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• our reliance on a limited number of distributors for our products and the inability of our distributors to manage inventory of our products effectively, timely sell our products or estimate future demand for our products;
−Removed: • our inventory decisions, including, without limitation, for new product introductions, are based on assumptions and forecasts, which, if inaccurate, may result in write-downs of inventory or components;
+Added: • our inventory decisions, including, without limitation, for new product introductions, are based on assumptions and forecasts, which, if inaccurate, may result in write-downs of inventory or components and increases of vendor deposits;
• our inability to keep pace with rapid technological and market changes or to maintain competitive prices for products;
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• our reliance on a limited number of contract manufacturers to manufacture our products, and potential quality or product supply problems for our products if we are unable to secure sufficient components for our products or there is a shortage of manufacturing capacity;
−Removed: • our reliance on a limited number of suppliers and our inability to predict shortages in components, such as the global shortage in chipsets, or other supply disruptions, including, without limitation, as a result of COVID-19, the military conflict between Russia and Ukraine, the escalating tensions between China and Taiwan, or our failure to identify or qualify alternative suppliers;
−Removed: • disruption to the manufacturing or shipping of our products due to natural disasters, labor shortages or operational reductions from outbreaks of diseases or other public health events, including, without limitation, COVID-19, the military conflict between Russia and Ukraine, the escalating tensions between China and Taiwan, or similar disruptions in the countries or regions in which our contract manufacturers or logistics contractors are located;
+Added: • our reliance on a limited number of suppliers and our inability to predict shortages in components, such as the global shortage in chipsets, or other supply disruptions as a result of, including, without limitation, the military conflict between Russia and Ukraine, the escalating tensions between China and Taiwan, or our failure to identify or qualify alternative suppliers;
+Added: • disruption to the manufacturing or shipping of our products due to natural disasters, labor shortages or operational reductions from outbreaks of diseases or other public health events, the military conflict between Russia and Ukraine, the escalating tensions between China and Taiwan, or similar disruptions in the countries or regions in which our contract manufacturers or logistics contractors are located;
• a global economic downturn;
−Removed: • lower than expected returns from our investments in growth areas or our enterprise and service provider technologies;
+Added: • lower than expected returns and exposure to increased operational risks from our investments in business lines, products, services, technologies, joint ventures and other strategic transactions;
+Added: • our enterprise and service provider technologies;
• the ineffective management of product introductions, product transitions and marketing or our inability to remain competitive and stimulate customer demand for our products;
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• the risks of expanding our product offerings or our operations or increases in our operating expenses;
−Removed: • exposure to increased operational risks associated with our investments in new businesses, products, services, technologies, joint ventures and other strategic transactions;
• our reliance on third-party software and services for certain aspects of our operations, including, without limitation, our financial reporting functions;
−Removed: • our inability to integrate future acquisitions;
−Removed: • changes in LIBOR reporting practices and the index used to replace LIBOR;
+Added: • uncertainty surrounding the elimination of LIBOR and the transition to SOFR;
• our reliance on our founder and chief executive officer, who owns a majority of our common stock;
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Risks Related to Our Business and Industry
−Removed: We have limited visibility into future sales, which makes it difficult to forecast our future results of operations.
+Added: We have limited visibility into future sales as a result of our reliance on distributors, which may increase volatility in our results and makes it difficult to forecast our future results of operations.
Because of our limited visibility into end customer demand and channel inventory levels, our ability to accurately forecast our future sales is limited.
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This information has been generally difficult to obtain in a timely manner, and we cannot always be certain that the information is reliable.
−Removed: If we over forecast demand, we may not be able to decrease our expenses in time to offset any shortfall in revenues, which could harm our ability to achieve or sustain expected results of operations.
−Removed: If we under forecast demand, our ability to fulfill sales orders will be compromised and sales to distributors may be deferred or lost altogether, which would reduce our revenues and could harm our ability to achieve or sustain expected results of operations.
−Removed: The markets we serve can be especially volatile, and weakness in orders could harm our future results of operations.
−Removed: Weakness in orders, directly or indirectly, from the markets we serve, including as a result of any slowdown in capital expenditures by the markets we service (which may be more prevalent during a global economic downturn, or periods of economic, political or regulatory uncertainty), could have a material adverse effect on our business, results of operations, liquidity and financial condition.
−Removed: Such slowdowns may continue or recur in future periods.
−Removed: Orders from the markets we serve could decline for many reasons other than the competitiveness of our products and services within their respective markets.
−Removed: These conditions have harmed our business and results of operations in the past, and some of these or other conditions in the markets we serve could affect our business and results of operations, liquidity or financial condition in any future period of such slowdowns.
−Removed: We are subject to risks associated with our distributors’ inventory management practices.
+Added: If we over forecast demand, we may build excess inventory, increase vendor deposits and we may not be able to decrease our expenses in time to offset any shortfall in revenues, which could harm our ability to achieve or sustain expected results of operations.
+Added: If we under forecast demand, our ability to fulfill sales orders will be compromised and sales to distributors may be deferred or lost altogether, which may impair our distributor relationships, would reduce our revenues and could harm our ability to achieve or sustain expected results of operations.
Our distributors purchase and maintain their own inventories of our products, and we do not control their inventory management.
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If some distributors decide to purchase less of our products than are required to satisfy their customers’ demand in any particular quarter, because they do not accurately forecast demand or otherwise, sales of our products may be deferred or lost altogether, which could materially adversely affect our results of operations.
−Removed: If our forecasts of future sales are inaccurate, we may manufacture too many or not enough products.
−Removed: We may over or under forecast our customers’ actual demand for our products or the actual mix of our products that they will ultimately demand.
−Removed: If we over-forecast demand, we may build excess inventory which could materially adversely affect our operating results.
−Removed: If we under-forecast demand, we may miss opportunities for sales and may impair our customer relationships, which could materially adversely affect our results of operations.
−Removed: The lead times that we face for the procurement of components and subsequent manufacturing of our products are usually much longer than the lead time from our customers’ orders to the expected delivery date.
−Removed: This increases the risk that we may manufacture too many
−Removed: or not enough products in any given period.
+Added: In addition, the lead times that we face for the procurement of components and subsequent manufacturing of our products are usually much longer than the lead time from our customers’ orders to the expected delivery date.
+Added: This increases the risk that we may manufacture too many or not enough products in any given period.
This risk may be further exacerbated by supply chain constraints on the global supply of components, particularly the chipsets, that we use to manufacture our products, as well as longer shipping lead times and delays .
−Removed: We may need to build inventory for new product announcements and shipments or decide to increase or maintain higher levels of inventory, which may result in inventory write-downs.
−Removed: The Company must order components for its products and build inventory, both of finished products and components, in advance of new product announcements and shipments.
−Removed: Decisions to build inventory for new products or to increase or maintain higher inventory levels are typically based upon uncertain forecasts or other assumptions and may expose us to a greater risk of carrying excess or obsolete inventory.
