What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2026-02-24 compared with 2025-02-25 · 116 added, 85 removed, 451 unchanged (31% of the section changed)

13 unchanged sentences

• Our ability to fulfill our backlog may have an effect on our long-term ability to procure contracts and fulfill current contracts.

• We are implementing a new enterprise resource planning system.

Our failure to implement it successfully, on time and on budget could have a material adverse effect on us.

• We recently implemented a new enterprise resource planning system.

Our failure to effectively operate and maintain the new system could have a material adverse effect on us.

• The use or anticipated use of new and evolving technologies, such as AI, by us or third parties may increase or create new operational risks.

Risks Related to Our Customers

24 unchanged sentences

• Turmoil or fluctuations in the credit markets and the financial services industry may negatively impact our business, results of operations, financial condition or liquidity, and our factoring arrangements may expose us to additional risks.

• We are subject to various environmental laws and regulations that could impose substantial costs upon us, and failure to comply with such laws and regulations may harm our business, operating results and financial condition.

• We are subject to various environmental laws and regulations that could impose substantial costs upon us, and failure to comply with such laws and regulations may impact our business, operating results and financial condition.

• Legal proceedings, claims and investigations may expose us to increased costs and may negatively affect our business and results of operations.

Risks Related to Growth and Acquisitions

• We may choose to acquire new and complementary businesses, products or technologies instead of developing them ourselves, and we may be unable to complete these acquisitions or may not be able to successfully integrate an acquired business in a cost-effective and non-disruptive manner.

• Integrating Semilab USA’s business may be more difficult, costly or time-consuming than expected, and we may fail to realize the anticipated benefits of the acquisition, which may adversely affect our business results and negatively affect the value of our common stock.

• We may choose to acquire or invest in new and complementary businesses, products or technologies instead of developing them ourselves, and we may be unable to complete these acquisitions or may not be able to successfully integrate an acquired business in a cost-effective and non-disruptive manner.

• If we cannot effectively manage growth, our business may suffer.

7 unchanged sentences

If we do not manage our supply chain effectively, our operating results may be adversely affected, and any increases in material, labor, supplier, logistics and other operating costs, or supply chain delays and shortages, could lower our margins or result in lost sales.

We need to continually evaluate our global supply chains and assess opportunities to reduce costs.

We need to continually evaluate our global supply chain and assess opportunities to reduce costs.

We must also enhance quality, speed and flexibility to meet changing demand for our products and product mix and uncertain market conditions.

Our success also depends in part on refining our cost structure and supply chains so that we have flexibility and can maintain and improve profitability.

Deterioration in the tariff environment such as discussed herein under the heading “Tariffs, export regulations, and other market barriers have impacted and may continue to impact our ability to compete for the business of domestic customers in China and other jurisdictions, which has adversely affected and may continue to adversely affect our, business, financial condition and results of operations,” political instability or changes in suppliers may cause our costs to increase and, if we are not able to offset the increased costs by charging higher sales prices, will cause a decline in our margins.

To improve margins on our products, we would need to negotiate price reductions with our vendors.

But we cannot be certain that we will be able to do so in a timely manner, or at all.

Failure to achieve the desired level of cost reductions could adversely affect our financial results.

Recent changes in the tariff environment may continue to cause fluctuation in our costs.

If we are unable to successfully negotiate price reductions with our suppliers, adjust our operations to reduce tariff exposure, and/or offset the increased costs by charging higher sales prices, our margins will decline, resulting in an adverse impact to our business and results of operations.

Political instability and/or changes in suppliers may also cause our costs to increase.

Despite our efforts to control costs and increase efficiency in our facilities, changes in demand could still cause us to realize lower operating margins and profitability.

Further, our gross margins and financial performance may be adversely affected by increases in our operating costs, such as material, labor, supplier costs, logistics and energy costs, all of which have been and may continue to be subject to inflationary pressures.

Operating costs have increased and may continue to increase further as a result of supply chain disruptions in connection with the sourcing of components, materials, equipment, engineering support, and services, labor shortages, high inflation rates, and cost increases attributable to the effects of geopolitical events, such as the Russia-Ukraine conflict.

In addition, we source components for certain of our tools from a supplier in Israel.

If the conflict in Israel and Gaza and the surrounding area escalates, it could disrupt our supply chain, resulting in a material adverse impact on our business.

