limited.

Developments or assertions by or against us relating to intellectual property rights could adversely affect our business.

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We regularly launch new products and system designs at our facilities across the world.

The success of these launches is critical to our business.

The success of these launches is critical to our business and results of operations.

We design technologically advanced products and systems, and the processes and time required to develop, design and produce these products and systems can be lengthy, difficult and complex.

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Due to our high level of launch activity, we must appropriately manage these activities and deploy our capital and operational and administrative resources to take advantage of the resulting increase in our business.

If we do not successfully or timely launch new products, systems and programs, we may lose market share or damage relationships with our customers, which could negatively affect our business.

In addition, any failure in our manufacturing strategy for these new products or programs could result in operating inefficiencies or asset impairment charges, which could adversely affect our results of operations.

If we do not successfully or timely launch new products, systems and programs, we may lose market share or damage relationships with our customers, which could negatively affect our business and results of operations.

In addition, vehicular OEM customers often request that we pay for design, engineering and tooling costs that are incurred prior to the start of production and recover these costs through amortization in the piece price of the product.

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Despite network and other cybersecurity measures we and our service providers have in place, IT systems could be damaged, compromised, or interrupted by intentional or unintentional events or natural disasters.

We could also be negatively impacted by a cybersecurity breach from computer viruses, ransomware, phishing, break-ins or similar disruptions.

Cybersecurity risk may be heightened by the increased prevalence of hybrid and/or remote work arrangements.

Further, the military conflicts in Ukraine and the Middle East, as well as current geopolitical uncertainties involving Russia, Iran and China, among other nations, may increase the threat of cyberattacks on the global financial markets, supply chain, and IT infrastructure, which could directly or indirectly have an adverse impact on our operations and cash flows.

We could also be negatively impacted by a cybersecurity breach from malware, ransomware, phishing, unauthorized access or similar disruptions.

Cybersecurity risk may be heightened by the increased prevalence of hybrid and/or remote work arrangements, mergers, acquisitions and dispositions, rapid business growth activities, and reliance on third-party service providers.

Further, the military conflicts in the Middle East and Ukraine, as well as current geopolitical uncertainties involving Russia, Iran and China, among other nations, may increase the threat of cyberattacks on the global financial markets, supply chain, and IT infrastructure, which could directly or indirectly have an adverse impact on our results of operations and cash flows.

A material breach or a substantial disruption in our IT systems for a prolonged time period, or the failure of one or more legacy IT systems no longer supported by service providers, could result in delays in receiving inventory and supplies or filling customer orders.

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In addition, potentially material expenditures could be required in order for our products and operations to comply with evolving environmental, health and safety laws, regulations (including those developed as a concern to climate control), or other requirements that may be adopted or imposed in the future.

Future costs to remediate contamination or to comply with environmental, health and safety laws and regulations could adversely affect our business, results of operations and financial condition.

Future costs to remediate contamination or to comply with environmental, health and safety laws and regulations could adversely affect our business, financial condition, results of operations and cash flows.

Claims and litigation

We may incur material losses and costs as a result of warranty and product liability claims and litigation or other legal proceedings.

In the event our products or systems fail to perform as expected, we are exposed to warranty and product liability claims and may be required to participate in a recall or other field campaign of such products.

Many of our vehicular customers offer extended warranty protection for their vehicles and pressure their supply base to extend warranty coverage as well.

If our customers demand higher warranty-related cost recoveries, or if our products fail to perform as expected, it could have a material adverse effect on our results of operations and financial condition.

In the event our products or systems fail to perform as expected or our testing and quality control processes do not detect quality issues or defects, including those related to components manufactured by third parties, we could be exposed to warranty and product liability claims.

We could incur significant expenses associated with the recall, repair, and/or replacement of our products.

In addition, we could incur significant expenses resulting from product liability claims, including for personal injury or property damage.

Any such incidents could require significant time and resources to resolve.

Product warranty and liability claims could have a material adverse effect on our financial condition, results of operations, cash flows and reputation.