−Removed: Because the markets in which the Company competes are volatile, competitive and subject to rapid technology and price changes, if the assumptions on which we base these decisions turn out to be incorrect, our financial performance could suffer and we could be required to write-off the value of excess products or components inventory or not fully utilize firm purchase commitments.
+Added: The markets we serve can be especially volatile, and weakness in orders could harm our future results of operations.
+Added: Weakness in orders, directly or indirectly, from the markets we serve, including as a result of any slowdown in capital expenditures by the markets we service (which may be more prevalent during a global economic downturn, or periods of economic, political or regulatory uncertainty), could have a material adverse effect on our business, results of operations, liquidity and financial condition.
+Added: Such slowdowns may continue or recur in future periods.
+Added: Orders from the markets we serve could decline for many reasons other than the competitiveness of our products and services within their respective markets.
+Added: These conditions have harmed our business and results of operations in the past, and some of these or other conditions in the markets we serve could affect our business and results of operations, liquidity or financial condition in any future period of such slowdowns.
+Added: We may need to build inventory for new product announcements and shipments or decide to increase or maintain higher levels of inventory, which may result in inventory write-downs and/or increased vendor deposits.
+Added: The Company must order components for its products, build inventory, both of finished products and components, and in certain cases, pay vendor deposits in advance of new product announcements and shipments.
+Added: Decisions to build inventory for new products or to increase or maintain higher inventory levels and vendor deposit levels are typically based upon uncertain forecasts or other assumptions and may expose us to a greater risk of carrying excess or obsolete inventory.
+Added: Because the markets in which the Company competes are volatile, competitive and subject to rapid technology changes, price changes, shortages and other disruptions, if the assumptions on which we base these decisions turn out to be incorrect, our financial performance could suffer and we could be required to write-off the value of excess products or components inventory, increase vendor deposits or not fully utilize firm purchase commitments.
We rely upon a limited number of distributors, and changes in our relationships with our distributors or changes within our distributors may disrupt our sales.
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We may not be able to enhance our products to keep pace with technological and market developments while offering competitive prices.
−Removed: The market for our wireless broadband networking equipment is emerging and is characterized by rapid technological change, evolving industry standards, frequent new product introductions and short product life cycles.
+Added: The market for our wireless broadband networking equipment is characterized by rapid technological change, evolving industry standards, frequent new product introductions and short product life cycles.
The markets for enterprise networking equipment and consumer products possess similar characteristics of rapid technological updates, evolving industry standards, frequent changes in consumer preferences, frequent new product introductions and short and unpredictable product life cycles.
−Removed: Our ability to keep pace in these markets depends upon our ability to enhance our current products, and continue to develop and introduce new products rapidly and at competitive prices.
−Removed: The success of new product introductions or updates on existing products depends on a number of factors including, but not limited to, timely and successful product development, market acceptance, our ability to manage the risks associated with new product production ramp-up, the effective management of our inventory and manufacturing schedule and the risk that new products may have defects or other deficiencies in the early stages of introduction.
+Added: Our ability to keep pace in these markets depends upon our ability to enhance our current products, and to continue to develop and introduce new products rapidly and at competitive prices.
+Added: The success of new product introductions or updates on existing products depends on a number of factors including, but not limited to, timely and successful product development, market acceptance, development of sales channels, our ability to manage the risks associated with new product forecast, production ramp-up, the effective management of our inventory and manufacturing schedule and the risk that new products may have defects or other deficiencies in the early stages of introduction.
The development of our products is complex and costly, and we typically have several products in development at the same time.
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Potential customers may prefer to purchase from their existing suppliers or well-known brands rather than a new supplier, regardless of product performance or features.
−Removed: We expect increased competition from other established and emerging companies if our market continues to develop and expand.
+Added: We expect increased competition from other established and emerging companies as our market continues to develop and expand.
As we enter new markets, we expect to face competition from incumbent and new market participants and there is no assurance that our entry into new markets will be successful.
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If we experience greater returns from retailers or end customers, or greater warranty claims, in excess of our reserves, our business, revenue and results of operations could be harmed.
−Removed: Security vulnerabilities in our products, services and systems, or in our distribution channel, could lead to reduced revenues and
−Removed: claims against us.
+Added: Security vulnerabilities in our products, services and systems, in our distribution channel, or supply chain could lead to reduced revenues and claims against us.
The quality and performance of some of our products and services may depend upon their ability to withstand cyber-attacks.
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Hardware and software that we produce or procure from third parties also may contain defects in manufacture or design, including bugs and other problems, which could compromise their ability to withstand cyber-attacks.
−Removed: Additionally, our sales to customers through our webstores have increased, which may expose us to liabilities associated with the online collection of customer data, including credit card information, and the costs we may incur to mitigate such risks.
−Removed: Our sales to customers through our webstores require the transmission of confidential information, including credit card information, securely over public networks.
+Added: Additionally, our sales to end customers through our webstores have increased, which may expose us to liabilities associated with the online collection of customer data, including credit card information, and the costs we may incur to mitigate such risks.
+Added: Our sales to end customers through our webstores require the transmission of confidential information, including credit card information, securely over public networks.
Third parties may have the technology or knowledge to breach the security of customer transaction data.
−Removed: we have security measures related to our systems and the privacy of our customers, we cannot guarantee these measures will effectively prevent others from obtaining unauthorized access to our information and our customers’ information.
+Added: Although we have security measures related to our systems and the privacy of our end customers, we cannot guarantee these measures
+Added: will effectively prevent others from obtaining unauthorized access to our information and our customers’ information.
Any person who circumvents our security measures could destroy or steal valuable information and/or disrupt our operations.
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Data Protection Directive and China Cybersecurity Law, could adversely affect our financial condition, results of operations, and our brand.”
−Removed: We and certain of our vendors have experienced cyber-attacks in the past, and may experience cyber-attacks in the future.
−Removed: As a result, unauthorized parties have obtained, and may in the future obtain, access to our systems and data and may have obtained, and may in the future obtain, our users’ or customers’ data.
−Removed: Our security measures have in the past, and may in the future, be breached due to employee error, malfeasance, or otherwise.
+Added: We and certain of our vendors have experienced cyber-attacks in the past, and we, our vendors, suppliers, and distributors may experience cyber-attacks in the future.
+Added: As a result, unauthorized parties have obtained, and may in the future obtain, access to our systems, our confidential business information and data and may have obtained, and may in the future obtain, our users’ or customers’ data.
+Added: Our security measures have in the past, and may in the future, be breached due to human error, malfeasance, or otherwise.
Third parties may also attempt to induce employees, users, or customers or those of our vendors to disclose sensitive information in order to gain access to our data or our users’ or customers’ data.
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The fraud resulted in transfers of funds aggregating $46.7 million held by a Company subsidiary incorporated in Hong Kong to other overseas accounts held by third parties.
