−Removed: Technology failures or cyber security breaches could have a material adverse effect on our operations.
−Removed: We rely on information technology systems to process, transmit, store, and protect electronic information.
−Removed: For example, a significant portion of the communications between our personnel, customers, and suppliers depends on information technology.
−Removed: Our information technology systems may be vulnerable to a variety of interruptions due to events beyond our control, including, but not limited to, natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers, and other security issues.
−Removed: Although we have technology and information security processes and disaster recovery plans in place to mitigate our risks to these vulnerabilities, these measures may not be adequate to ensure that our operations will not be disrupted, should such an event occur.
−Removed: The General Data Protection Regulation (GDPR), which went into effect in the European Union (EU) on May 25, 2018, applies to the collection, use, retention, security, processing, and transfer of personally identifiable information of residents of EU countries.
−Removed: The GDPR created a range of new compliance obligations, and imposes significant fines and sanctions for violations.
−Removed: It is possible that the GDPR may be interpreted or applied in a manner that is adverse to, or unforeseen by us, including requirements that are inconsistent with our practices, or that we may otherwise fail to construe its requirements in ways that are satisfactory to the EU authorities.
−Removed: Any failure, or perceived failure, by us to comply with the GDPR, or with any applicable regulatory requirements or orders, including but not limited to privacy, data protection, information security, or consumer protection related privacy laws and regulations, in one or more jurisdictions within the EU or elsewhere, could:
−Removed: result in proceedings or actions against us by governmental entities or individuals;
−Removed: subject us to significant fines, penalties, and/or judgments;
−Removed: require us to change our business practices;
−Removed: limit access to our products and services in certain countries, or otherwise adversely affect our business, as we would be at risk to lose both customers and revenue, and incur substantial costs.
−Removed: The risk of loss of the Company’s intellectual property, trade secrets or other sensitive business or customer confidential information or disruption of operations due to breaches of cybersecurity could negatively impact the Company’s financial results.
−Removed: Cyberattacks or security breaches could compromise confidential, business-critical information, cause disruptions in the Company’s operations, or harm the Company's reputation.
−Removed: The Company has important assets, including intellectual property, trade secrets, and other sensitive, business-critical and/or confidential information which may be vulnerable to such incidents.
−Removed: While the Company has a comprehensive cybersecurity program that is continuously reviewed, maintained, and upgraded, a significant cyberattack could result in the loss of vital business or confidential information and/or could negatively impact operations, which could have a negative impact on the Company’s financial results.
+Added: Set forth below are discussions of the risk factors we believe can make an investment in our business speculative or risky.
+Added: Concentration Related Risk Factors
Our dependency on the microelectronics industry, which as a whole is volatile, could create volatility in our demand and have a negative material impact on our business.
5 unchanged sentences
These downturns have been characterized by, among other things, diminished product demand, excess production capacity, and accelerated erosion of selling prices with a concomitant effect on revenue and profitability.
−Removed: We may, in the future, incur net losses.
−Removed: Although we have been profitable since fiscal 2010, we have, in the past, incurred net losses.
−Removed: We cannot provide assurance that we will not incur net losses in the future.
−Removed: We have a high level of fixed costs.
−Removed: As a consequence of the capital-intensive nature of the photomask manufacturing business, we have a high level of fixed costs and a high degree of operating leverage.
−Removed: Accordingly, should our sales volumes decline as a result of a decrease in design releases from our customers or for any other reason, we may have excess or underutilized production capacity which could significantly impact our operating margins or result in write-offs from asset impairments.
−Removed: Our quarterly operating results fluctuate significantly, and may continue to do so in the future.
−Removed: We have experienced fluctuations in our quarterly operating results, and we anticipate that such fluctuations will continue and could intensify in the future.
−Removed: Fluctuations in operating results may result in volatility in the prices of our common stock and financial instruments linked to its value.
−Removed: Operating results may fluctuate as a result of many factors, including the size and timing of orders and shipments, the loss of significant customers, changes in product mix, the flow of customer design releases, technological change, fluctuations in manufacturing yields, the actions of our competitors, and general economic conditions.
−Removed: We operate in a high fixed-cost environment and, should our revenues and asset utilization decrease, our operating margins could be negatively impacted.
−Removed: Our customers generally order photomasks on an as-needed basis;
−Removed: thus our revenue in any quarter is dependent primarily on orders received during that quarter.
−Removed: Since we operate with little backlog, and the rate of new orders may vary significantly from quarter to quarter, our capital expenditures and, to some extent, expense levels are based primarily on sales forecasts and technological advancements in photomask manufacturing equipment.
−Removed: Consequently, if anticipated revenues in any quarter do not occur when expected, capital expenditures could be higher than needed, resulting in underutilized capacity and disproportionately high expense levels, causing operating results to be adversely affected.
−Removed: Due to the foregoing factors, we believe that quarter-to-quarter comparisons of our operating results cannot be relied upon as indicators of future performance.
−Removed: In addition, in future quarters, our operating results could be below guidance we may provide or the expectations of public market analysts and investors, which could have a material adverse effect on the market price of our common stock.
−Removed: The photomask industry is subject to rapid technological change, and we might fail to remain competitive, which could have a material adverse effect on our business and results of operations.
−Removed: The photomask industry has been, and is expected to continue to be, characterized by technological change and evolving industry standards.
−Removed: In order to remain competitive, we will be required to continually anticipate, respond to, and utilize changing technologies of increasing complexity in both traditional and emerging markets that we serve.
−Removed: In particular, we believe that, as semiconductor geometries continue to become smaller and FPDs become larger or otherwise more advanced, we will be required to manufacture increasingly complex photomasks.
−Removed: Additionally, the demand for photomasks has been, and could in the future be, adversely affected by changes in semiconductor and high- performance electronics fabrication methods that affect the type or quantity of photomasks utilized, such as changes in semiconductor demand that favor field-programmable gate arrays and other semiconductor designs that replace application-specific ICs.
−Removed: Furthermore, evidence of the viability and the corresponding market acceptance of alternative methods of transferring IC designs onto semiconductor wafers could reduce or eliminate the need for photomasks in the production of semiconductors.
−Removed: As of the end of fiscal 2019, one alternative method, direct-write lithography, has not been proven to be a commercially-viable alternative to photomasks, as it is considered to be too slow for high-volume semiconductor wafer production.