Operating costs have increased and may continue to increase further as a result of higher tariffs, supply chain disruptions in connection with the sourcing of components, materials, equipment, engineering support, and services, labor shortages, high inflation rates, and cost increases attributable to the effects of geopolitical events.

These risks may be heightened because we obtain some of the components and subassemblies included in our systems from a limited group of suppliers and do not have long-term contracts with many of our suppliers.

9 unchanged sentences

Further, a significant increase in the price of one or more of these components or subassemblies could seriously harm our results of operations and cash flows.

Our efforts to mitigate any cost increases, labor impacts and supply chain delays and shortages may not be successful, and we cannot predict the duration of these current trends or other future increases in operating costs.

We may not be able to pass cost increases through to our customers fully (or at all), and if supply chain delays and shortages delay delivery of our products, our customers may seek to purchase from our competitors.

Our efforts to mitigate any cost increases, including any cost increases resulting from existing or future tariffs, labor impacts and supply chain delays, disruptions and shortages may not be successful, and we cannot predict the duration of these current trends or other future increases in operating costs.

We may not be able to pass cost increases through to our customers fully (or at all), and if supply chain delays, disruptions and shortages delay delivery of our products, our customers may seek to purchase from our competitors.

Any such occurrence may have a material adverse impact on our gross margins and business, financial position, results of operations and cash flows.

28 unchanged sentences

Our earnings could be negatively affected, and our inventory levels could materially increase, if we are unable to predict our inventory needs in an accurate and timely manner and adjust our orders for parts and subcomponents in the event that our needs increase or decrease materially due to unexpected increases or decreases in demand for our products.

Any material increase in our inventories could result in an adverse effect on our financial position, while any material decrease in our ability

to procure needed inventories could result in an inability to supply customer demand for our products, thus adversely affecting our revenue.

increase in our inventories could result in an adverse effect on our financial position, while any material decrease in our ability to procure needed inventories could result in an inability to supply customer demand for our products, thus adversely affecting our revenue.

If we deliver systems with defects, our credibility will be harmed, and the sales and market acceptance of our systems will decrease.

28 unchanged sentences

and Bloomington, Minnesota.

We also use contract manufacturers in China, Japan and the United States.

We also use contract manufacturers in Japan, Taiwan, Vietnam, Malaysia, Singapore and the United States.

Our manufacturing processes are highly complex and require sophisticated and costly equipment and a specially designed facility.

As a result, any prolonged disruption in the operations of our manufacturing facilities could seriously harm our ability to satisfy our customer order deadlines.

Restrictions on our access to or operation of manufacturing facilities or on our support operations or workforce, or similar limitations for our vendors and suppliers, may impact our ability to meet customer demand and could have a material adverse effect on our financial condition and results of operations.

financial condition and results of operations.

If we cannot timely deliver our systems, our results from operations and cash flows could be materially and adversely affected.

14 unchanged sentences

Additionally, if we are consistently unable to fulfill our backlog, this may be a disincentive to customers to award large contracts to us in the future until they are comfortable that we can effectively manage our backlog.

We are implementing a new enterprise resource planning system.

Our failure to implement it successfully, on time and on budget could have a material adverse effect on us.

We are in the process of completing a multi-year implementation of a complex new enterprise resource planning (“ERP”) system.

ERP implementations are complex, time-consuming, labor intensive, and involve substantial expenditures on system software and implementation activities.

We recently implemented a new enterprise resource planning system.

Our failure to effectively operate and maintain the new system could have a material adverse effect on us.

We recently implemented a complex new enterprise resource planning (“ERP”) system and are continuing to make adjustments to the ERP system and update our business processes.

The ERP system is critical to our ability to provide important information to our management, obtain and deliver 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, and otherwise operate our business.

ERP implementations also require transformation of business and financial processes in order to reap the benefits of the ERP system.

Any such implementation involves risks inherent in the conversion to a new computer system, including loss of information and potential disruption to our normal operations.

The implementation and maintenance of the new ERP system has required, and will continue to require, the investment of significant financial and human resources and the implementation may be subject to delays and cost overruns.

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.

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.

The implementation and maintenance of the new ERP system have required, and will continue to require, the investment of significant resources and may be subject to delays and cost overruns.

In addition, we may experience difficulties as we continue to adjust to using the new system.

Any disruptions, delays or deficiencies in the design 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.

Additionally, if the ERP 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.

The use or anticipated use of new and evolving technologies, such as AI, by us or third parties may increase or create new operational risks.