−Removed: To date, the Company has recovered $18.6 million.
−Removed: The Company recovered $8.1 million in fiscal 2015, resulting in a charge of $39.1 million in the fourth quarter of fiscal 2015, including additional expenses consisting of professional service fees associated with the fraud loss.
−Removed: In fiscal 2016, the Company recorded a net recovery of an additional $8.3 million, comprised of an $8.6 million recovery less $0.3 million of professional service fees associated with the recovery.
−Removed: In March 2021, the Company recorded a recovery of an additional $1.9 million.
+Added: As of March 2021, the Company has recovered $18.6 million.
No additional recoveries have been made since March 31, 2021.
−Removed: The Company is continuing to pursue the recovery of the remaining $28.1 million and is cooperating with numerous overseas law enforcement authorities who are actively pursuing a multi-agency criminal investigation.
−Removed: Ho wever, any additional recoveries are likely remote and therefore cannot be assured.
+Added: Any additional recoveries are likely remote and therefore cannot be assured.
While we do not expect the fraud to have a material impact on our business, we have borne, and will continue to bear additional expenses in connection with the remediation and investigation of the fraud.
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Maintaining and enhancing our brand is critical to expanding our base of distributors and end customers.
−Removed: Maintaining and enhancing our brand will depend largely on our ability to continue to develop and provide products and solutions that address the price performance characteristics sought by end customers and the users of our products and services, particularly in developing markets which comprise a significant part of our business.
+Added: Maintaining and enhancing our brand will depend largely on our ability to continue to develop and provide products and solutions that address the price performance characteristics sought by end customers and the users of our products and services, particularly in developing markets
+Added: which comprise a significant part of our business.
If we fail to promote, maintain and protect our brand successfully, our ability to sustain and expand our business and enter new markets will suffer.
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The ability and willingness of our contract manufacturers to perform is largely outside our control.
−Removed: Additionally, from time to time, unexpected events, such as the COVID-19 pandemic, have had, and may continue to have in the future, adverse effects on the ability of our contract manufacturers to fulfill their obligations to us due to, among other things, work stoppages or slowdowns due to facility closures or other social distancing mitigation efforts, and, more recently, the inability of our contract manufacturers to procure adequate supplies of the components to manufacture our products, particularly chipsets.
+Added: Additionally, from time to time, unexpected events, such as the COVID-19 pandemic, have had, and may have in the future, adverse effects on the ability of our contract manufacturers to fulfill their obligations to us due to, among other things, work stoppages or slowdowns due to facility closures or other social distancing mitigation efforts, and, more recently, the inability of our contract manufacturers to procure adequate supplies of the components to manufacture our products, particularly chipsets.
A shortage of adequate component supply or manufacturing capacity could increase our costs by requiring us to use alternative contract manufacturers or component suppliers, which may not be available to us on acceptable terms, if at all.
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• labor strikes or shortages;
−Removed: including shortages in labor as a result of, or to mitigate, the spread of COVID-19;
• financial problems of either contract manufacturers or component suppliers;
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The cost, quality and availability of these components are essential to the production and sale of all of our products and disruptions in our supply of these components could delay or disrupt the supply of our products and affect our business, results of operations and financial condition.
−Removed: Since 2020, we experienced reduced availability of components used to manufacture our products, especially the chipsets, which has impacted our ability and costs to manufacture our products.
+Added: In 2020 and through most of 2023, we experienced reduced availability of components used to manufacture our products, especially the chipsets, which impacted our ability and costs to manufacture our products.
These supply shortages have resulted in increased component delivery lead times and increased costs to obtain components, particularly chipsets, and resulted in delays in product production.
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We purchase components, directly or through our contract manufacturers, from third parties that are necessary for the manufacture of our products.
−Removed: Shortages in the supply of components or other supply disruptions, including, without limitation, due to increasing demand for electronics and reductions in supply as a result of COVID-19, may not be predicted in time to design-in different components or qualify other suppliers.
−Removed: Shortages or supply disruptions may also increase the prices of components due to market conditions.
+Added: Shortages in the supply of components or other supply disruptions, including, without limitation, due to increasing demand for electronics and reductions in supply as a result of unforeseen events such as COVID-19, geopolitical conditions (including China-Taiwan relations) or commercial disputes with the suppliers, may not be predicted in time to design-in different components or qualify other suppliers.
+Added: Shortages or supply disruptions may also increase the prices of components due to market conditions and reduce our gross margin and profitability if we are unable to pass these price increases through to our customers.
While many components are generally available from a variety of sources, we and our contract manufacturers currently depend on a single or limited number of suppliers for several components for our products.
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Our contract manufacturers, logistics centers and certain administrative and research and development operations, as well as our customers and suppliers, are located in areas likely to be subject to natural disasters, public health problems, military conflicts and geopolitical tensions, which could adversely affect our business, results of operations and financial condition.
−Removed: The manufacturing or shipping of our products at one or more facilities may be disrupted because our manufacturing and logistics contractors are primarily located in southern China.
+Added: The manufacturing or shipping of our products at one or more facilities may be disrupted because our manufacturing and logistics contractors are primarily located in southern China and Vietnam.
Our principal executive offices are located in New York, New York and we have operations in Ukraine, Taiwan and their surrounding countries.
−Removed: The risks of earthquakes, extreme storms and other natural disasters, military conflicts or geopolitical tensions in these geographic areas are significant.
+Added: The risks of earthquakes, extreme storms and other natural disasters (including as a result of climate change), military conflicts or geopolitical tensions in these geographic areas are significant.
+Added: In addition, global climate change may result in significant natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storm, sea-level rise and flooding.
Any disruption resulting from these events could cause significant delays in product development or shipments of our products until we are able to shift our development, manufacturing or logistics centers from the affected contractor to another vendor, or shift the affected administrative or research and development activities to another location.
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Public health problems may also result in quarantines, business closures, unavailability of key personnel, domestic and international transportation restrictions, import and export complications, and otherwise cause shortages in the supply of components or cause other disruptions within our supply chain.
−Removed: Public health problems currently cause and, along with the military conflict between Russia and Ukraine and the escalating tensions between China and Taiwan, may continue to cause disruptions, delays, shortages, and increased costs within our supply chain, and distribution channels.
+Added: Public health problems have caused and, along with the military conflict between Russia and Ukraine and the escalating tensions between China and Taiwan, may cause in the future disruptions, delays, shortages, and increased costs within our supply chain, and distribution channels.
In addition, public health problems may require us to take precautionary measures to minimize the risk to our employees, including requiring our employees to work remotely and suspending non-essential travel, which could negatively affect our business.
−Removed: Additionally, when our suppliers’ ability to manufacture or provide key components or services is impacted by supply chain disruptions, such as disruptions caused by COVID-19 related restrictions and shortages, we have incurred, and continue to incur, additional costs to expedite deliveries of components and services.
−Removed: The disruptions in our supply chain have not been fully remediated as of the date of this Quarterly Report on Form 10-Q.