−Removed: However, should direct-write or any other alternative method of transferring IC or FPD designs without the use of photomasks achieve market acceptance, and if we are unable to anticipate, respond to, or utilize these or other technological changes, due to resource, technological, or other constraints, our business and results of operations could be materially adversely affected.
−Removed: Our operations will continue to require substantial capital expenditures, for which we may be unable to provide or obtain funding.
−Removed: The manufacture of leading-edge photomasks requires us to make substantial investments in high-end manufacturing capability.
−Removed: We expect that we will be required to continue to make substantial capital expenditures to meet the technological demands of our customers and to position us for future growth.
−Removed: Our capital expenditure payments for fiscal 2020 are expected to be approximately $100 million, of which approximately $14 million was included in accounts payable on our October 31, 2019 consolidated balance sheet.
−Removed: We cannot provide assurance that we will be able to obtain the additional capital required to fund our operations or capital expenditures on reasonable terms, if at all, or that any such inability will not have a material adverse effect on our business and results of operations.
−Removed: We have been dependent on sales to a limited number of large customers;
−Removed: the loss of any of these customers or a significant reduction in orders from these customers could have a material adverse effect on our revenues and results of operations.
−Removed: Historically, we have sold a significant proportion of photomasks to a limited number of IC and FPD manufacturers.
−Removed: During fiscal years 2019, 2018 and 2017, our two largest customers accounted for 31%, 31% and 32%, respectively, of our revenue.
−Removed: Our five largest customers accounted for 46%, 47% and 43% of our revenue in fiscal years 2019, 2018 and 2017, respectively .
−Removed: The loss of a significant customer, a significant reduction or delay in orders from any significant customer (including reductions or delays due to customer departures from recent buying patterns), or an unfavorable change in competitive conditions in the semiconductor or FPD industries could have a material adverse effect on our financial performance and business prospects.
−Removed: The consolidation of semiconductor manufacturers, or an economic downturn in the semiconductor industry, may increase the likelihood of losing a significant customer and could also have an adverse effect on our financial performance and business prospects.
We depend on a limited number of suppliers for equipment and raw materials and, if those suppliers fail to timely deliver their products to us, we may be unable to fulfill orders from our customers, which could adversely affect our business and results of operations.
We rely on a limited number of photomask equipment manufacturers to develop and supply the equipment we use.
−Removed: These equipment manufacturers currently require lead times of twelve months or longer between the order date and the delivery of certain photomask imaging and inspection equipment.
+Added: These equipment manufacturers usually require lead times of twelve months or longer between the order date and the delivery of certain photomask imaging and inspection equipment.
The failure of our suppliers to develop or deliver such equipment on a timely basis could have a material adverse effect on our business and results of operations.
4 unchanged sentences
The fluctuation of foreign currency exchange rates, with respect to prices of equipment and raw materials used in manufacturing, could also have a material adverse effect on our business and results of operations.
−Removed: We face risks associated with the use of sophisticated equipment and complex manufacturing processes and technologies.
−Removed: Our inability to effectively utilize such equipment and technologies and perform such processes could have a material adverse effect on our business and results of operations.
−Removed: Our complex manufacturing processes require the use of expensive and technologically sophisticated equipment and materials, and are continually modified in an effort to improve manufacturing yields and product quality.
−Removed: Minute impurities, defects, or other difficulties in the manufacturing process can lower manufacturing yields and render products unmarketable.
−Removed: Moreover, the manufacture of leading-edge photomasks is more complex and time consuming than manufacturing less advanced photomasks, and their fabrication may result in delays in the manufacture of all levels of photomasks.
−Removed: We have, on occasion, experienced manufacturing difficulties and capacity limitations that have delayed our ability to deliver products within the time frames contracted for by our customers.
−Removed: We cannot provide assurance that we will not experience these or other manufacturing difficulties, or be subject to increased costs, which could result in a loss of customers or otherwise have a material adverse effect on our business and results of operations.
−Removed: We could be subject to damages based on claims brought against us by our customers, or lose customers as a result of the failure of our products to meet certain quality specifications.
−Removed: Our products provide important performance attributes to our customers’ products.
−Removed: If a product fails to perform in a manner consistent with quality specifications, or has a shorter useful life than warranted, a customer could seek replacement of the product or damages for costs incurred as a result of the product failing to perform, particularly if such products are sold under agreements that contain limited performance and life cycle warrantees.
−Removed: Our customers often require us to represent that our products conform to certain product specifications that they provide.
−Removed: Any failure to comply with such specifications could result in claims or legal action.
−Removed: A successful claim, or series of claims, against us could have a material adverse effect on our financial condition and results of operations, and could result in a loss of one or more customers.
−Removed: Our credit facility restricts our business activities, limits our ability to obtain additional financing, pay cash dividends, and may obligate us to repay debt before its maturity.
+Added: We have been dependent on sales to a limited number of large customers;
+Added: the loss of any of these customers or a significant reduction in orders from these customers could have a material adverse effect on our revenues and results of operations.
+Added: Historically, we have sold a significant proportion of photomasks to a limited number of IC and FPD manufacturers.
+Added: During fiscal years 2020, 2019 and 2018, our two largest customers accounted for 29%, 31% and 31%, respectively, of our revenue.
+Added: Our five largest customers accounted for 45%, 46% and 47% of our revenue in fiscal years 2020, 2019 and 2018, respectively .
+Added: The loss of a significant customer, a significant reduction or delay in orders from any significant customer (including reductions or delays due to customer departures from recent buying patterns), or an unfavorable change in competitive conditions in the semiconductor or FPD industries could have a material adverse effect on our financial performance and business prospects.
+Added: The consolidation of semiconductor manufacturers, or an economic downturn in the semiconductor industry, may increase the likelihood of losing a significant customer and could also have an adverse effect on our financial performance and business prospects.
+Added: Financing Related Risk Factors
+Added: Our cash flows from operations and current holdings of cash may not be adequate for our current and long-term needs.
+Added: Our liquidity, as we operate in a high fixed-cost environment, is highly dependent on our revenue volume and the timing of our capital expenditures, which can vary significantly from period to period.