We have in the past and will in the future integrate new and evolving technologies, such as AI, into our business.

AI technologies offer numerous potential benefits, such as creating or increasing operational efficiencies, and we expect an increase in the use of AI and generative AI by us, third parties on our behalf, and other market actors, including our competitors.

However, the deployment of such technologies also poses certain risks, including that the algorithms may be flawed, misused or otherwise function in an unexpected manner;

data sets may be insufficient, of poor quality, or contain biased information;

and inappropriate or controversial data practices by data scientists, engineers, and end-users could impair results.

If the analyses that AI-based applications assist in producing are or are perceived to be deficient, inaccurate or biased, we could be subjected to competitive harm, potential legal liability and brand or reputational harm.

The introduction of AI technologies into our operations may also potentially result in new or enhanced compliance requirements, governmental or regulatory scrutiny, litigation, confidentiality or security risks or other complications.

The rapid evolution of AI will also require the application of significant resources to design, develop, test, oversee and maintain our products and services to help ensure that AI is implemented in accordance with applicable law and regulation to minimize any real or perceived unintended harmful impacts.

If improperly managed, increase reliance on AI could result in damage our reputation, result in the loss of valuable property and information, cause us to breach applicable laws and regulations, and adversely impact our business.

Risks Related to Our Customers

9 unchanged sentences

We operate in an industry that is highly competitive and subject to evolving industry standards, rapid technological changes, rapid changes in consumer demands and the rapid introduction of new, higher performance systems with shorter product life cycles.

To be competitive in our demanding market, we must continually design, develop and introduce in a timely manner new lithography, inspection and metrology process control systems that meet the performance and price demands of semiconductor device manufacturers.

We must also continue to refine our current systems so that they remain competitive.

To be competitive in our demanding market, we must continually design, develop and introduce in a timely manner new products that meet the performance and price demands of our customers.

We must also continue to refine our current products so that they remain competitive.

We expect to continue to make significant investments in our research and development activities and at times may make inventory investments prior to commercialization.

1 unchanged sentence

In addition, we cannot provide assurance that we will be able to develop new products for the most opportunistic new markets and applications.

Any significant delay in releasing new systems could cause our products to become obsolete, adversely affect our reputation, give a competitor a first-to-market advantage or cause a competitor to achieve greater market share.

Our competitors may also develop products, including through the use of artificial intelligence, that may have performance advantages over systems we currently offer or may offer in the future, which could similarly weaken our competitive position.

Further, customers that may otherwise desire to purchase our products from us and purchase other products from our competitors may nevertheless purchase competing products from our competitors rather than purchase our products due to a variety of reasons, including to gain favorable or volume pricing from our competitors.

Any significant delay in releasing new products could cause our products to become obsolete, adversely affect our reputation, give a competitor a first-to-market advantage or cause a competitor to achieve greater market share.

Our competitors may also develop products that may have performance advantages over systems we currently offer or may offer in the future, which could similarly weaken our competitive position.

If new products developed by us do not gain general market acceptance, we will be unable to generate revenue and recover our investments, which may result in a write down of inventory.

Inspection, lithography and metrology product development is inherently risky because it is difficult to foresee developments in semiconductor device manufacturing technology, coordinate technical personnel, and identify and eliminate system design flaws.

Developing products for the semiconductor industry is inherently risky because it is difficult to foresee developments in semiconductor device manufacturing technology, coordinate technical personnel, and identify and eliminate system design flaws.

Further, our products are leading edge and complex, and often the applications to our customers’ businesses are unique.

20 unchanged sentences

If we fail to adequately protect our intellectual property, it will give our competitors a significant advantage.

We own or have licensed a number of patents relating to our metrology, lithography, wafer and defect inspection systems, as well as artificial intelligence and machine learning systems, and software, including both embedded and application software, and have filed applications for additional patents.

We own or have licensed a number of patents relating to our metrology, lithography, wafer and defect inspection systems, as well as AI and machine learning systems, and software, including both embedded and application software, and have filed applications for additional patents.

Any of our pending patent applications may be rejected, however, and we may be unable to develop additional proprietary technology that is patentable in the future.

16 unchanged sentences

For example, our competitors may independently develop similar technology or duplicate our products.

this occurs, it could be easier for our competitors to develop and sell competing products in these countries.

If this occurs, it could be easier for our competitors to develop and sell competing products in these countries.

Accordingly, infringement of our intellectual property rights poses a serious risk to our ability to conduct business.