+Added: Additionally, when our suppliers’ ability to manufacture or provide key components or services is impacted by supply chain disruptions, we have incurred, and may incur in the future, additional costs to expedite deliveries of components and services.
As a result of the transition to a remote working environment, we may experience disruptions or inefficiencies in our ability to operate our business.
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In addition, the outbreak of communicable diseases could result in a widespread health crisis that could adversely affect general commercial activity and the economies and financial markets of many countries which may affect the demand for our products and services and our ability to obtain financing for our business.
−Removed: The extent to which public health problems will impact our business, results of operations and financial conditions will depend on developments that are highly uncertain and cannot be predicted.
+Added: The extent to which public health problems may impact our business, results of operations and financial conditions will depend on developments that are highly uncertain and cannot be predicted.
Such developments may include the geographic spread of the public health problems, the severity of the public health problems, the duration of the outbreak and the type and duration of actions that may be taken by various governmental authorities in response to the outbreak and the impact on the U.S.
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A downturn or such other trends may decrease our revenues and increase our costs and may increase credit risk with our customers and impact our ability to collect account receivable and recognize revenue.
−Removed: The global macroeconomic environment has been challenging and inconsistent caused by instability in the global credit markets, the impact of uncertainty regarding global central bank monetary policy, the instability in the geopolitical environment in many parts of the world, including the June 2016 referendum by the United Kingdom in which voters approved an exit from the European Union, commonly referred to as “Brexit”.
−Removed: The United Kingdom ceased to be a member of the European Union on January 31, 2020.
−Removed: An agreement governing the U.K.’s departure from the European Union, Brexit, was agreed to on December 24, 2020, but a “transition period” keeping most pre-departure arrangements in place ended on December 31, 2020.
−Removed: Accordingly, although an agreement on post-
−Removed: Brexit trade and future European Union-United Kingdom relations (the European Union-United Kingdom Trade and Cooperation Agreement) was reached on December 24, 2020, and the formal ratification process was completed in April 2021, there continues to be uncertainty over some of the practical consequences of Brexit and as to its application, including as to the United Kingdom’s trading policies with the European Union and other countries as it issues new rules and regulations.
−Removed: The most significant impact of the new trade agreement is new regulations regarding trade, tax, and employees, among others, in the United Kingdom that resulted in the creation of non-tariff barriers and have increased our shipping and regulatory costs and complexities for moving our products between the United Kingdom and the European Union.
−Removed: The full effects of Brexit will depend on agreements the United Kingdom may make and rules and regulations it may issue concerning trading among the United Kingdom and the European Union.
−Removed: Given the lack of comparable precedent, it is unclear what economic, financial, trade and legal implications the withdrawal of the United Kingdom from the European Union will have generally and how such withdrawal will affect us.
−Removed: The consequences of Brexit have brought legal uncertainty and increased complexity which could continue as national laws and regulations in the United Kingdom differ from the European Union laws and regulations and additional requirements come into effect in the United Kingdom and the European Union relating to testing, authorization, labeling and other requirements that may impact our ability to import, export and otherwise distribute our products, services, and solutions.
−Removed: Brexit could continue to cause disruptions in the markets that we serve.
−Removed: Additionally, we may be adversely affected by the Brexit in ways we do not currently anticipate.
−Removed: Disruptions in the financial markets have had and may continue to have an adverse effect on the U.S.
−Removed: and world economies, which could adversely and materially impact business spending patterns.
−Removed: Tightening of credit in financial markets could adversely affect the ability of our customers and suppliers to obtain financing for significant purchases and operations and could result in a decrease in or cancellation of orders for our products.
−Removed: Inflation in the United States and the other countries that we operate is currently expected to continue at an elevated level for the near-term.
+Added: The global macroeconomic environment has been challenging and inconsistent caused by inflation, instability in the global credit markets, the impact of uncertainty regarding global central bank monetary policy, and the instability in the geopolitical environment in many parts of the world.
+Added: Inflation in the United States and the other countries that we operate has decreased from its previous elevated level, however, it is uncertain whether inflation will continue to decrease or whether it may rise again.
Rising inflation could have an adverse impact on our expenses.
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Therefore, our business results depend, in part, on our continued ability to manage these fluctuations through pricing actions, cost saving projects and sourcing decisions, while maintaining and improving margins and market share.
−Removed: Failure to manage these fluctuations could adversely impact our results of operations or cash flows.
+Added: Failure to manage these fluctuations could adversely impact our results of operations or financial conditions.
Unfavorable macroeconomic conditions, such as a recession or continued slowed economic growth, may negatively affect demand for our products and exacerbate some of the other risks that affect our business, results of operations and financial condition.
−Removed: A tighter credit market for consumer, business, and service provider spending may have several adverse effects, including reduced demand for our products, increased price competition or deferment of purchases and orders by our customers.
−Removed: Additional effects may include increased demand for customer finance, difficulties in collection of accounts receivable, higher overhead costs as a percentage of revenue and higher interest expense, risk of supply constraints, risk of excess and obsolete inventories, risk of excess facilities and manufacturing capacity and increased risk of counterparty failures.
−Removed: An economic downturn or economic uncertainty in our key U.S.
−Removed: and international markets, as well as fluctuations in currency exchange rates, may adversely affect consumer discretionary spending and demand for our consumer products.
Factors affecting the level of consumer spending include general market conditions, macroeconomic conditions, fluctuations in foreign exchange rates and interest rates, and other factors such as consumer confidence, the availability and cost of consumer credit, levels of unemployment and tax rates.
−Removed: If global economic conditions are volatile or if economic conditions deteriorate, consumers may delay or reduce purchases of our consumer products resulting in consumer demand for our products that may not reach our sales targets.
−Removed: For example, the Brexit caused significant short-term volatility in global stock markets as well as currency exchange rate fluctuations, resulting in further strengthening of the U.S.
+Added: A tighter credit market for consumer, business, and service provider spending may have several adverse effects, including reduced demand for our products, increased price competition or deferment of purchases and orders by our customers.
+Added: If global economic conditions are volatile or if economic conditions deteriorate, the consumer demand for our products may not reach our sales targets.
+Added: Additional effects of unfavorable macroeconomic conditions may include increased demand for customer finance, difficulties in collection of accounts receivable, higher overhead costs as a percentage of revenue and higher interest expense, risk of supply constraints, risk of excess and obsolete inventories, risk of excess facilities and manufacturing capacity and increased risk of counterparty failures.
Our sensitivity to economic cycles and any related fluctuation in consumer demand could adversely affect our business, financial condition and results of operations.
+Added: Additionally, the United Kingdom ceased to be a member of the European Union on January 31, 2020, commonly referred to as “Brexit”.
+Added: Although the formal ratification process was completed in April 2021, there continues to be uncertainty over some of the practical consequences of Brexit and as to its application, including as to the United Kingdom’s trading policies with the European Union and other countries as it issues new rules and regulations.
