4 unchanged sentences
A large percentage of our sales have been made to a small number of customers, and the loss of a major customer, if not replaced, would adversely affect us.
−Removed: Our largest customer has accounts for 26.9% and 23.4% of net sales for the years ended December 31, 2021 and 2020, respectively.
+Added: Our largest customer has accounts for 26.9% of net sales in each of the years ended December 31, 2022 and 2021.
The loss of a substantial portion of net sales to our largest customers could have a material adverse effect on us.
We are dependent on suppliers for components and raw materials and may experience shortages, extended lead times, cost premiums and shipment delays that would adversely affect our customers and us.
−Removed: We purchase raw materials, commodities and components for use in our production.
+Added: We purchase raw materials, commodities and components for use in our production process.
Increased costs of these materials could have an adverse effect on our production costs if we are unable to pass along price increases or reduce the other cost of goods produced through cost improvement initiatives.
9 unchanged sentences
We estimate and reserve for any known or potential impact from these possibilities
−Removed: We depend heavily on our people and may from time to time have difficulty attracting and retaining skilled employees.
+Added: We depend heavily on our people and may from time to time have difficulty attracting and retaining skilled employees and the cost of labor may continue to increase.
Our operations depend upon the continued contributions of our key management, marketing, technical, financial, accounting, product development engineers, sales people and operations personnel.
1 unchanged sentence
Not being able to attract or retain these employees could have a material adverse effect on revenues and earnings.
+Added: In addition, the cost of attracting and retaining direct and indirect labor may continue to increase, which will increase our operating costs and may reduce our profitability.
Our engineering revenue depends on our ability to deliver quality value-added engineering services required by our customers.
18 unchanged sentences
Our lack of execution could have an adverse effect on our results of operations and financial condition.
−Removed: We offer a full range of value-added engineering, technical and manufacturing services and support including project management, designing, testing, prototyping, manufacturing, supply chain management and post-market services.
The manufacture and sale of products carries potential risk for product liability claims .
−Removed: We represent and warrant the goods and services we deliver are free from defects in material and workmanship generally for one year.
+Added: We generally are required to represent and warrant to our customers that the goods and services we deliver are free from defects in material and workmanship generally for one year.
If a product liability claim results in our being liable, it could have a material adverse effect on our business and financial position.
11 unchanged sentences
intellectual property and proprietary technology in certain countries, potentially burdensome taxes, crime, employee turnover, staffing, managing personnel in diverse culture, labor instability, transportation delays, and foreign currency fluctuations.
−Removed: Environmental laws could also become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with violation.
−Removed: We operate in environmentally sensitive locations and are subject to potentially conflicting and changing regulatory agendas of political, business, and environmental groups.
−Removed: Changes or restrictions on discharge limits;
−Removed: emissions levels;
−Removed: or material storage, handling, or disposal might require a high level of unplanned capital investment or relocation.
−Removed: It is possible that environmental compliance costs and penalties from new or existing regulations may harm our business, financial condition, and results of operations.
Risks Related to our Assets
15 unchanged sentences
We have insurance coverage for cyber liability, but there can be no assurances that the amount of coverage will be adequate or that insurance proceeds will be available for a particular claim.
+Added: We are investing in new technologies which are inherently risky .
+Added: We have made investments in research and development (“R&D) of new technologies that we believe will strengthen our relationships with customers if successful.
+Added: To the extent that those investment efforts are unsuccessful, our competitive position may be harmed, and we may not realize a return on our investments.
+Added: To compete more successfully, we believe it is advantageous to maintain an effective R&D program to develop new products and manufacturing processes that will benefit our customers.
+Added: Our R&D efforts are currently funded through investment of capital generated from operations, and we incurred R&D expenses of $1.5 million in 2022.
+Added: We are focusing our R&D efforts across several key areas, including development of active optical cables and expanded beam connectors.
+Added: We do not expect all of our R&D investments to be successful.
+Added: Some of our efforts to develop and market new products and technologies fail or fall short of our expectations, or will not be well-received by customers, who may adopt competing technologies.
+Added: Our investments in new products and technologies are inherently risky and are a departure from historical business operations .
+Added: Developing Company owned technology and products is different than our historical manufacturing business.
+Added: While we believe that this is an important step to further cultivate relationships with customers and partners, the Company has not historically developed its own technologies or products;
+Added: rather, it has historically developed and manufactured products designed by our customers.
+Added: Development of new products and technologies may expose us to potential product liability risks that are inherent in the design, manufacture and marketing of those products.
