What changed in this filing

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Item 1A. Risk Factors

2025-02-07 compared with 2024-02-12 · 37 added, 30 removed, 220 unchanged (23% of the section changed)

17 unchanged sentences

● our ability to develop and bring to market new products and technologies on a timely basis;

● undetected defects and failures in meeting the exact specifications required by our products;

● warranty claims, product liability claims and product recalls;

● failure, disruption, security breaches, or other incidents impacting our information technology infrastructure or information management systems;

1 unchanged sentence

● competitive pressures on selling prices;

● we face risks related to the Novel Coronavirus pandemic (“COVID-19”), which has disrupted and may again disrupt our operations, including our manufacturing, research and development, and sales and marketing activities, which could have a material adverse impact on our business, financial condition, operating results and cash flows;

● risks associated with our supply chain including, the volume, cost and timing of delivery of orders placed by us with our wafer foundries and assembly subcontractors, and their ability to procure materials;

1 unchanged sentence

● the lengthy timing of our sales cycle;

● earthquakes, fire, pandemics or other disasters;

● undetected defects and failures in meeting the exact specifications required by our products;

● earthquakes, fire or other disasters;

● we face risks related to global health crises, which has disrupted and may again disrupt our operations, including our manufacturing, research and development, and sales and marketing activities, which could have a material adverse impact on our business, financial condition, operating results and cash flows;

● fluctuations in exchange rates, particularly the exchange rate between the U.S.

9 unchanged sentences

Risks Related to the Operation and Growth of Our Business

If demand for our products continues to decline in our major end markets, our net revenues will continue to decline further.

If demand for our products continues to decline in our major end markets, our net revenues will decline further.

When our customers are not successful in maintaining high levels of demand for their products, their demand for our ICs decreases, which adversely affects our operating results.

A limited number of applications of our products, such as cellphone chargers and consumer appliances, make up a significant percentage of our net revenues.

A limited number of applications of our products, such as consumer appliances and cellphone chargers, make up a significant percentage of our net revenues.

We expect that a significant level of our net revenues and operating results will continue to be dependent upon these applications in the near term.

20 unchanged sentences

Not only does the volume of units ordered by particular customers vary substantially from period to period, but also purchase orders received from particular customers often vary substantially from early oral estimates provided by those customers for planning purposes.

In addition, customer

orders can be canceled or rescheduled without significant penalty to the customer.

In addition, customer orders can be canceled or rescheduled without significant penalty to the customer.

In the past, we have experienced customer cancellations of substantial orders for reasons beyond our control, and significant cancellations could occur again at any time.

26 unchanged sentences

When a potential liability exists we will maintain reserves for customer returns, however we cannot assure that these reserves will be adequate.

Our products must meet exacting specifications, and undetected defects and failures may occur which may cause customers to return or stop buying our products and/or impose significant costs to us.

Our customers generally establish demanding specifications for quality, performance and reliability, and our products must meet these specifications.

ICs as complex as those we sell often encounter development delays and may contain undetected defects or failures when first introduced or after commencement of commercial shipments.

We have from time to time in the past experienced product quality, performance or reliability problems.

If defects and failures occur in our products, we could experience lost revenue, increased costs, including product warranty or liability claims and costs associated with customer support and product recalls, delays in or cancellations or rescheduling of orders or shipments and product returns or discounts.

While we specifically exclude consequential damages in our standard terms and conditions, certain of our contracts may not exclude such liabilities.

Our liability insurance which covers certain damages arising out of product defects may not cover all claims or be of a sufficient amount to fully protect against such claims.

Costs or payments in connection with such claims could harm our operating results.

Warranty claims, product liability claims and product recalls could harm our business, results of operations and financial condition.

We face an inherent business risk of exposure to warranty and product liability claims if products fail to perform as expected or any such failure is alleged to result in bodily injury, death, and/or property damage.

In addition, if any of our designed products are alleged to be defective, we may be required to participate in their recalls.

Some OEMs expect suppliers to warrant their products for longer periods of time and are increasingly looking to them for contribution when faced with product liability claims or recalls.

We carry various commercial liability policies, including umbrella/excess policies which provide some protection against product liability exposure.