15 unchanged sentences

We also rely on our information technology system for business operations.

If there is a breach as a result of third-party action, including through the use of artificial intelligence, employee error, malfeasance, break-ins or otherwise, of our security measures designed to protect this information and prevent data loss and other security breaches, and someone obtains unauthorized access to our customers’, vendors’ or employees’ data or disrupts our access to our own data and systems, we could face loss of business, regulatory investigations or court orders or damage to our reputation, and we could be required to expend significant capital and other resources to alleviate the problem, as well as incur significant costs and liabilities, including due to litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers.

If there is a breach as a result of third-party action, including through the use of AI, employee error, malfeasance, break-ins or otherwise, of our security measures designed to protect this information and prevent data loss and other security breaches, and someone obtains unauthorized access to our customers’, vendors’ or employees’ data or disrupts our access to our own data and systems, we could face loss of business, regulatory investigations or court orders or damage to our reputation, and we could be required to expend significant capital and other resources to alleviate the problem, as well as incur significant costs and liabilities, including due to litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations, and costs for remediation and other incentives offered to customers.

Cyber-attacks and other malicious internet-based activities continue to increase.

4 unchanged sentences

As discussed herein under the heading “We outsource select manufacturing activities to third-party service providers, which decreases our control over the performance of these functions and may result in lower quality and functionality of our products,” cybersecurity incidents affecting our service providers could negatively impact our ability to timely and cost-effectively produce products and/or negatively impact our competitive position in the market.

Likewise, cybersecurity events impacting our suppliers could result in substantial delays in our ability to obtain necessary components for our products from those suppliers, which could hamper our ability to ship our products to our customers, harming our results of operations and our customer relationships.

Any or all of the above issues could negatively affect our ability to attract new customers, cause

existing customers to choose to purchase from our competitors, result in reputational damage or subject us to third-party lawsuits, regulatory fines or other action or liability, which could adversely affect our operating results.

Likewise, cybersecurity events impacting our suppliers could result in substantial delays in our ability to obtain necessary components for our products from

those suppliers, which could hamper our ability to ship our products to our customers, harming our results of operations and our customer relationships.

Any or all of the above issues could negatively affect our ability to attract new customers, cause existing customers to choose to purchase from our competitors, result in reputational damage or subject us to third-party lawsuits, regulatory fines or other action or liability, which could adversely affect our operating results.

We are also subject to evolving and increasingly complex laws, regulations and standards relating to data protection, privacy, and cybersecurity in the United States and globally, as well as to the SEC’s disclosure requirements regarding cybersecurity risk management, strategy, governance and incident reporting.

Failure to prevent or timely detect and remediate a cybersecurity incident, or to comply with applicable laws, regulations, contracts, or industry standards, could result in governmental inquiries or enforcement, regulatory penalties, private litigation, indemnity obligations, and other adverse consequences.

We maintain cybersecurity insurance;

however, coverage may not be sufficient to cover all losses or impacts from a cybersecurity incident.

Compliance with data protection laws may be costly and may impede development of new products, and any failure to comply with, or inquiries under, these laws could have a material adverse effect on our business, results of operations, and financial condition.

3 unchanged sentences

We are also subject to the California Consumer Privacy Act of 2018 (“CCPA”) and the California Privacy Rights Act (“CPRA”), an amendment and expansion of the CCPA.

We may also be subject to other data privacy laws in the United States and the other countries in which we operate.

We may also be subject to other data privacy laws in the United States, at both the state and federal levels, and the other countries in which we operate.

In many cases, these laws apply not only to third-party transactions, but also to transfers of information between us and our subsidiaries, and among the subsidiaries and other parties with which we have commercial relations.

16 unchanged sentences

Many of our existing and potential customers in the semiconductor device manufacturing industry are large companies that require global support and service for their semiconductor capital equipment.

Some of our competitors have more extensive support and service infrastructures than we do, which could place us at a disadvantage when competing for the business of global semiconductor device manufacturers.

Some of our competitors have more extensive support and service infrastructures than we do, which could place us at a disadvantage when competing for the business of

global semiconductor device manufacturers.

Many of our competitors are investing heavily in the development of new systems that will compete directly with our systems.

4 unchanged sentences

Because of the high cost of switching equipment vendors in our markets, it is sometimes difficult for us to win new customers from our competitors even if our systems are superior to theirs.