+Added: Depending on conditions in the semiconductor and FPD markets, our cash flows from operations and current holdings of cash may not be adequate to meet our current and long-term needs for capital expenditures, operations and debt repayments.
+Added: Historically, in certain years, we have used external financing to fund these needs.
+Added: Due to conditions in the credit markets and covenant restrictions on our existing debt, some financing instruments used by us in the past may not be available.
+Added: Therefore, we cannot provide assurance that additional sources of financing would be available to us on commercially favorable terms, if at all, should our cash requirements exceed our existing cash, operating cash flows, and cash available under our credit agreements.
+Added: Our credit facility restricts our business activities, limits our ability to obtain additional financing or pay cash dividends, and may obligate us to repay debt before its maturity.
Financial covenants related to our credit facility, which expires in September 2023, include a total leverage ratio, a minimum interest coverage ratio, and minimum unrestricted cash balances.
Our credit facility may also limit our flexibility in planning for, or reacting to, changes in our business and industry, which may place us at a competitive disadvantage compared with our competitors.
−Removed: We are also subject to covenants that limit our operating flexibility, such as a limit on the amount of shares we can repurchase of our common stock.
−Removed: Existing covenant restrictions limit our ability to obtain additional debt financing, and limit the amount of dividends, distributions, and redemptions we can pay on our common stock in 2019 to an aggregate amount of $100 million and $50 million annually thereafter.
+Added: We are also subject to covenants that limit our operating flexibility, such as a limit on the amount we can spend to repurchase shares of our common stock.
+Added: Existing covenant restrictions, and noncompliance with covenants or cross default provisions could limit our ability to draw down on current facilities or our ability to obtain additional debt financing, and limit the amount of dividends, distributions, and redemptions we can pay on our common stock to an annual amount of $50 million.
Should we be unable to meet one or more of these covenants, our lenders may require us to repay any outstanding balance prior to the expiration date of the agreement.
Our ability to comply with the financial and other covenants in our credit agreement may be affected by deteriorating economic or business conditions, or other events.
−Removed: We cannot assure that, under such circumstances, additional sources of financing would be available to fund operating requirements or repay any long-term borrowings, so as to avoid default.
+Added: We cannot assure that, under such circumstances, additional sources of financing would be available to fund operating requirements or repay any long-term borrowings, to avoid default.
+Added: Please also refer to Item 9A for discussion of material weakness.
+Added: Our operations will continue to require substantial capital expenditures, for which we may be unable to provide or obtain funding.
+Added: The manufacture of leading-edge photomasks requires us to make substantial investments in high-end manufacturing capability.
+Added: We expect that we will be required to continue to make substantial capital expenditures to meet the technological demands of our customers and to position us for future growth.
+Added: Our capital expenditure payments for fiscal 2021 are expected to be approximately $100 million, of which approximately $15 million was included in Accounts payable on our October 31, 2020 consolidated balance sheet.
+Added: We cannot provide assurance that we will be able to obtain the additional capital required to fund our operations or capital expenditures on reasonable terms, if at all, or that any such inability will not have a material adverse effect on our business and results of operations.
+Added: Servicing our debt requires a significant amount of cash, and we may not generate sufficient cash flows from our operations to pay our indebtedness.
+Added: Our ability to make scheduled payments of debt principal and interest, or to refinance our indebtedness, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
+Added: Our business may not continue to generate sufficient cash flows from operations to fund operations, service our debt and make necessary capital expenditures.
+Added: If we are unable to generate such cash flows, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous or highly dilutive.
+Added: Our ability to refinance our indebtedness would depend upon the conditions in the capital markets and our financial condition at such time.
+Added: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
+Added: Industry and Competitive Related Risk Factors
+Added: Our business depends on managerial and technical personnel, who are in great demand, and our inability to attract and retain qualified employees could adversely affect our business and results of operations.
+Added: Our success depends, in part, upon key managerial and technical personnel, as well as our ability to continue to attract and retain additional qualified personnel.
+Added: The loss of certain key personnel (i.e.
+Added: CEO, CTO, etc.) could have a material adverse effect on our business and results of operations.
+Added: We cannot offer assurance that we can retain our key managerial and technical employees, or that we can attract similar additional employees in the future.
+Added: The photomask industry is subject to rapid technological change, and we might fail to remain competitive, which could have a material adverse effect on our business and results of operations.
+Added: The photomask industry has been, and is expected to continue to be, characterized by technological change and evolving industry standards.
+Added: In order to remain competitive, we will be required to continually anticipate, respond to, and utilize changing technologies of increasing complexity in both traditional and emerging markets that we serve.
+Added: In particular, we believe that, as semiconductor geometries continue to become smaller and FPDs become larger or otherwise more advanced, we will be required to manufacture increasingly challenging photomasks.
+Added: Additionally, the demand for photomasks has been, and could in the future be, adversely affected by changes in semiconductor and high- performance electronics fabrication methods that affect the type or quantity of photomasks utilized, such as changes in semiconductor demand that favor field-programmable gate arrays and other semiconductor designs that replace application-specific ICs.
+Added: Furthermore, evidence of the viability and the corresponding market acceptance of alternative methods of transferring IC designs onto semiconductor wafers could reduce or eliminate the need for photomasks in the production of semiconductors.
+Added: As of the end of fiscal 2020, one alternative method, direct-write lithography, has not been proven to be a commercially viable alternative to photomasks, as it is considered to be too slow for high-volume semiconductor wafer production.
+Added: However, should direct-write or any other alternative method of transferring IC or FPD designs without the use of photomasks achieve market acceptance, and if we are unable to anticipate, respond to, or utilize these or other technological changes, due to resource, technological, or other constraints, our business and results of operations could be materially adversely affected.
+Added: The risk of loss of our intellectual property, trade secrets or other sensitive business or customer confidential information or disruption of operations due to breaches of cybersecurity could negatively impact our financial results.
+Added: Cyberattacks or security breaches could compromise confidential, business-critical information, cause disruptions in our operations, or harm our reputation.
+Added: We have important assets, including intellectual property, trade secrets, and other sensitive, business-critical and/or confidential information which may be vulnerable to such incidents.
+Added: While we have a comprehensive cybersecurity program that is continuously reviewed, maintained, and upgraded, a significant cyberattack could result in the loss of vital business or confidential information and/or could negatively impact operations, which could have a negative impact on our financial results.