However, a successful warranty or product liability claim against us in excess of our available insurance coverage, or a requirement that we participate in a product recall, could have adverse effects on our business results.

Further, in the future, it is possible that we will not be able to obtain insurance coverage in the amounts and for the risks we seek at policy costs and terms we desire.

Additionally, if our products fail to perform as expected or such failure of our products results in a recall, our reputation may be damaged, which could make it more difficult for us to sell our products to existing and prospective customers and could materially and adversely affect our business, results of operations and financial condition.

Any failure, disruption or security breach or incident otherwise impacting our information technology infrastructure or information management systems could have an adverse impact on our business and operations.

Cyber-attacks have become increasingly more prevalent and much harder to detect, defend against or prevent.

As the frequency of cyber-attacks and resulting breaches reported by other businesses and governments increases, we expect to continue to devote significant resources to improve and maintain our IT infrastructure.

We have incurred and may in the future incur significant costs in order to implement, maintain and/or update security systems we believe are necessary to protect our IT infrastructure.

As the techniques used to obtain unauthorized access or to sabotage systems change frequently and are often not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventive measures.

effect on our financial position and value of our stock.

A breakdown in existing controls and procedures around our cyber-security environment may prevent us from detecting, reporting or responding to cyber incidents in a timely manner and could have a material adverse effect including but not limited to i nterruptions or delays in our business operations, loss of existing or future customers, and damage to our reputation, which could adversely affect our business, reputation, and financial results .

We cannot guarantee that our implemented processes for IT and risk mitigation measures will be effective for IT systems under our control.

6 unchanged sentences

We rely on the efficient and uninterrupted operation of complex information technology systems and networks to operate our business.

Any significant system or network disruption, including but not limited to new system implementations, computer viruses, security breaches, or energy blackouts could have a material adverse impact on our operations, sales and operating results.

Any significant system or network disruption, including but not limited to new system implementations, faulty software provided by one of our security vendors, computer viruses, security breaches, or energy blackouts could have a material adverse impact on our operations, sales and operating results.

We have implemented measures to manage our risks related to such disruptions, but such disruptions could still occur and negatively impact our operations and financial results.

11 unchanged sentences

We believe our failure to compete successfully in the high-voltage power supply business, including our ability to introduce new products with higher average selling prices, would materially harm our operating results.

We face risks related to global health crises, such as the COVID-19 pandemic, which have disrupted and may again disrupt our operations, including our manufacturing, research and development, and sales and marketing activities, which could have a material adverse impact on our business, financial condition, operating results and cash flows .

Our business as well as the business of our suppliers, customers and distributors was impacted by the COVID-19 pandemic and may in the future be adversely impacted by the world-wide response to any further global health crises.

Such impacts include public health measures, travel restrictions, business shutdowns, border closures, delivery and freight delays and other disruptions.

These disruptions may adversely affect not only our sales and marketing activities, product development, manufacturing and product shipments which could negatively impact our ability to meet customer commitments but also our customers’ ability to manufacture their products, which could reduce their demand for our products.

The COVID-19 pandemic caused a significant economic downturn in local and global economies and in financial markets.

Any future global health crisis could have similar economic consequences which may result in reduced demand for our products and have a material adverse effect on our revenues, customer relationships, operating results, cash flows, financial condition and stock price.

We depend on third-party suppliers to provide us with wafers for our products and if they fail to provide us sufficient quantities of wafers, our business may suffer .

24 unchanged sentences

The loss of the services of one or more of our engineers, executive officers or other key personnel could harm our business.

In addition, if one or more of these individuals leaves our employ, and we are unable to quickly and efficiently replace those individuals with qualified personnel who can smoothly transition into their new roles, our business may suffer.

In addition, if one or more of these individuals leaves our employ, and we are

unable to quickly and efficiently replace those individuals with qualified personnel who can smoothly transition into their new roles, our business may suffer.

We do not have long-term employment contracts with, and we do not have in place key person life insurance policies on, any of our employees.

11 unchanged sentences

Any interruption in our ability, or that of our major suppliers, to continue operations could delay the development and shipment of our products and have a substantial negative impact on our financial results.