We believe that once a semiconductor device manufacturer has selected one vendor’s capital equipment for a production-line application, the manufacturer generally relies upon that capital equipment and, to the extent possible, subsequent generations of the same vendor’s equipment for the life of the application.

Once a semiconductor device manufacturer has selected one vendor’s capital equipment for a production-line application, the manufacturer typically relies upon that capital equipment and, to the extent possible, subsequent generations of the same vendor’s equipment for the life of the application.

Once a vendor’s equipment has been installed in a production line application, a semiconductor device manufacturer must often make substantial technical modifications and may experience production-line downtime in order to switch to another vendor’s equipment.

2 unchanged sentences

Tariffs, export regulations, and other market barriers have impacted and may continue to impact our ability to compete for the business of domestic customers in China and other jurisdictions, which has adversely affected and may continue to adversely affect our, business, financial condition and results of operations.

The semiconductor device industry is a high-visibility industry in many of the European and Asian countries in which we sell our products.

Because the governments of these countries have provided extensive financial support to our semiconductor device manufacturing customers in these countries, we believe that our customers could be disproportionately affected by any trade embargoes, excise taxes, tariffs, trade retaliation, or other restrictions imposed by their governments on trade with U.S.

companies such as ourselves, particularly with respect to the ongoing tensions between the United States and China.

Recent changes in U.S.

trade policy have adversely affected and may continue to adversely affect our business.

In 2025, the U.S.

implemented a number of tariffs on goods imported into the U.S.

In addition, in retaliation for the tariffs imposed on U.S.

imports, a number of other countries announced reciprocal tariffs on goods imported from the U.S.

Tariffs and reciprocal tariffs imposed by other countries may continue to evolve.

As discussed above under the heading “If we do not manage our supply chain effectively, our operating results may be adversely affected, and any increases in material, labor, supplier, logistics and other operating costs, or supply chain delays and shortages, could lower our margins or result in lost sales,” the U.S.

Tariffs have increased, and may continue to increase, our supply chain costs.

Reciprocal tariffs imposed by other countries have harmed and may continue to harm demand for our products from customers in those regions, or may cause our customers in those regions to push out or cancel previously placed purchase orders.

Additionally, over the last several years, the U.S.

5 unchanged sentences

Most recently, in 2022, the DoC imposed new export controls related to the Chinese semiconductor manufacturing, advanced computing, and supercomputer industries.

In 2022, the DoC also added a number of companies in China to the Unverified List and Entity List of the Export Administration Regulations (“EAR”), including Yangtze Memory Technologies Co., Ltd (YMTC).

In October 2023, as well as 2024 and early 2025, the DoC revised and expanded the 2022 export controls.

In 2023, 2024 and 2025, the DoC revised and expanded the 2022 export controls and added new controls.

The DoC has also added a number of companies in China to the Unverified List and Entity List of the Export Administration Regulations (“EAR”), including major buyers of semiconductor equipment.

In September 2025, the DoC instituted the “50% Rule” (also known as the “Affiliates Rule”), which applied Entity List restrictions to affiliates of listed entities.

The 50% rule added thousands of companies to the entity list.

The implementation of the rule was ultimately suspended for a year until November 2026, but could be reinstated before then.

The effect of these changes, among others, is that Onto Innovation is required to conduct additional end-use diligence and in some instances, obtain export licenses before providing products to certain customers.

4 unchanged sentences

Any of these occurrences could have a material adverse effect on our revenues, business, financial condition and results of operations.

Further, we hold inventory of products that may be affected by these recent U.S.

Further, we hold inventory of

products that may be affected by these recent U.S.

government actions, including potential order cancellations.

3 unchanged sentences

export controls.

This difficulty and uncertainty has adversely affected our ability to compete for and win business from domestic customers in China.

These difficulties and uncertainties have adversely affected our ability to compete for and win business from domestic customers in China.

It is possible that the U.S.

government will impose additional export controls on our products or systems, which could lead to further revenue losses.

For example, it remains uncertain what changes, if any, the new U.S.

presidential administration will make with respect to U.S.

For example, it remains uncertain whether the current U.S.

presidential administration will make additional changes with respect to U.S.

export control policy.

2 unchanged sentences

government sanctions, controls or threats of sanctions or controls may respond by developing their own solutions to replace our products or by utilizing our foreign competitors’ products (who are not subject to the same export controls and can fulfill the orders).

In addition, these export controls may also reduce overall global demand for our customers’ products or for other products

produced or manufactured in the U.S.