+Added: We may be unable to enforce or defend our ownership and use of proprietary technology, and the utilization of unprotected company developed technology by our competitors could adversely affect our business, results of operations, and financial position.
+Added: We believe that the success of our business depends more on proprietary technology, information and processes, and know-how than on our patents or trademarks.
+Added: Much of our proprietary information and technology related to manufacturing processes is not patented and may not be patentable.
+Added: We cannot offer assurance that:
+Added: we will be able to adequately protect our technology;
+Added: competitors will not independently develop similar technology;
+Added: international intellectual property laws will adequately protect our intellectual property rights.
+Added: We may become the subject of infringement claims or legal proceedings by third parties with respect to current or future products or processes.
+Added: Any such claims, with or without merit, or litigation to enforce or protect our intellectual property rights that require us to defend against claimed infringements of the rights of others, could result in substantial costs, diversion of resources, and product shipment delays or could force us to enter into royalty or license agreements, rather than dispute the merits of these claims.
+Added: Any of the foregoing could have a material adverse effect on our business, results of operations, and financial position.
+Added: We operate in a highly competitive environment, and, should we be unable to meet our customers’ requirements for product quality, timeliness of delivery or technical capabilities, our revenue could be adversely affected.
+Added: The photomask industry is highly competitive, and most of our customers utilize more than one photomask supplier.
+Added: Our competitors include Compugraphics International, Ltd., Dai Nippon Printing Co., Ltd (outside of Taiwan and China), Hoya Corporation, LG Innotek Co., Ltd., Shenzhen New Way Photomask Making Co., Ltd., Shenzhen Quingyi Photomask, Ltd., SK-Electronics Co.
+Added: Ltd., Taiwan Mask Corporation, and Toppan Printing Co., Ltd.
+Added: We also compete with semiconductor and FPD manufacturers' captive photomask manufacturing operations, some of which market their photomask manufacturing services to outside customers.
+Added: We expect to face continued competition from these and other suppliers in the future.
+Added: Some of our competitors have substantially greater financial, technical, sales, marketing, or other resources than we do.
+Added: Also, when producing smaller geometry photomasks, some of our competitors may be able to more rapidly develop and produce such masks, and achieve higher manufacturing yields than we can.
+Added: We believe that consistency of product quality, timeliness of delivery, competitive pricing, technical capability and service are the principal factors considered by customers when selecting their photomask suppliers.
+Added: Our inability to meet these competitive requirements could have a material adverse effect on our business and results of operations.
+Added: In the past, competition has led to pressure to reduce prices and the need to invest in advanced manufacturing technology, which we believe contributed to the decrease in the number of independent photomask suppliers.
+Added: These pressures may continue in the future.
+Added: Investment Related Risk Factors
Joint ventures may not operate according to their business plans if our partners fail to fulfill their obligations, which may adversely affect our results of operations and compel us to dedicate additional resources to these joint ventures.
4 unchanged sentences
If such differences caused a joint venture to deviate from its business plan, our results of operations could be adversely affected.
+Added: Our expansion into China entails substantial risks.
+Added: In 2019, we commenced operations at our two newly constructed manufacturing facilities in China.
+Added: These investments are subject to substantial risks which may include, but are not limited to:
+Added: the inability to protect our intellectual property rights under Chinese law, which may not offer as high a level of protection as U.S.
+Added: unexpectedly long negotiation periods with Chinese suppliers and customers;
+Added: quality issues related to materials sourced from local vendors;
+Added: unexpectedly high labor costs due to a tight labor supply;
+Added: and difficulty in repatriating funds and selling or transferring assets.
+Added: Our investments in China also expose us to a significant additional foreign currency exchange risk, which we had not been subject to in recent years.
+Added: In addition, as tensions have escalated between the U.S.
+Added: and China, we believe there is an enhanced risk that our substantial investments in China may be subject to unforeseen restrictions, which may include expropriation of the investments by the Chinese government.
+Added: These and other risks may result in our not realizing a return on, or losing some, or all, of our planned investments in China, which would have a material adverse effect on our financial condition and financial performance.
+Added: We may incur unforeseen charges related to possible future facility closures or restructurings.
+Added: We cannot provide assurance that there will not be facility closures or restructurings in the near or long term, nor can we assure that we will not incur significant charges should there be any future facility closures or restructurings.
We may not be able to consummate future acquisitions or joint ventures or integrate acquisitions into our business, which could result in unanticipated expenses and losses.
12 unchanged sentences
difficulty in conforming the acquired businesses’ standards, processes, procedures and controls with our operations;
−Removed: variability in financial information arising from the implementation of purchase price accounting;
+Added: variability in financial performance arising from the implementation of purchase price accounting;
inability to coordinate new product and process development;
1 unchanged sentence
and challenges arising from the increased scope, geographic diversity, and complexity of our operations.
−Removed: Our expansion into China entails substantial risks.
−Removed: We have recently commenced operations at our two newly-constructed manufacturing facilities in China.
−Removed: These investments are subject to substantial risks which may include, but are not limited to:
−Removed: the inability to protect our intellectual property rights under Chinese law, which may not offer as high a level of protection as U.S.
−Removed: unexpectedly long negotiation periods with Chinese suppliers and customers;
−Removed: quality issues related to materials sourced from local vendors;
−Removed: unexpectedly high labor costs due to a tight labor supply;
−Removed: and difficulty in repatriating funds and selling or transferring assets.
−Removed: Our investments in China also expose us to a significant additional foreign currency exchange risk, which we had not been subject to in recent years.
−Removed: These and other risks may result in our not realizing a return on, or losing some, or all, of our planned investments in China, which would have a material adverse effect on our financial condition and financial performance.
−Removed: Our cash flows from operations and current holdings of cash may not be adequate for our current and long-term needs.
−Removed: Our liquidity, as we operate in a high fixed-cost environment, is highly dependent on our revenue volume and the timing of our capital expenditures, which can vary significantly from period to period.
−Removed: Depending on conditions in the semiconductor and FPD markets, our cash flows from operations and current holdings of cash may not be adequate to meet our current and long-term needs for capital expenditures, operations and debt repayments.
−Removed: Historically, in certain years, we have used external financing to fund these needs.