+Added: The full effects of Brexit will depend on agreements the United Kingdom may make and rules and regulations it may issue concerning trading among the United Kingdom and the European Union.
+Added: Given the lack of comparable precedent, it is unclear what economic, financial, trade and legal implications the withdrawal of the United Kingdom from the European Union will have generally and how such withdrawal will affect us.
+Added: The consequences of Brexit have brought legal uncertainty and increased complexity which could continue as national laws and regulations in the United Kingdom differ from the European Union laws and regulations and additional requirements come into effect in the United Kingdom and the European Union relating to testing, authorization, labeling and other requirements that may impact our ability to import, export and otherwise distribute our products, services, and solutions.
+Added: Brexit could cause disruptions in the markets that we serve.
+Added: Additionally, we may be adversely affected by the Brexit in ways we do not currently anticipate.
We have been investing and expect to continue to invest in growth areas and in our enterprise and service provider technologies, and if the return on these investments is lower or develops more slowly than we expect, our results of operations may be harmed.
5 unchanged sentences
We believe that we must continually develop and introduce new products, enhance our existing products, effectively stimulate customer demand for new and upgraded products, and successfully manage the transition to these new and upgraded products to maintain or increase our revenue.
−Removed: The success of new product introductions depends on a number of factors including, but not limited to, timely and successful research and development, pricing, market and consumer acceptance, the effective forecasting and
−Removed: management of product demand, purchase commitments and inventory levels, the availability of products in appropriate quantities to meet anticipated demand, the management of manufacturing and supply costs, the management of risks associated with new product production ramp-up issues, and the risk that new products may have quality issues or other defects or bugs in the early stages of introduction.
+Added: The success of new product introductions depends on a number of factors including, but not limited to, timely and successful research and development, pricing, market and consumer acceptance, the effective forecasting and management of product demand, purchase commitments, inventory levels and vendor deposit levels, the availability of products in appropriate quantities to meet anticipated demand, the management of manufacturing and supply costs, the management of risks associated with new product production ramp-up issues, and the risk that new products may have quality issues or other defects or bugs in the early stages of introduction.
Therefore, we may not correctly determine in advance the ultimate effect of new product introductions and transitions.
−Removed: Additionally, if the assumptions on which we based our forecasts and management of product demand, purchase commitments or inventory levels turn out to be incorrect, our financial performance could suffer and we could be required to write-off the value of excess products or components inventory or not fully utilize firm purchase commitments.
+Added: Additionally, if the assumptions on which we based our forecasts and management of product demand, purchase commitments, inventory levels or vendor deposit levels turn out to be incorrect, our financial performance could suffer and we could be required to write-off the value of excess products or components inventory, increase the vendor deposit levels, or not fully utilize firm purchase commitments.
In addition, the introduction or announcement of new products or product enhancements may shorten the life cycle of our existing products or reduce demand for our current products, thereby offsetting any benefits of successful product introductions and potentially lead to challenges in managing inventory of existing products.
−Removed: Failure to complete product transitions effectively or in a timely manner could harm our brand and lead to, among other things, lower revenue, excess prior generation product inventory, or a deficit of new product inventory and reduced profitability.
+Added: Failure to complete product transitions effectively or in a timely manner
+Added: could harm our brand and lead to, among other things, lower revenue, excess prior generation product inventory, or a deficit of new product inventory and reduced profitability.
In connection with introduction of new products, and our consumer products, in particular, we may spend significant amount on advertising and other marketing campaigns, such as television, print advertising, social media and others, as well as increased promotional activities, to build brand awareness and acquire new users.
While we seek to structure our advertising campaigns in the manner that we believe is most likely to encourage people to use our products and services, we may fail to identify advertising opportunities that satisfy our anticipated return on advertising spend, accurately predict customer acquisition, or fully understand or estimate the conditions and behaviors that drive customer behavior.
−Removed: If for any reason any of our advertising campaigns prove less successful than anticipated in attracting new customers, we may not be able to recover our advertising spend, and our rate of user acquisition may fail to meet our expectations, either of which could have an adverse effect on our business.
There can be no assurance that our advertising and other marketing efforts will result in increased sales of our consumer products.
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We depend upon effective sales channels to reach the consumers who are the ultimate purchasers of our consumer products.
−Removed: In the United States, we primarily sell our consumer products through a mix of retail channels, including, e-commerce, big box, mid-market and specialty retailers, and we reach certain U.S.
−Removed: markets through distributors.
−Removed: In international markets, we primarily sell through distributors who in turn sell to local retailers.
+Added: In the United States, we primarily sell our consumer products through a mix of retail channels, including our webstores, e-commerce, big box, mid-market and specialty retailers, and we reach certain U.S.
+Added: markets and international markets through distributors.
With some of our consumer products, we depend on retailers to provide adequate and attractive space for our products in their stores.
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We have limited number of distributors in certain regions, and if we were to lose the services of a distributor, we might need to find another distributor in that area and there can be no assurance of our ability to do so in a timely manner or on favorable terms.
−Removed: Additionally, as a result of the COVID-19 pandemic, certain of our distributors have been forced to temporarily suspend or otherwise reduce operations, which may adversely impact sales of our products.
−Removed: Further, our distributors build inventory in anticipation of future sales, and if such sales do not occur as rapidly as they anticipate, our distributors
−Removed: will decrease the size of their future product orders.
+Added: Further, our distributors build inventory in anticipation of future sales, and if such sales do not occur as rapidly as they anticipate, our distributors will decrease the size of their future product orders.
We are also subject to the risks of our distributors encountering financial difficulties, which could impede their effectiveness and also expose us to financial risk if they are unable to pay for the products they purchase from us.
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dollars and generally sell to retailers in local currency so significant currency fluctuations could impact their profitability, and in turn, affect their ability to buy future products from us.
−Removed: For example, the Brexit, caused significant short-term volatility in global stock markets as well as currency exchange rate fluctuations, resulting in further strengthening of the U.S.
Any reduction in sales by our current distributors, loss of key distributors or decrease in revenue from our distributors could adversely affect our revenue, results of operations and financial condition.
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Bank failures, events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, or concerns or rumors about such events, may lead to liquidity constraints.
−Removed: For example, on March 10, 2023, Silicon Valley Bank failed and was taken into receivership by the FDIC.
+Added: For example, on March 10, 2023, Silicon Valley Bank, in which we did not have deposits at the time, failed and was taken into receivership by the FDIC.
The failure of a bank, or other adverse conditions in the financial or credit markets impacting financial institutions at which we maintain balances, could adversely impact our liquidity and financial performance.
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or applicable foreign government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions, or by acquisition in the event of a failure or liquidity crisis.
+Added: Our reputation and/or business could be negatively impacted by ESG matters and/or our reporting of such matters.
+Added: There is an increasing focus from regulators, certain investors, and other stakeholders concerning environmental, social, and governance (ESG) matters, both in the United States and internationally.