In addition, these export controls may also reduce overall global demand for our customers’ products or for other products produced or manufactured in the U.S.

or based on U.S.

1 unchanged sentence

Increased restrictions on China exports may also lead to regulatory retaliation by the Chinese government, which may adversely impact our business.

International trade disputes could result in increases in tariffs and other trade restrictions and protectionist measures that could adversely impact our operations and reduce the competitiveness of our products relative to local and global competitors.

We are subject to compliance with domestic and foreign laws and regulations, and the burden of complying with such laws and regulations, or any failure to comply, has adversely affected and may continue to adversely affect our business, financial condition and results of operations .

14 unchanged sentences

Similarly, if the conflict in Israel and Gaza and the surrounding area escalates, it could result in disruptions to our supply chain and/or the operations of our customers in a manner that reduces demand for our products.

In addition, due to the complex relationships among China, Hong Kong, Taiwan, and the United States, there is risk that political, diplomatic, and national security influences might lead to trade, technology, or capital disputes, or disruptions affecting the semiconductor industry.

In addition, due to the complex relationships among China, Hong Kong, Taiwan, and the United States, there is risk that political, diplomatic, and national security influences might lead to further trade, technology, or capital disputes, or disruptions affecting the semiconductor industry.

In particular, the escalation of geopolitical tensions between China and Taiwan may cause disruptions in the markets in which we operate and lead to a decreased demand for our products, which could adversely affect our business in Asia or have a negative impact on the regional or global economy.

12 unchanged sentences

and a decrease in demand for our products.

Additional sustained or prolonged public health crises, or any ongoing, worsening or recurring supply chain disruptions or macroeconomic effects of such crises could have a material adverse effect on our business, results of operations, legal exposure, or financial condition and may also heighten many of the other risks described in this “Risk Factors” section.

Any sustained or prolonged public health crises, or any ongoing, worsening or recurring supply chain disruptions or macroeconomic effects of such crises could have a material adverse effect on our business, results of operations, legal exposure, or financial condition and may also heighten many of the other risks described in this “Risk Factors” section.

There may also be conflict or uncertainty in the countries in which we operate, including safety issues, disruptions of service from utilities, nuclear power plant accidents or general economic or political unrest, including war, civil unrest or terrorist attacks.

We have no material operations in Russia, Belarus, Ukraine, or Israel.

Consequently, to date, our operations have not been materially adversely affected by Russia’s invasion of Ukraine, or the Israel-Hamas conflict.

However, if the Russia-Ukraine conflict and/or the conflicts in Israel and Gaza and the surrounding area escalate further, and/or the U.S.

or other jurisdictions impose additional sanctions on the governments or entities involved, this could result in disruptions to the global economy and/or supply chains that could adversely affect our business.

While current global conflicts have not materially adversely affected our business, new or expanding conflicts and sanctions could result in disruptions to the global economy and/or supply chains that could materially adversely affect our business.

We may face difficulties in staffing and managing foreign branch operations due to political tensions or cultural differences .

13 unchanged sentences

Also, similar worldwide anti-bribery laws, such as the U.K.

Bribery Act and Chinese anti-corruption laws, generally prohibit companies and their intermediaries from

making improper payments to non-U.S.

Bribery Act and Chinese anti-corruption laws, generally prohibit companies and their intermediaries from making improper payments to non-U.S.

officials for the purpose of obtaining or retaining business.

14 unchanged sentences

For example, beginning in 2022, the U.S.

Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminated the existing option to deduct research and development expenditures and requires taxpayers to amortize them over five years pursuant to IRC Section 174.

The requirement reduced our cash flows for 2022, 2023 and 2024, and may continue to reduce our cash flows.

Tax Cuts and Jobs Act of 2017 (“TCJA”) eliminated the existing option to deduct U.S.

domestic and foreign research and development expenditures on the U.S.

tax returns and required taxpayers to capitalize and amortize them over five and fifteen years, respectively, pursuant to IRC Section 174.

The requirement reduced our cash flows for 2022, 2023 and 2024.

On July 4, 2025, the U.S.

enacted tax reform legislation through the One Big Beautiful Bill Act that allows for the immediate expensing of domestic U.S.

research and development expenses, although the Company continues to capitalize and amortize foreign research and development costs on the U.S.

In addition, any changes to U.S.

1 unchanged sentence

taxation of international business operations and imposing a global minimum tax could have a negative impact on our tax position in the future.