−Removed: Due to conditions in the credit markets and covenant restrictions on our existing debt, some financing instruments used by us in the past may not be available.
−Removed: Therefore, we cannot provide assurance that additional sources of financing would be available to us on commercially favorable terms, if at all, should our cash requirements exceed our existing cash, operating cash flows, and cash available under our credit agreements.
−Removed: We may incur unforeseen charges related to possible future facility closures or restructurings.
−Removed: We cannot provide assurance that there will not be facility closures or restructurings in the near or long term, nor can we assure that we will not incur significant charges should there be any future facility closures or restructurings.
−Removed: We operate in a highly competitive environment, and, should we be unable to meet our customers’ requirements for product quality, timeliness of delivery or technical capabilities, our revenue could be adversely affected.
−Removed: The photomask industry is highly competitive, and most of our customers utilize more than one photomask supplier.
−Removed: Our competitors include Compugraphics International, Ltd., Dai Nippon Printing Co., Ltd (outside of Taiwan and China), Hoya Corporation, LG Innotek Co., Ltd., Supermask Co., Ltd., SK-Electronics Co.
−Removed: Ltd., Shenzhen New Way Photomask Making Co., Ltd., Taiwan Mask Corporation, and Toppan Printing Co., Ltd.
−Removed: We also compete with semiconductor and FPD manufacturers' captive photomask manufacturing operations, some of which market their photomask manufacturing services to outside customers.
−Removed: We expect to face continued competition from these and other suppliers in the future.
−Removed: Some of our competitors have substantially greater financial, technical, sales, marketing, or other resources than we do.
−Removed: Also, when producing smaller geometry photomasks, some of our competitors may be able to more rapidly develop and produce such masks, and achieve higher manufacturing yields than we can.
−Removed: We believe that consistency of product quality, timeliness of delivery, competitive pricing, technical capability, and service are the principal factors considered by customers when selecting their photomask suppliers.
−Removed: Our inability to meet these competitive requirements could have a material adverse effect on our business and results of operations.
−Removed: In the past, competition has led to pressure to reduce prices and the need to invest in advanced manufacturing technology, which we believe contributed to the decrease in the number of independent photomask suppliers.
−Removed: These pressures may continue in the future.
+Added: Market Related Risk Factors
+Added: Changes in foreign currency exchange rates could have a material adverse effect on our results of operations, financial condition, or cash flows.
+Added: Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S.
+Added: GAAP) and are reported in U.S.
+Added: Our operations have transactions and balances denominated in currencies other than the U.S.
+Added: primarily the South Korean won, New Taiwan dollar, Japanese yen, Chinese renminbi, euro, Singapore dollar, and the British pound sterling.
+Added: In fiscal year 2020, we recorded a net loss from changes in foreign currency exchange rates of $0.5 million in our statement of income, while our net assets increased by $36.4 million as a result of the translation of foreign currency financial statements to U.S.
+Added: Significant foreign currency fluctuations may adversely affect our results of operations, financial condition, or cash flows.
+Added: Our hedging activity could negatively impact our results of operations and cash flows.
+Added: We may enter into derivatives to manage our exposure to interest rate and currency movements.
+Added: If we do not accurately forecast our results of operations, execute contracts that do not effectively mitigate our economic exposure to interest rates and currency rates, elect to not apply hedge accounting (when doing so would have mitigated our losses), or fail to comply with the complex accounting requirements for hedging transactions, our results of operations and cash flows could be volatile, as well as negatively impacted.
+Added: The market price of our common stock is subject to volatility and could fluctuate widely in response to various factors, many of which are beyond our control.
+Added: Factors that may influence the price of our common stock include, but are not limited to, the following:
+Added: loss of any of our key customers or suppliers;
+Added: additions or departures of key personnel;
+Added: third party sales of common stock;
+Added: our ability to execute our business plan, including but not limited to, our expansion into China;
+Added: announcements and consummations of business acquisitions;
+Added: operating results that fall below expectations;
+Added: issuances or repurchases of our common stock;
+Added: intellectual property disputes;
+Added: industry developments;
+Added: news or disclosures by competitors or customers;
+Added: business combinations, divestitures, or bankruptcies by customers, suppliers, or competitors;
+Added: economic and other external factors including (but not limited to) recessions, natural disasters, military actions, political instability, or social unrest;
+Added: period to period fluctuations in our financial results.
+Added: In addition, securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.
+Added: These market fluctuations may also materially and adversely affect the market price of our common stock.
+Added: Such fluctuations may be the result of imbalances between buy and sell offers, or low trading volume which can magnify the effects of a small number of transactions on the price of a stock.
We operate in a global, competitive environment which gives rise to operating and market risk exposure.
We sell our products in a competitive, global environment, and compete worldwide for sales on the basis of product quality, price, technology, and customer service.
−Removed: Sales of our products are also subject to federal, state, local, and foreign taxes, laws and regulations, trade agreements, import and export controls, and duties and tariffs.
−Removed: The imposition of additional regulations or controls including export controls and duties and tariffs or changes to bilateral and regional trade agreements, could negatively impact our results of operations.
−Removed: Our substantial non-US operations are subject to additional risks.
+Added: Sales of our products are also subject to federal, state, local, and foreign taxes, laws and regulations, trade agreements, import and export controls, duties and tariffs.
+Added: The imposition of additional regulations or controls including export controls, duties, tariffs, or changes to bilateral and regional trade agreements, could negatively impact our results of operations.
+Added: Operations Related Risk Factors
+Added: Our quarterly operating results fluctuate significantly, and may continue to do so in the future.
+Added: We have experienced fluctuations in our quarterly operating results, and we anticipate that such fluctuations will continue and could intensify in the future.
+Added: Fluctuations in operating results may result in volatility in the prices of our common stock and financial instruments linked to its value.
+Added: Operating results may fluctuate as a result of many factors, including the size and timing of orders and shipments, the loss of significant customers, changes in product mix, the flow of customer design releases, technological change, fluctuations in manufacturing yields, the actions of our competitors, and general economic conditions.
+Added: We operate in a high fixed-cost environment and, should our revenues and asset utilization decrease, our operating margins could be negatively impacted.
+Added: Our customers generally order photomasks on an as-needed basis;
+Added: thus our revenue in any quarter is dependent primarily on orders received during that quarter.