+Added: ESG-related initiatives, goals, and/or commitments such as those regarding environmental matters, diversity, responsible sourcing and social investments, and other matters, could be difficult to achieve and costly to implement.
+Added: The achievement of any goals that we may announce may rely on the accuracy of our estimates and assumptions supporting those goals.
+Added: We could fail to achieve, or be perceived to fail to achieve, ESG-related initiatives, goals or commitments that we might set, and the timing, scope or nature of these initiatives, goals, or commitments, or for any revisions to them may not be acceptable to the Securities and Exchange Commission or other regulators or stakeholders, including our shareholders.
+Added: Our actual or perceived failure to adopt or achieve any ESG-related initiatives, goals, or commitments that we make could negatively impact our reputation or otherwise materially harm our business.
Risks Related to Our International Operations
Our business is susceptible to risks associated with operations outside of the United States.
−Removed: We have operations in China, the Czech Republic, Lithuania, Poland, Latvia, Ukraine, Canada, India, Taiwan and elsewhere, with our operations in Taiwan, in particular, increasingly important to our overall business.
+Added: We have operations in China, the Czech Republic, Lithuania, Poland, Latvia, Ukraine, India, Taiwan, Vietnam and elsewhere, with our operations in Taiwan, in particular, increasingly important to our overall business.
We also sell to distributors in numerous countries throughout the world.
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• import and export license requirements, tariffs, economic sanctions, contractual limitations and other trade barriers;
−Removed: • increasing labor costs, especially in China;
+Added: • increasing labor costs, especially in China and Vietnam;
• difficulties in managing the geographically remote personnel;
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We cannot be certain that the investment and additional resources required to establish, acquire or integrate operations in other countries will produce anticipated levels of revenues or profitability.
−Removed: Our third-party logistics and warehousing providers in China and elsewhere may fail to safeguard and accurately manage and report our inventory.
−Removed: We use third-party logistics and warehousing providers located in China and other countries to fulfill a portion of our worldwide sales.
+Added: Our third-party logistics and warehousing providers in China, Vietnam and elsewhere may fail to safeguard and accurately manage and report our inventory.
+Added: We use third-party logistics and warehousing providers located in China, Vietnam and other countries to fulfill a portion of our worldwide sales.
We also rely on our third-party logistics and warehousing providers to safeguard and manage and report on the status of our products at their warehouse and in transit.
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We conduct a portion of our business in mainland China and Taiwan, and our operations in mainland China and Taiwan are critical to our business.
−Removed: Accordingly, our business, financial condition and results of operations and the market price of our shares may be affected by changes in governmental policies, taxation, inflation or interest rates in mainland China and Taiwan and by social instability and diplomatic developments in or affecting mainland China and Taiwan, which are outside of our control.
+Added: For example, we currently operate significant R&D activities and a warehousing facility in Taiwan.
+Added: Accordingly, our product development, supply chain operation and overall business, financial condition and results of operations and the market price of our shares may be affected by changes in governmental policies, taxation, inflation or interest rates in mainland China and Taiwan and by social instability and diplomatic developments in or affecting mainland China and Taiwan, which are outside of our control.
Relations between mainland China and Taiwan and other factors affecting military, political or economic conditions in mainland China and Taiwan, including responses by governments worldwide to the geopolitical tension or conflict between mainland China and Taiwan, could materially and adversely affect our business, financial condition and results of operations.
+Added: In addition, both China and Taiwan are leading manufacturers of the world’s semiconductor supply.
+Added: Conflict between China and Taiwan might lead to trade sanctions, technology disputes, or supply chain disruptions, which could, in particular, affect the semiconductor industry, which might result in reduced availability of components used to manufacture our products, especially chipsets, which may impact our ability and costs to manufacture our products.
To the extent that we develop some of our own manufacturing capacity, we will be subject to various risks associated with such activities.
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• directly procuring components and materials;
−Removed: • regulatory and other compliance requirements, including import and export license requirements, tariffs, economic
−Removed: • sanctions, contractual limitations and other trade barriers;
+Added: • regulatory and other compliance requirements, including import and export license requirements, tariffs, economic sanctions, contractual limitations and other trade barriers;
• exposure to casualty loss and other disruptions;
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• our limited experience in operating manufacturing facilities.
−Removed: Since these activities are currently conducted in China and could be expanded to other foreign countries, some of these risks may be more significant due to the less predictable legal and political environment.
+Added: Since these activities are currently conducted in China and Vietnam and could be expanded to other foreign countries, some of these risks may be more significant due to the less predictable legal and political environment.
Additionally, changes in the local political, social and economic environment could adversely affect our ability and plans to develop our own manufacturing capacity.
Our business may be negatively affected by political events and foreign policy responses.
−Removed: Geopolitical uncertainties and events could cause damage or disruption to international commerce and the global economy, and thus could have a material adverse effect on us, our suppliers, logistics providers, manufacturing vendors and customers, including our channel partners.
+Added: Geopolitical uncertainties and events could cause damage or disruption to international commerce and the global economy, and thus could have a material adverse effect on us, our suppliers, logistics providers, manufacturing vendors and customers, including our distributors and other channel partners.
Changes in commodity prices may also cause political uncertainty and increase currency volatility that can affect economic activity.
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from China are currently subject to tariffs that range between 7.5% and 25%.
−Removed: These tariffs have already affected our operating results and margins.
+Added: These tariffs have affected our operating results and margins.
+Added: Additionally, the imposition of tariffs is dependent upon the classification of items under the Harmonized Tariff System (“HTS”), the value determination of the item and the country of origin of the item.
+Added: Determination of the HTS, the value and the origin of the item is a technical matter that can be subjective in nature.
+Added: Accordingly, although we believe our valuation determinations and classifications of HTS and origin are appropriate, there is no certainty that government agencies will agree with us.
+Added: If these agencies do not agree with our determinations, we could be subject to investigation and could be required to pay additional amounts, including potential penalties which could have a material adverse effect on our business, results of operations and financial condition.
The progress and continuation of trade negotiations between the U.S.
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These tariffs have, and will continue to have, an adverse effect on our results of operations and margins.
−Removed: We can provide no assurance regarding the magnitude, scope or duration of the imposed tariffs or the magnitude, scope or duration from any relief in increases to such tariffs, as well as the potential for additional tariffs or trade barriers by the U.S., China or other countries, nor that any strategies we may implement to mitigate the impact of such tariffs or other trade actions will be successful.
+Added: We can provide no assurance regarding the magnitude, scope or duration of the imposed tariffs or the magnitude, scope or
+Added: duration from any relief in increases to such tariffs, as well as the potential for additional tariffs or trade barriers by the U.S., China or other countries, nor that any strategies we may implement to mitigate the impact of such tariffs or other trade actions will be successful.
Changes in U.S.
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For example, if the U.S.