Many countries and organizations, such as the Organization for Economic Cooperation and Development (“OECD”), which is discussed further below, are also actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.

Many countries and organizations, such as the Organization for Economic Cooperation and Development (“OECD”), which is discussed further below, are also actively considering changes

to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.

Any of these developments or changes in federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate and our results of operations.

3 unchanged sentences

Depending on the final form of legislation ultimately enacted, there may be significant consequences for us due to our international business activities, including, but not limited to, an increase in our tax uncertainty and adverse effects on our provision for income taxes.

presidential administration has directed the U.S.

Department of Treasury to develop options for “protective measures” in response to tax rules imposed by non-U.S.

countries that are extraterritorial or disproportionately affect U.S.

companies (which may include taxes imposed under the OECD guidance) and legislation has been introduced that would increase U.S.

tax rates on non-U.S.

companies and investors if their home jurisdictions impose discriminatory or extraterritorial taxes on U.S.

companies, but we cannot predict whether such protective measures or legislation will be adopted or what, if any, responsive measures will be adopted by non-U.S.

On January 5, 2026, the OECD announced that the Inclusive Framework on Base Erosion and Profit Shifting agreed to a new package of administrative guidance under the Pillar Two global minimum tax rules.

The new administrative guidance allows for U.S.

multinationals to provide for a Side-by-Side Safe Harbor that would exclude U.S.-parented multinational groups from the global minimum tax rule’s Income Inclusion Rule and Undertaxed Profits Rule on the grounds that the existing U.S.

law is sufficiently robust in its taxation of domestic and foreign profits.

Although we will continue to monitor U.S.

and international legislative developments in this area, we cannot predict whether such protective measures or legislation will be adopted by non-U.S.

countries, if any, and whether the U.S.

would have any responsive measures.

In addition, we are subject to regular examination of our income tax returns by the Internal Revenue Service and other tax authorities.

4 unchanged sentences

Adverse economic conditions, such as sustained periods of economic uncertainty or a crisis in the financial markets may have a material adverse effect on our liquidity and financial condition if our ability to obtain credit from the capital financial markets, or from trade creditors is impaired.

financial institutions with whom we have banking relationships enter receivership or become insolvent in the future, we may be unable to access, and we may lose, some or all of our existing cash, cash equivalents and investments to the extent those funds are not insured or otherwise protected by the FDIC.

If banks and financial institutions with whom we have banking relationships enter receivership or become insolvent in the future, we may be unable to access, and we may lose, some or all of our existing cash, cash equivalents and investments to the extent those funds are not insured or otherwise protected by the FDIC.

In addition, a worsening economy or an economic crisis could also adversely impact our customers’ ability to finance the purchase of systems from us or our suppliers’ ability to provide us with product, either of which may negatively impact our business and results of operations.

We are subject to various environmental laws and regulations that could impose substantial costs upon us, and failure to comply with such laws and regulations may harm our business, operating results and financial condition.

We are subject to various environmental laws and regulations that could impose substantial costs upon us, and failure to comply with such laws and regulations may impact our business, operating results and financial condition.

Some of our operations use substances regulated under various federal, state, local, and international laws governing the environment, including those relating to the storage, use, discharge, disposal, labeling, and human exposure to hazardous and toxic materials.

2 unchanged sentences

Compliance with current or future environmental laws and regulations could restrict our ability to expand our facilities or require us to acquire additional expensive equipment, modify our manufacturing processes, or incur other significant expenses.

For example, we are, or may become subject to various new or proposed climate-related and other sustainability laws and regulations, including, for example, the state of California’s new climate change disclosure requirements, the EU’s new Corporate Sustainability Reporting Directive and proposed climate-change disclosure requirements from the SEC.

For example, we are, or may become subject to various new or proposed climate-related and other sustainability laws and regulations, including, for example, the state of California’s new climate change disclosure requirements and the EU’s new Corporate Sustainability Reporting Directive.

Compliance with such laws and regulations, as well as any increased focus or scrutiny from the SEC and other regulators, investors, customers, vendors, employees, and other stakeholders concerning sustainability and climate matters, could impose additional costs on us.

We may unintentionally violate environmental laws or regulations in the future as a result of human error, equipment failure or other causes.

In addition to the potential adverse effects on our business operations of such an event, we are committed to maintaining safe working conditions for our employees and sourcing, manufacturing, and distributing our products in a responsible and environmentally friendly manner, and any failure on our part to do so may cause reputational harm for the Company.