+Added: Since we operate with little backlog, and the rate of new orders may vary significantly from quarter to quarter, our capital expenditures and, to some extent, expense levels are based primarily on sales forecasts and technological advancements in photomask manufacturing equipment.
+Added: Consequently, if anticipated revenues in any quarter do not occur when expected, our capital investments could result in underutilized capacity and disproportionately high expense levels, causing operating results to be adversely affected.
+Added: Due to the foregoing factors, we believe that quarter to quarter comparisons of our operating results cannot be relied upon as indicators of future performance.
+Added: In addition, in future quarters, our operating results could be below guidance we may provide or the expectations of public market analysts and investors, which could have a material adverse effect on the market price of our common stock.
+Added: Our substantial non-U.S.
+Added: operations are subject to additional risks.
Revenues from our non-U.S.
2 unchanged sentences
This requires significant investments in financial, managerial, operational, and other resources.
−Removed: Since 1996, we have significantly expanded our operations in international markets by acquiring existing businesses in Europe, acquiring majority equity interests in photomask manufacturing operations in Korea and Taiwan, building a manufacturing facility for FPD photomasks in Taiwan, and two manufacturing facilities in China.
+Added: Since 1996, we have significantly expanded our operations in international markets by acquiring existing businesses in Europe and Asia, and building manufacturing facilities in Taiwan and China.
I n order to enable us to optimize our investments and other resources, we closely monitor the semiconductor and FPD manufacturing markets for indications of geographic movement and, in conjunction with these efforts, continue to assess the locations of our manufacturing facilities.
14 unchanged sentences
accounts receivable may be difficult to collect, or we may be subject to adverse tax consequences.
−Removed: These factors may have a material adverse effect on our ability to generate revenues outside of the United States and, consequently, on our business and results of operations.
+Added: These factors may have a material adverse effect on our costs or our ability to generate revenues outside of the United States and, consequently, on our business and results of operations.
+Added: We could be subject to damages based on claims brought against us by our customers, or lose customers as a result of the failure of our products to meet certain quality specifications.
+Added: Our products provide important performance attributes to our customers’ products.
+Added: If a product fails to perform in a manner consistent with quality specifications, or has a shorter useful life than warrantied, a customer could seek replacement of the product or damages for costs incurred as a result of the product failing to perform, particularly if such products are sold under agreements that contain limited performance and life cycle warranties.
+Added: Our customers often require us to guarantee that our products conform to certain product specifications that they provide.
+Added: Any failure to comply with such specifications could result in claims or legal action.
+Added: A successful claim, or series of claims, against us could have a material adverse effect on our financial condition and results of operations, and could result in a loss of one or more customers.
+Added: We face risks associated with the use of sophisticated equipment and complex manufacturing processes and technologies.
+Added: Our inability to effectively utilize such equipment and technologies and perform such processes could have a material adverse effect on our business and results of operations.
+Added: Our complex manufacturing processes require the use of expensive and technologically sophisticated equipment and materials, and are continually modified in an effort to improve manufacturing yields and product quality.
+Added: Minute impurities, defects, or other difficulties in the manufacturing process can lower manufacturing yields and render products unmarketable.
+Added: Moreover, the manufacture of leading-edge photomasks is more complex and time consuming than manufacturing less advanced photomasks, and their fabrication may result in delays in the manufacture of all levels of photomasks.
+Added: We have, on occasion, experienced manufacturing difficulties and capacity limitations that have delayed our ability to deliver products within the time frames contracted for by our customers.
+Added: We cannot provide assurance that we will not experience these or other manufacturing difficulties, or be subject to increased costs, which could result in a loss of customers or otherwise have a material adverse effect on our business and results of operations.
+Added: We have a high level of fixed costs.
+Added: As a consequence of the capital-intensive nature of the photomask manufacturing business, we have a high level of fixed costs and a high degree of operating leverage.
+Added: Accordingly, should our sales volumes decline as a result of a decrease in design releases from our customers or for any other reason, we may have excess or underutilized production capacity which could significantly impact our operating margins or result in write-offs from asset impairments.
+Added: Regulatory Related Risk Factors
+Added: Additional taxes could adversely affect our financial results.
+Added: Our tax filings are subject to audits by tax authorities in the various jurisdictions in which we do business.
+Added: These audits may result in assessments of additional taxes that are subsequently resolved with the taxing authorities or through the courts.
+Added: Currently, we believe there are no outstanding assessments whose resolution would result in a material adverse financial result.
+Added: However, we cannot offer assurances that unasserted or potential future assessments would not have a material adverse effect on our financial condition or results of operations.
Our business could suffer as a result of the United Kingdom’s decision to end its membership in the European Union.
5 unchanged sentences
Any of these effects of BREXIT, among others, could materially adversely affect our business, business opportunities, results of operations, financial condition, and cash flows.
−Removed: The United Kingdom’s deadline to leave the European Union has twice been extended, from its original date of March 31, 2019, to its current date of January 31, 2020.
−Removed: In light of the recent UK elections, BREXIT is now a virtual certainty.
−Removed: Changes in foreign currency exchange rates could have a material adverse effect on our results of operations, financial condition, or cash flows.
−Removed: Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S.
−Removed: GAAP) and are reported in U.S.
−Removed: Our operations have transactions and balances denominated in currencies other than the U.S.
−Removed: primarily the South Korean won, New Taiwan dollar, Japanese yen, Chinese renminbi, euro, Singapore dollar, and the British pound sterling.
−Removed: In fiscal year 2019, we recorded a net loss from changes in foreign currency exchange rates of $1.3 million in our statement of income, while our net assets decreased by $2.9 million as a result of the translation of foreign currency financial statements to U.S.
−Removed: Significant foreign currency fluctuations may adversely affect our results of operations, financial condition, or cash flows.
−Removed: Our business depends on managerial and technical personnel, who are in great demand, and our inability to attract and retain qualified employees could adversely affect our business and results of operations.
−Removed: Our success depends, in part, upon key managerial and technical personnel, as well as our ability to continue to attract and retain additional qualified personnel.
−Removed: The loss of certain key personnel (i.e.
−Removed: CEO, CTO, etc.) could have a material adverse effect on our business and results of operations.
−Removed: We cannot offer assurance that we can retain our key managerial and technical employees, or that we can attract similar additional employees in the future.