We are also involved in various legal proceedings from time to time incidental to our business.

If any such proceeding has a negative result, it could adversely affect our business, results of operations, financial condition and reputation.

If any such proceeding has a negative result, it could adversely affect our business, financial condition, results of operations, cash flows and reputation.

STRATEGIC RISKS

Business optimization and growth strategies

Pending Reverse Morris Trust transaction

The pending Reverse Morris Trust transaction with Gentherm is subject to various risks and uncertainties.

There can be no assurance that it will be completed on the terms and timeline planned, if at all, and it will result in significant costs to the Company.

The pending spin-off of our Performance Technologies segment businesses and simultaneous combination with Gentherm may not be completed as currently planned.

Completion of the Reverse Morris Trust transaction is subject to the satisfaction or waiver of a number of conditions, including the approval of Gentherm’s shareholders and regulatory approvals.

There can be no assurance that we will receive the required approvals in a timely manner or at all.

The completion of the pending Reverse Morris Trust transaction is also subject to obtaining opinions and a private letter ruling from the IRS regarding its qualification as a tax-free transaction for U.S.

federal income tax purposes.

In addition, we may experience greater than expected difficulties in separating the Performance Technologies segment businesses from our other businesses.

Any significant delays in completing the transaction may increase the amount of fees and resources spent on the transaction and the risk that it may not be completed.

We have and will continue to incur costs related to the transaction, including legal, accounting, tax, and other professional fees, whether or not the transaction is completed.

If the transaction is not completed or not completed in the timeframe expected, our business, financial results and market price of our shares could be adversely affected.

We are subject to risks and uncertainties while the Reverse Morris Trust transaction with Gentherm is pending.

Uncertainties regarding the impacts of the pending Reverse Morris Trust transaction with Gentherm on our employees, customers, and suppliers could adversely affect our business and results of operations.

Our employees may be distracted due to uncertainty regarding their future roles and we may face challenges in attracting, retaining and motivating key employees.

Our suppliers or customers may delay or defer decisions or may terminate their relationships with us or our Performance Technologies segment businesses, which could adversely affect our sales, results of operations, and cash flows.

Further, the pending transaction will require significant time and attention from management, which could detract from other business concerns.

In addition, potential shareholder litigation in connection with the pending transaction or other litigation, settlements or investigations may affect the timing or occurrence of the pending transaction or result in significant costs of defense, indemnification and liability.

We may be unable to achieve some or all of the anticipated benefits from the pending Reverse Morris Trust transaction with Gentherm.

We may not achieve the financial and operational benefits expected from the pending Reverse Morris Trust transaction.

The transaction might not provide us and our shareholders benefits or value in excess of what might have been realized had we retained the Performance Technologies segment businesses or undertaken a different strategic alternative.

Following the spin-off and merger with Gentherm, our remaining company will be less diversified, with a more concentrated focus on the data center and commercial HVAC&R markets.

As a result, we will be more vulnerable to changing market conditions in these markets, including risks related to the concentration of demand among a limited number of large customers or projects, which could adversely affect our business, results of operations, cash flows and financial condition.

There can be no assurance as to the value of the shares of the combined company to be received by our shareholders in the pending Reverse Morris Trust transaction with Gentherm.

At the time of the spin-off of the Performance Technologies segment businesses, our shareholders are expected to receive newly-issued Gentherm stock, representing ownership of approximately 40 percent of the combined company.

The actual value of the stock to be received by our shareholders will depend on the value of such shares at the time of transaction closing.

Following the merger, the combined company could face difficulties in integrating the businesses, or the combined company could experience difficulties or delays in achieving anticipated revenue and cost synergies or other expected operational and financial benefits.

As a result, our shareholders may not receive the benefits anticipated from the transaction.

Business growth and optimization strategies

We are strategically focused on growing our Data Centers business.

We may not realize the sales growth anticipated to data center customers.

We are making significant investments to support the growth of our Data Centers business.