+Added: As a result, we face an inherent risk of damage to our reputation if one or more of our products or technologies are, or are alleged to be, defective.
+Added: Although we carry product liability insurance, we may be exposed to product liability and warranty claims in the event that our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in bodily injury and/or property damage.
+Added: Product liability, warranty and recall costs may have a material adverse effect on our business, financial condition and results of operations.
Financial Risks
29 unchanged sentences
Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.
−Removed: Pandemics or disease outbreaks such as the current novel coronavirus (COVID-19 virus) pandemic have affected and is expected to continue to adversely affect our operations, supply chains, financial condition and results of operations.
−Removed: The coronavirus (COVID-19) pandemic is affecting, and is expected to continue to affect, our operations, supply chains, financial condition and results of operations.
−Removed: During the current COVID-19 pandemic, the Company has experienced reduced sales, supply chain disruption, product shipping disruptions, reduced customer demand and reduced availability of workforce.
−Removed: Outbreaks of epidemic, pandemic, or contagious diseases, such as, historically, the Ebola virus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome, or the H1N1 virus, could cause a disruption to our business.
+Added: Pandemics or disease outbreaks could adversely affect our operations, supply chains, financial condition and results of operations.
+Added: Outbreaks of epidemic, pandemic, or contagious diseases, such as, historically, the COVID-19 virus, Ebola virus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome, or the H1N1 virus, could cause a disruption to our business.
Business disruptions could include temporary closures of our facilities or the facilities of our suppliers, reduced demand from customers, unavailability or restricted availability of our material portions of our workforce, raw materials or components necessary to manufacture our products, or disruptions or restrictions on our ability to travel or to distribute our products.
2 unchanged sentences
Any of these events could negatively impact our sales and have a material adverse effect on our business, financial condition, results of operations, or cash flows.
−Removed: The impact of COVID-19 did result in a triggering event for goodwill and long-lived assets in 2020.
−Removed: See Note 4, Goodwill and Other Intangible Assets , for a discussion related to a full impairment of goodwill for the year ended December 31, 2020.
We concluded no impairment of long-lived assets as of December 31, 2022 or 2021.
5 unchanged sentences
Further, an economic downturn may affect our ability to satisfy the financial covenants in the terms of our financing arrangements.
−Removed: Our business may be impacted by natural disasters or future climate change.
−Removed: Natural disasters, such as tornadoes and earthquakes, and possible future changes in climate could negatively impact our business and supply chain.
−Removed: Our properties may be exposed to rare catastrophic weather events, such as severe storms and/or floods.
−Removed: If the frequency of extreme weather events increases due to climate change, our exposure to these events could increase.
−Removed: In countries that we rely on for operations and materials, such as Mexico and China, potential natural disasters or future climate changes could disrupt our manufacturing operations, reduce demand for our customers’
−Removed: products and increase supply chain costs.
Legal and Regulatory Risks
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We have not incurred significant costs related to compliance with environmental laws and regulations and we believe that our operations comply with all applicable environmental laws.
+Added: Environmental laws could also become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with violation.
+Added: We operate in environmentally sensitive locations and are subject to potentially conflicting and changing regulatory agendas of political, business, and environmental groups.
+Added: Changes or restrictions on discharge limits;
+Added: emissions levels;
+Added: or material storage, handling, or disposal might require a high level of unplanned capital investment or relocation.
+Added: It is possible that environmental compliance costs and penalties from new or existing regulations may harm our business, financial condition, and results of operations.
+Added: Global climate change and related regulations could negatively affect the Company.
+Added: Changes in environmental and climate change laws or regulations, including laws relating to Green House Gas (“GHG”) emissions, could lead to new or additional investment in the Company’s facilities and could increase environmental compliance expenditures.
+Added: Changes in climate change concerns including GHG emissions, and the regulation of such concerns including climate-related disclosures, could subject the Company to additional costs and restrictions, including increased energy and raw material costs and other compliance requirements which could negatively impact the Company’s reputation, business, capital expenditures, results of operations and financial position.
+Added: Natural disasters, such as tornadoes and earthquakes, and possible future changes in climate could negatively impact our business and supply chain.
+Added: Our properties may be exposed to rare catastrophic weather events, such as severe storms and/or floods.
+Added: If the frequency of extreme weather events increases due to climate change, our exposure to these events could increase.
If we use hazardous materials in a manner that causes contamination or injury, we could be liable for resulting damages.
7 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.