−Removed: We may be unable to enforce or defend our ownership and use of proprietary technology, and the utilization of unprotected company developed technology by our competitors could adversely affect our business, results of operations, and financial position.
−Removed: We believe that the success of our business depends more on proprietary technology, information and processes, and know-how than on our patents or trademarks.
−Removed: Much of our proprietary information and technology related to manufacturing processes is not patented and may not be patentable.
−Removed: We cannot offer assurance that:
−Removed: we will be able to adequately protect our technology;
−Removed: competitors will not independently develop similar technology;
−Removed: international intellectual property laws will adequately protect our intellectual property rights.
−Removed: We may become the subject of infringement claims or legal proceedings by third parties with respect to current or future products or processes.
−Removed: Any such claims, with or without merit, or litigation to enforce or protect our intellectual property rights that require us to defend against claimed infringements of the rights of others, could result in substantial costs, diversion of resources, and product shipment delays or could force us to enter into royalty or license agreements, rather than dispute the merits of these claims.
−Removed: Any of the foregoing could have a material adverse effect on our business, results of operations, and financial position.
+Added: The United Kingdom left the European Union on January 31, 2020, and is currently in a stand-still transition period which is scheduled to end on December 31, 2020.
+Added: Our products and technology could be subject to and negatively impacted by the recent expansion of the foreign-produced direct product rule.
+Added: In May 2019, the U.S.
+Added: Department of Commerce, Bureau of Industry and Security (“BIS”) amended export administration regulations by adding Huawei Technologies Co., Ltd.
+Added: (“Huawei”) and certain affiliates to the “Entity List” for actions contrary to the national security and foreign policy interests of the United States, imposing significant new restrictions on export, re-export and transfer of U.S.
+Added: regulated technologies and products to Huawei.
+Added: On August 17, 2020, BIS issued a final rule adding additional Huawei non-U.S.
+Added: affiliates to the Entity List, confirming the expiration of a temporary general license applicable to Huawei, and amended the foreign-produced direct product rule in a manner that represents a significant expansion of its application to Huawei.
+Added: Expansion of the foreign-produced direct product rule and additional companies being added to the entity list may adversely affect our business in various ways, including by:
+Added: increasing the cost of regulatory compliance for the export of our products, equipment, services, and technology from the United States and abroad;
+Added: increasing the time necessary to obtain required authorizations;
+Added: increasing the risk of monetary fines and other penalties for non-compliance, and negatively impacting our customers who may no longer be able to supply their customers and thereby reducing demand for their or our products.
+Added: Any of these effects could result in lost revenue, additional product costs, increased lead times and deployment delays that could harm our business and customer relationships.
+Added: Our products and technology could be subject to U.S.
+Added: export control laws and the export control laws of the foreign jurisdictions where we operate.
+Added: We are subject to various laws relating to the export of products we manufacture, and the technology related thereto, and our failure to comply with these laws could subject us to substantial fines, penalties, and even injunctions, the imposition of which could have a material adverse effect on the success of our business.
+Added: We are subject to the export control laws of the United States and the export control laws of the foreign jurisdictions where we operate.
+Added: On April 28, 2020, the U.S.
+Added: administration significantly expanded the reach of U.S.
+Added: export controls over certain products and certain countries.
+Added: Department of Commerce has, among other things:
+Added: expanded license requirements to China, Russia and Venezuela;
+Added: broadened the list of products covered by these expanded license requirements;
+Added: expanded the definition of “military end use”;
+Added: created a new “reason for control”;
+Added: created a new review policy for certain items to certain countries;
+Added: added substantial electronic export information filing requirements;
+Added: eliminated the license exception for civil end use for certain countries, including China, Russia and Venezuela;
+Added: and proposed to remove those same countries from the list of those eligible for additional re-exports license exceptions.
+Added: The final rules relating to most of these changes were effective June 29, 2020.
+Added: Application of these laws may adversely affect our business in various ways, including by regulating the export of our products, equipment, services, and technology from the United States and abroad, increasing the time necessary to obtain required authorizations, and the possibility of monetary fines and other penalties for non-compliance.
We may be unprepared for changes to environmental laws and regulations and may incur liabilities arising from environmental matters.
−Removed: We are subject to numerous environmental laws and regulations that impose various environmental controls on, among other things, the discharge of pollutants into the air and water and the handling, use, storage, disposal, and clean-up of solid and hazardous wastes.
+Added: We are subject to numerous environmental laws and regulations that impose various environmental controls on, among other things, the discharge of pollutants into the air and water and the handling, use, storage, disposal, and cleanup of solid and hazardous wastes.
Changes in these laws and regulations may have a material adverse effect on our financial position and results of operations, and inadequate compliance with their requirements could give rise to significant liabilities.
4 unchanged sentences
Additional information may arise in the future concerning the nature or extent of our liability with respect to identified sites and additional sites that may be identified, for which we are alleged to be liable.
+Added: General Risk Factors
+Added: Ineffective internal controls could impact our business and operating results.
+Added: Our internal controls over financial reporting may not prevent or detect misstatements because of their inherent limitations in detecting human errors, the circumvention or overriding of controls, or fraud;
+Added: even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.
+Added: If we fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls;
+Added: otherwise fail to prevent financial reporting misstatements;
+Added: or if we experience difficulties in implementing internal controls, our business and operating results could be harmed, and we could fail to meet our financial reporting obligations.
+Added: In our assessment of internal control over financial reporting for the fiscal year ended October 31, 2020, we identified a material weakness.
+Added: Please refer to Item 9A of this annual report on Form 10-K for further information.
+Added: Our business could be adversely impacted by global or regional catastrophic events.
+Added: Our business could be adversely affected by terrorist acts, widespread outbreaks of infectious diseases (such as the COVID-19 pandemic), government responses such as shelter-in-place directives to limit the impact of infectious diseases, or the outbreak or escalation of wars, especially in the Asian markets in which we generate a significant portion of our sales and in Japan where we purchase raw materials and capital equipment.
+Added: Such events in the geographic regions in which we do business, including escalations of political tensions and military conflicts within the Korean Peninsula, or between the People’s Republic of China and the U.S.
+Added: or the Republic of China (Taiwan), could have material adverse impacts on our revenue, cost and availability of raw materials, results of operations, cash flows, and financial condition.