−Removed: government withdraws or materially modifies existing or proposed trade agreements, places greater restriction on free trade generally or imposes increases on
−Removed: tariffs on goods imported into the U.S., particularly from China, our business, financial condition and results of operations could be adversely affected.
+Added: government withdraws or materially modifies existing or proposed trade agreements, places greater restriction on free trade generally or imposes increases on tariffs on goods imported into the U.S., particularly from China, our business, financial condition and results of operations could be adversely affected.
In addition, negative sentiments towards the U.S.
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Confidentiality agreements with our employees, licensees, independent contractors and others may not effectively prevent disclosure of our trade secrets, and may not provide an adequate remedy in the event of unauthorized use or disclosure of our trade secrets.
−Removed: may also fail or have failed to obtain such agreements from such persons due to administrative oversights or other reasons.
+Added: We may also fail or have failed to obtain such agreements from such persons due to administrative oversights or other reasons.
Monitoring unauthorized use of our intellectual property is difficult and costly.
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Litigation, whether we are a plaintiff or a defendant, can be expensive and time-consuming, may place our intellectual property at risk of being invalidated or narrowed in scope, and may divert the efforts of our technical staff and managerial personnel.
−Removed: Enforcement of our intellectual property rights abroad, particularly in China and South America, is limited.
+Added: Enforcement of our intellectual property rights abroad, particularly in China, Russia and South America, is limited.
The intellectual property protection and enforcement regimes in certain countries outside the United States are generally not as comprehensive as in the United States, and may not adequately protect our intellectual property.
−Removed: The legal regimes relating to the recognition and enforcement of intellectual property rights in China and South America are particularly limited.
+Added: The legal regimes relating to the recognition and enforcement of intellectual property rights in China, Russia and South America are particularly limited.
Legal proceedings to enforce our intellectual property in these jurisdictions may progress slowly, during which time infringement may continue largely unimpeded.
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Our contract manufacturers may not respect our intellectual property, and may produce products that compete with ours.
−Removed: Our contract manufacturers operate primarily in China, where the prosecution of intellectual property infringement and trade secret theft is more difficult than in the United States.
+Added: Our contract manufacturers operate primarily in China and Vietnam, where the prosecution of intellectual property infringement and trade secret theft is more difficult than in the United States.
In the past, our contract manufacturers, their affiliates, their other customers or their suppliers have attempted to participate in efforts to misappropriate our intellectual property and trade secrets to manufacture our products for themselves or others without our knowledge.
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Pera or any of the other members of our management team and the inability to identify and hire a qualified replacement timely would adversely affect our business, results of operations and financial condition.
−Removed: model relies in part on leanly staffed, independent and efficient research and development teams.
+Added: Our business model relies in part on leanly staffed, independent and efficient research and development teams.
Our research and development teams are organized around small groups or individual contributors for a given platform, and there is little overlap in knowledge and responsibilities.
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We receive a substantial majority of our revenues from the sale of outdoor wireless networking equipment and enterprise WLAN.
−Removed: As we expand into other products and services, such as video surveillance equipment, voice communication equipment, security access equipment, wireless backhaul, consumer electronics, and machine-to-machine communications, we may not be able to compete effectively with existing market participants and may not be able to realize a positive return on the investment we have made in these products or services.
+Added: As we expand into other products and services, such as video surveillance equipment, voice communication equipment, security access equipment, wireless backhaul, consumer electronics, and Software-as-a-Services, we may not be able to compete effectively with existing market participants and may not be able to realize a positive return on the investment we have made in these products or services.
Entering these markets may result in increased product development costs, and our new products may have extended time to market relative to our current products.
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Such changes to our existing sales model would likely result in higher selling, general and administrative expenses as a percentage of our revenues.
−Removed: Compliance with conflict mineral disclosure requirements necessitates additional compliance cost and may create reputational challenges.
−Removed: Pursuant to Section 1502 of the Dodd-Frank Act, United States publicly-traded companies are required to disclose use or potential use of certain minerals and their derivatives, including tantalum, tin, gold and tungsten, that are mined from the Democratic Republic of Congo and adjoining countries and deemed conflict minerals.
−Removed: These requirements necessitate due diligence efforts to assess whether such minerals are used in our products in order to make the relevant required annual disclosures.
−Removed: There are, and will be, ongoing costs associated with complying with these disclosure requirements, including diligence to determine the sources of those minerals that may be used or necessary to the production of our products.
−Removed: Accordingly, our ability to determine with certainty the origin and chain of custody of these raw materials is limited.
−Removed: We may face reputational challenges that could impact future sales if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to verify with sufficient accuracy the origins of all conflict minerals used in our products.
We rely on third-party software and services to conduct our enterprise resource planning, financial planning and analysis, and financial reporting.
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The availability of this service is essential to the management of our business.
−Removed: As we expand our operations, we expect to utilize additional systems
−Removed: and service providers that may also be essential to managing our business.
+Added: As we expand our operations, we expect to utilize additional systems and service providers that may also be essential to managing our business.
Although the systems and services that we require are typically available from a number of providers, it is time consuming and costly to qualify and implement these relationships.
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Our debt levels could adversely affect our ability to raise additional capital to pay dividends, repurchase our shares of common stock and fund our operations or limit our ability to react to changes in our industry or the economy.
−Removed: As of March 31, 2023, our balance outstanding under the Third Amended and Restated Credit Agreement for our Term Facility and Revolving Facility (each as defined herein), was $450.0 million and $640.0 million, respectively.
+Added: As of September 30, 2023, our balance outstanding under the Amended Credit Agreement for our Term Facilities and Revolving Facility (each as defined herein), was $681.3 million and $365.0 million, respectively.
In the future we may need to raise additional capital to finance our payment of dividends or repurchase shares of our common stock and fund our growth and operational goals.
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Because these investments are inherently risky, no assurance can be given that such investments will be successful and will not adversely affect our reputation, business prospects, results of operation and financial condition.
−Removed: We may be adversely affected by changes in LIBOR reporting practices or the index used to replace LIBOR.
−Removed: On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021.
+Added: Uncertainty surrounding the elimination of LIBOR and the transition to SOFR may adversely affect our financial condition, operating results and cash flows.
+Added: On July 30, 2023, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, ended its US dollar LIBOR bank panel and the overnight and 12-month US dollar LIBOR settings have permanently ceased.
Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.
−Removed: financial institutions, is considering replacing U.S.
+Added: financial institutions, has chosen to replace U.S.
dollar LIBOR with a newly created index, calculated by reference to short-term repurchase agreements backed by U.S.
−Removed: Treasury securities, called the SOFR.
+Added: Treasury securities, called SOFR.
Whether SOFR will become a widely accepted benchmark in place of LIBOR, however, remains in question.
−Removed: As such, the future of LIBOR and potential alternative reference rates are uncertain at this time.
−Removed: The terms of our Amended Credit Agreement provide for the use of an alternative rate.