We have been rapidly expanding manufacturing capacity for data center products, including leasing new manufacturing facilities in the U.S.

and in Canada and purchasing equipment necessary for new and expanded production lines.

The success of our Data Centers business relies on the growth of our current and prospective customers’ data centers.

If the anticipated growth in data center infrastructure does not materialize due to changes in the economy, obstacles related to the availability of power and land resources, changes in the reliance on digital technologies, or other factors, we may not realize the sales growth and the return on our investments that we anticipate.

In addition, we recently entered into a long-term capacity agreement with one of our strategic data center customers, with whom we are party to a confidentiality agreement.

In connection with this capacity agreement, we received a $165 million up-front deposit from the customer to support investments necessary to meet the planned sales volume.

We expect to sell more than $4 billion of data center cooling products to this customer during calendar years 2027 through 2029.

However, there can be no assurance that this customer will purchase the amounts projected.

If this customer or other data center customers terminate, reduce, or defer orders, we may not realize the sales growth anticipated to data center customers and our results of operations and cash flows could be adversely impacted.

Our business strategy includes acquisitions and dispositions.

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If we are unable to successfully execute on further organic growth opportunities or complete acquisitions in the future, our growth may be limited.

There can be no assurance we will be able to identify and complete the purchase of additional attractive acquisition targets, including obtaining financing, if necessary, to facilitate such transactions.

There can be no assurance we will be able to identify and complete the purchase of attractive acquisition targets, including obtaining financing, if necessary, to facilitate such transactions.

Future acquisitions will require integration of operations, sales and marketing, information technology, finance, and administrative functions.

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In addition, future acquisitions could include the issuance of shares of our common stock as all or a portion of the consideration paid to the sellers.

Any such issuance would be dilutive to the interests of our existing shareholders and may adversely affect the market price of our shares.

Any such issuance of shares would be dilutive to the interests of our existing shareholders and may adversely affect the market price of our shares.

We may also seek to sell or otherwise exit portions of our business that do not align with our strategic plan.

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For our annual goodwill impairment tests, we use estimates and assumptions, including revenue growth rates and operating profit margins to calculate estimated future cash flows and risk-adjusted discount rates.

We cannot predict the occurrence of future events or circumstances, including lower than forecasted revenues, market trends that fall below our current expectations, actions of key customers, increases in discount rates, and the continued general economic uncertainties, which could adversely affect the carrying value of goodwill and intangible assets.

We cannot predict the occurrence of future events or circumstances, including lower than forecasted revenues, market trends that fall below our current expectations, actions of key customers, increases in discount rates, and general economic uncertainties, which could adversely affect the carrying value of goodwill and intangible assets.

An impairment of a significant portion of goodwill or intangible assets could adversely impact our results of operations.

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We are dependent upon the health of the customers and markets we serve.

We are highly susceptible to unfavorable trends or disruptions in the markets we serve, as our customers’ financial condition and performance are affected by demand for their goods or services, regulatory initiatives and incentives and general economic conditions, including supply chain challenges, access to credit, the price of fuel and electricity, employment levels and trends, interest rates, labor relations issues, regulatory requirements and incentives, technology demands and advancements, government-imposed restrictions relating to health crises or other unusual events, trade agreements and other market factors, as well as by customer-specific issues.

We are highly susceptible to unfavorable trends or disruptions in the markets we serve, as our customers’ financial condition and performance are affected by demand for their goods or services, regulatory initiatives and incentives and general economic conditions, including supply chain challenges, access to credit, the price of fuel and electricity, employment levels and trends, interest rates, labor relations issues, regulatory requirements and incentives, technology demands and advancements, government-imposed restrictions relating to health crises or other events, trade agreements and other market factors, as well as by customer-specific issues.

Any significant decline in demand for our products and solutions, including those driven by end-market demands or demand for our customer’s products or services, by current and future customers could result in asset impairment charges and a reduction in our sales, thereby adversely impacting our results of operations, cash flows and financial condition.

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What changed 10-K

Item 1A. Risk Factors