Our production facilities could be damaged or disrupted by natural disasters or labor strikes, either of which could adversely affect our financial position, results of operations, and cash flows.
6 unchanged sentences
Economic downturns may lead to a decrease in demand for end products whose manufacturing processes involve the use of photomasks, which may result in a reduction in new product design and development by semiconductor or FPD manufacturers, and adversely affect our results of operations and cash flows.
−Removed: Additional taxes could adversely affect our financial results.
−Removed: Our tax filings are subject to audits by tax authorities in the various jurisdictions in which we do business.
−Removed: These audits may result in assessments of additional taxes that are subsequently resolved with the taxing authorities or through the courts.
−Removed: Currently, we believe there are no outstanding assessments whose resolution would result in a material adverse financial result.
−Removed: However, we cannot offer assurances that unasserted or potential future assessments would not have a material adverse effect on our financial condition or results of operations.
−Removed: Our business could be adversely impacted by global or regional catastrophic events.
−Removed: Our business could be adversely affected by terrorist acts, widespread outbreaks of infectious diseases, or the outbreak or escalation of wars, especially in the Asian markets in which we generate a significant portion of our sales and in Japan where we purchase raw materials and capital equipment.
−Removed: Such events in the geographic regions in which we do business, including escalations of political tensions and military operations within the Korean Peninsula, where a significant portion of our foreign operations are located, could have material adverse impacts on our revenue, cost and availability of raw materials, results of operations, cash flows, and financial condition.
−Removed: Servicing our debt requires a significant amount of cash, and we may not generate sufficient cash flows from our operations to pay our indebtedness.
−Removed: Our ability to make scheduled payments of debt principal and interest, or to refinance our indebtedness, depends on our future performance, which is subject to economic, financial, competitive, and other factors beyond our control.
−Removed: Our business may not continue to generate sufficient cash flows from operations to fund operations, service our debt and make necessary capital expenditures.
−Removed: If we are unable to generate such cash flows, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt, or obtaining additional equity capital on terms that may be onerous or highly dilutive.
−Removed: Our ability to refinance our indebtedness would depend upon the conditions in the capital markets and our financial condition at such time.
−Removed: We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
−Removed: Our hedging activity could negatively impact our results of operations and cash flows.
−Removed: We may enter into derivatives to manage our exposure to interest rate and currency movements.
−Removed: If we do not accurately forecast our results of operations, execute contracts that do not effectively mitigate our economic exposure to interest rates and currency rates, elect to not apply hedge accounting, or fail to comply with the complex accounting requirements for hedging transactions, our results of operations and cash flows could be volatile, as well as negatively impacted.
−Removed: The market price of our common stock is subject to volatility and could fluctuate widely in response to various factors, many of which are beyond our control.
−Removed: Factors that may influence the price of our common stock include, but are not limited to, the following:
−Removed: loss of any of our key customers or suppliers;
−Removed: additions or departures of key personnel;
−Removed: third party sales of common stock;
−Removed: our ability to execute our business plan, including but not limited to, our expansion into China;
−Removed: announcements and consummations of business acquisitions;
−Removed: operating results that fall below expectations;
−Removed: issuances or repurchases of our common stock;
−Removed: intellectual property disputes;
−Removed: industry developments;
−Removed: news or disclosures by competitors or customers;
−Removed: business combinations, divestitures, or bankruptcies by customers, suppliers, or competitors;
−Removed: economic and other external factors;
−Removed: period-to-period fluctuations in our financial results.
−Removed: In addition, securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.
−Removed: These market fluctuations may also materially and adversely affect the market price of our common stock.
−Removed: Such fluctuations may be the result of imbalances between buy and sell offers, or low trading volume which can magnify the effects of a small number of transactions on the price of a stock.
−Removed: Ineffective internal controls could impact our business and operating results.
−Removed: Our internal controls over financial reporting may not prevent or detect misstatements because of their inherent limitations in detecting human errors, the circumvention or overriding of controls, or fraud;
−Removed: even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.
−Removed: fail to maintain the adequacy of our internal controls, including any failure to implement required new or improved controls;
−Removed: otherwise fail to prevent financial reporting misstatements;
−Removed: or if we experience difficulties in implementing internal controls, our business and operating results could be harmed, and we could fail to meet our financial reporting obligations.
+Added: Technology failures or cyber security breaches could have a material adverse effect on our operations.
+Added: We rely on information technology systems to process, transmit, store, and protect electronic information.
+Added: For example, a significant portion of the communications between our personnel, customers, and suppliers depends on information technology.
+Added: Our information technology systems may be vulnerable to a variety of interruptions due to events beyond our control, including, but not limited to, natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers, and other security issues.
+Added: Although we have technology and information security processes and disaster recovery plans in place to mitigate our risks to these vulnerabilities, these measures may not be adequate to ensure that our operations will not be disrupted, should such an event occur.
+Added: The General Data Protection Regulation (GDPR), which went into effect in the European Union (EU) on May 25, 2018, applies to the collection, use, retention, security, processing, and transfer of personally identifiable information of residents of EU countries.
+Added: The GDPR created a range of new compliance obligations, and imposes significant fines and sanctions for violations.
+Added: It is possible that the GDPR may be interpreted or applied in a manner that is adverse to, or unforeseen by us, including requirements that are inconsistent with our practices, or that we may otherwise fail to construe its requirements in ways that are satisfactory to the EU authorities.
+Added: Any failure, or perceived failure, by us to comply with the GDPR, or with any applicable regulatory requirements or orders, including but not limited to privacy, data protection, information security, or consumer protection related privacy laws and regulations, in one or more jurisdictions within the EU or elsewhere, could:
+Added: result in proceedings or actions against us by governmental entities or individuals;
+Added: subject us to significant fines, penalties, and/or judgments;
+Added: require us to change our business practices;
+Added: limit access to our products and services in certain countries, or otherwise adversely affect our business, as we would be at risk to lose both customers and revenue, and incur substantial costs.
+Added: We may, in the future, incur net losses.
+Added: Although we have been profitable since fiscal 2010, we have, in the past, incurred net losses.
+Added: We cannot provide assurance that we will not incur net losses in the future.
UNRESOLVED STAFF COMMENTS
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.