In addition to the potential adverse effects on our business operations of such an event, we are committed to maintaining safe working conditions for our employees

and sourcing, manufacturing, and distributing our products in a responsible and environmentally friendly manner, and any failure on our part to do so may cause reputational harm for the Company.

Legal proceedings, claims and investigations may expose us to increased costs and may negatively affect our business and results of operations.

9 unchanged sentences

Risks Related to Growth and Acquisitions

Integrating Semilab USA’s business may be more difficult, costly or time-consuming than expected, and we may fail to realize the anticipated benefits of the acquisition, which may adversely affect our business results and negatively affect the value of our common stock.

The success of the Semilab USA acquisition, including the realization of anticipated benefits, will depend, in part, on our ability to successfully combine our and Semilab USA’s businesses.

The integration may be more difficult, costly or time consuming than expected.

It is possible that the integration process could result in the loss of key employees or the disruption of each company’s ongoing businesses or that the alignment of standards, controls, procedures and policies may adversely affect the combined company’s ability to maintain relationships with clients, customers, suppliers and employees or to fully achieve the anticipated benefits and cost savings of the transaction.

The loss of key employees could adversely affect our ability to successfully conduct our business in the markets in which Semilab USA now operates, which could have an adverse effect on our financial results.

Other potential difficulties of combining our and Semilab USA’s businesses include unanticipated issues in integrating manufacturing, logistics, information communications and other systems.

If we experience difficulties with the integration process, the anticipated benefits of the Semilab USA acquisition may not be realized fully or at all, or may take longer to realize than expected.

Integration efforts between the two companies may also divert management attention and resources.

These integration matters could have an adverse effect on our business and Semilab USA during this transition period and for an undetermined period after completion of the Semilab USA acquisition on the combined company.

We may choose to acquire new and complementary businesses, products or technologies instead of developing them ourselves, and we may be unable to complete these acquisitions or may not be able to successfully integrate an acquired business in a cost-effective and non-disruptive manner.

4 unchanged sentences

We cannot provide any assurance that we will be successful in consummating future acquisitions on favorable terms or that we will realize the benefits that we anticipate from one or more acquisitions that we consummate.

Integrating any business, product, technology or service into our current operations could be expensive and

time-consuming and/or disrupt our ongoing business.

Integrating any business, product, technology or service into our current operations could be expensive and time-consuming and/or disrupt our ongoing business.

Further, there are numerous risks associated with acquisitions and potential acquisitions, including, but not limited to:

31 unchanged sentences

In addition, during periods of rapid growth, we must be able to increase manufacturing capacity and personnel to meet customer demand.

We can provide no assurance that these objectives can be met in a timely manner in response to industry cycles, and we cannot predict when and to what extent sales may normalize, or when

and to what extent gross margins may improve, following any such occurrence.

We can provide no assurance that these objectives can be met in a timely manner in response to industry cycles, and we cannot predict when and to what extent sales may normalize, or when and to what extent gross margins may improve, following any such occurrence.

If we fail to respond to industry cycles, our business could be seriously harmed.

1 unchanged sentence

If our customers have difficulties in obtaining capital or financing, this could result in lower sales.

Customers with liquidity issues could also result in an increase in bad debt expense.

Customers with liquidity issues could also

result in an increase in bad debt expense.

These conditions could also affect our key suppliers, which could affect their ability to supply parts and result in delays of our customer shipments.

Our future rate of growth is highly dependent on the development and growth of the market for microelectronic device inspection, lithography and metrology equipment.

We target our products to address the needs of microelectronic device manufacturers for defect inspection, metrology and lithography.

If for any reason the market for microelectronic device inspection, lithography or metrology equipment fails to grow in the long term, we may be unable to maintain current revenue levels in the short term and maintain our historical growth in the long term.

Growth in the inspection market is dependent to a large extent upon microelectronic manufacturers replacing manual inspection with automated inspection technology.

We target our products to address the needs of semiconductor device manufacturers.

If for any reason the market for products fails to grow in the long term, we may be unable to maintain current revenue levels in the short term and maintain our historical growth in the long term.

Growth in the inspection market is dependent to a large extent upon semiconductor manufacturers replacing manual inspection with automated inspection technology.

Growth in the metrology market is dependent to a large extent upon new chip designs and capacity expansion of microelectronic manufacturers.

29 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors