What changed in this filing

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Item 1. Legal Proceedings

2025-05-07 compared with 2024-11-05 · 52 added, 1 removed, 5 unchanged (91% of the section changed)

4 unchanged sentences

Such risk factors continue to be relevant to an understanding of our business, financial condition and operating results.

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes with respect to such risk factors.

As of the date of this Quarterly Report on Form 10-Q, there have been the following material changes with respect to such risk factors.

Changes in U.S.

trade policy and the impact of tariffs may have a material adverse effect on our business and results of operations.

Our business and results of operations may be adversely affected by uncertainty and changes in U.S.

trade policies, including tariffs, trade agreements or other trade restrictions imposed by the U.S.

or other governments.

For example, beginning in the first quarter of 2025, the U.S.

administration has announced, delayed, re-imposed and revised a series of broad-based, as well as country-, bloc- and sector-specific, tariffs on goods imported into the United States, as well as other trade policy changes, such as the elimination of the “de minimis” exemption from customs duties and taxes for imported goods from China and Hong Kong falling below a threshold value, which is expected to come into effect in May 2025.

Such actions have given, and may continue to give, rise to further escalations of trade measures by the United States and impacted countries, including the announcement of retaliatory tariffs on certain goods imported from the

United States.

Further developments with regard to the timing and manner in which tariffs are implemented, the amount, scope and nature of tariffs, the countries subject to new or additional tariffs imposed by the United States, and tariffs imposed by other countries on goods imported from the United States are rapidly evolving and may change unexpectedly at any time, making it difficult for us to predict future developments regarding global tariffs or other trade restrictions or their ultimate effects on our business and results of operations.

Our business requires access to certain raw materials and components used in our products, including technology, substrates, and other materials which we source from multiple suppliers located in various countries.

In addition, some manufacturing equipment and spare parts purchased from various countries may also be affected.

Any imposition of or increase in tariffs on imports of such materials, as well as corresponding price increases for such materials, may increase our costs.

To the extent that we are unable to pass all or any such cost increases on to our customers, such cost increases could adversely affect our profitability.

Higher materials costs could also diminish our ability to develop new projects, particularly during times of economic uncertainty, and limit our ability to pursue growth opportunities.

In addition, tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S.

and global financial and economic conditions, declining consumer confidence and inflation, and ultimately reduced demand for our products and services.

Such conditions could have a material adverse impact on our business, results of operations and cash flows.

Also, disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital.

Such adverse changes could increase our costs of capital and limit our access to external financing sources to fund acquisitions, capital projects, or refinancing of debt maturities on similar terms, which could in turn reduce our cash flows and limit our ability to pursue growth opportunities.

There is no guarantee that we can avoid the impact of tariff and related economic effects in the future, and these trade measures and retaliations may directly impair our business by reducing demand for our products and services, increasing trade-related costs or disrupting established supply chains.

Risks Related to our Acquisition of Arroweye.

We may not realize the potential benefits from the acquisition of Arroweye because of difficulties related to integration, the achievement of synergies and other challenges.

We completed the acquisition of Arroweye on May 6, 2025 (the “Acquisition”).

Prior to the completion of the Acquisition, we and Arroweye operated independently, and there can be no assurances that our businesses can be combined in a manner that allows for the achievement of substantial benefits.

Any integration process may require significant time and resources, and we may not be able to manage the process successfully.

If we are not able to successfully integrate Arroweye’s business with ours, the anticipated benefits of the Acquisition may not be realized fully or may take longer than expected to be realized.

Specifically, the following issues, among others, must be addressed in combining Arroweye’s operations with ours in order to realize the anticipated benefits of the Acquisition so the combined company performs as the parties anticipate:

● combining the companies’ logistics, marketing, and administration methods;

● combining Arroweye ’s business with our business in a manner that permits us to achieve the synergies anticipated to result from the Acquisition, the failure of which would result in the anticipated benefits of the Acquisition not being realized in the time frame currently anticipated or at all;

● maintaining existing agreements with customers, suppliers and talent and avoiding delays in entering into new agreements with prospective customers, suppliers, and talent;

● determining whether and how to address possible differences in corporate cultures and management philosophies;

● integrating the companies’ administrative and information technology infrastructure;

● developing products and technology that allow value to be unlocked in the future;

● ensuring the effectiveness of Arroweye ’s internal control over financial reporting;

● evaluating and forecasting the financial impact of the Acquisition transaction, including accounting charges.

In addition, at times the attention of certain members of our management and resources may be focused on integration of the businesses of the two companies and diverted from day-to-day business operations, which may disrupt our ongoing business and the business of the combined company.

We have incurred, and may continue to incur, significant, non-recurring costs in connection with the Acquisition and integrating the operations of CPI and Arroweye.

Management cannot ensure that the elimination of duplicative costs or the realization of other efficiencies will offset the transaction and integration costs in the near term or at all.

We funded the Acquisition with significant additional indebtedness.

If we are unable to generate or borrow sufficient cash to make payments on our indebtedness, our financial condition could be materially harmed.

We utilized $35 million of our ABL Revolver borrowing capacity to fund the Acquisition.

Our ability to repay or refinance our borrowings will depend on our financial and operating performance, which will be affected by economic, financial, competitive, business and other factors, some of which are beyond our control.

We cannot guarantee that our business will generate sufficient cash flow from operations to service our indebtedness or to fund our other liquidity needs.

If we are unable to meet our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our indebtedness on or before maturity or sell certain of our assets.

We cannot guarantee that we will be able to restructure or refinance any of our indebtedness on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity.

Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations .

Unregistered Sales of Equity Securities and Use of Proceeds

Defaults Upon Senior Securities

Mine Safety Disclosures

Not applicable.

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-Q

Item 1. Legal Proceedings