−Removed: Such an event would not affect our ability to borrow or maintain already outstanding borrowings, but the alternative rate could be higher and more volatile than LIBOR prior to its discontinuance and may result in interest obligations which are higher or lower or that do not otherwise correlate over time with the interest payments that would have been made on such debt if LIBOR remained in its current form.
+Added: The terms of our Amended Credit Agreement provide for the use of SOFR, and such rate could be higher and more volatile than LIBOR and may result in interest obligations which are higher or lower or that do not otherwise correlate over time with the interest payments that would have been made on such debt if LIBOR had remained.
Accordingly, the potential effects of the foregoing on our cost of capital cannot yet be determined.
−Removed: Further, the same costs and risks that may lead to the unavailability of LIBOR may make one or more of the alternative rate methods impossible or impracticable to determine.
−Removed: Any of these proposals or consequences could materially and adversely affect our financing costs, and as a result, our financial condition, operating results and cash flows.
+Added: Further, the same costs and risks that led to the unavailability of LIBOR may make one or more of the alternative rate methods impossible or impracticable to determine.
+Added: Any of these consequences could materially and adversely affect our financing costs, and as a result, our financial condition, operating results and cash flows.
+Added: Compliance with conflict mineral disclosure requirements necessitates additional compliance cost and may create reputational challenges.
+Added: Pursuant to Section 1502 of the Dodd-Frank Act, United States publicly-traded companies are required to disclose use or potential use of certain minerals and their derivatives, including tantalum, tin, gold and tungsten, that are mined from the Democratic Republic of Congo and adjoining countries and deemed conflict minerals.
+Added: These requirements necessitate due diligence efforts to assess whether such minerals are used in our products in order to make the relevant required annual disclosures.
+Added: There are, and will be, ongoing costs associated with complying with these disclosure requirements, including diligence to determine the sources of those minerals that may be used or necessary to the production of our products.
+Added: Accordingly, our ability to determine with certainty the origin and chain of custody of these raw materials is limited.
+Added: We may face reputational challenges that could impact future sales if we determine that certain of our products contain minerals not determined to be conflict free or if we are unable to verify with sufficient accuracy the origins of all conflict minerals used in our products.
Risks Related to Our Common Stock
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In the event of his death, the shares of our stock that Mr.
−Removed: Pera owns will be transferred to his successors.
+Added: Pera owns will be transferred to his successors, who may desire or be required to sell a significant portion of such shares.
As a board member and officer, Mr.
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Pera is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.
−Removed: As of May 5, 2023, Mr.
+Added: As of November 3, 2023, Mr.
Pera beneficially owned 56,278,181 shares of our common stock.
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Pera’s shares could adversely affect the market price for our common stock.
−Removed: Pera had informed us he has entered into arrangements under which he has pledged up to 25% of the shares of our common stock that he beneficially owns to secure loans with financial institutions.
−Removed: Pera had also indicated these loans have or will have various requirements to repay all or a portion of the loan upon the occurrence of various events, including when the price of the common stock goes below certain specified levels.
−Removed: Pera may need to sell shares of our common stock to meet these repayment requirements.
−Removed: Upon a default under one or more of these loans, the lender could sell the pledged shares into the market without limitation on volume or manner of sale.
−Removed: Sales of shares by Mr.
−Removed: Pera to reduce his loan balance or the lenders upon foreclosure are likely to adversely affect our stock price.
−Removed: Pera has also indicated to us that he may in the future from time to time pledge additional shares of common stock as collateral for margin or other loans, enter into derivative transactions based on the value of our common stock, dispose of shares of common stock, otherwise monetize shares of his common stock and/or engage in other transactions relating to shares of our common stock and/or other securities of the company.
+Added: Pera has indicated to us that he may in the future from time to time pledge shares of common stock as collateral for margin or other loans, enter into derivative transactions based on the value of our common stock, dispose of shares of common stock, otherwise monetize shares of his common stock and/or engage in other transactions relating to shares of our common stock and/or other securities of the company.
+Added: In the event Mr.
+Added: Pera pledges shares
+Added: of common stock as collateral for margin or other loans, Mr.
+Added: Pera may need to sell shares of our common stock to meet applicable repayment requirements.
+Added: Upon a default under such loans, the lender could sell the pledged shares into the market without limitation on volume or manner of sale.
Any of these activities by Mr.
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Changes in our products or changes in export and import regulations may create delays in the introduction of our products in other countries, prevent our customers with international operations from deploying our products or, in some cases, prevent the transfer of our products to certain countries altogether.
−Removed: Any change in export or import regulations or related legislation, shift in approach to the enforcement or scope of existing regulations, or change in the countries, persons or technologies targeted by such regulations, could
−Removed: negatively impact our ability to sell our products to existing customers or the ability of our current and potential distributors, network operators and service providers outside the United States.
+Added: Any change in export or import regulations or related legislation, shift in approach to the enforcement or scope of existing regulations, or change in the countries, persons or technologies targeted by such regulations, could negatively impact our ability to sell our products to existing customers or the ability of our current and potential distributors, network operators and service providers outside the United States.
Even though we take precautions to prevent our products from being provided to targets of U.S.
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Our failure or inability to obtain required import or export approval for our products could harm our international and domestic sales and adversely affect our revenue.
−Removed: Existing and new regulations, changes in existing regulations, or the enforcement of any regulations related to our products may result in unanticipated burdens, costs and liabilities and could materially and adversely affect our financial condition, results of operations, and our brand.
+Added: Existing and new regulations, changes in existing regulations, or the enforcement of any regulations related to our products may result in unanticipated burdens, reduced demand, costs and liabilities and could materially and adversely affect our financial condition, results of operations, and our brand.
Our products are subject to governmental regulations in a variety of jurisdictions.
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End customer uncertainty regarding future policies may also affect demand for communications products, including our products.
+Added: For example, changes in government regulations providing funding for capital investment in new industries, products or services, such as any government funding of products supporting wireline connectivity rather than wireless connectivity, could adversely impact products that are purchased by our end customers and adversely impact our business, results of operations and financial condition.
+Added: Further, government requirements around the world requiring or providing preference to, domestically produced goods may limit our ability to sell our products to customers in such jurisdictions, impacting our ability to grow our sales in such jurisdictions, adversely impacting our revenues, operations and financial condition.
If existing laws or regulations regarding the use of our products or services are enforced in a manner not previously contemplated by us, our channel partners or our end customers, it could expose us or them to liability and could have a material adverse effect on our financial condition, results of operations, and our brand.
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Such laws and regulations often have changes in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.
+Added: The costs of compliance with, and other burdens imposed by, these regulations may limit the use and adoption of our products and services and could have an adverse impact on our business, results of operations and financial condition.
For example, in April 2016, the E.U.
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More recently, the Personal Information Security Specification went into effect in October 2020, which has broad but uncertain applications and imposes a number of new privacy and data security obligations.
−Removed: China is also implementing new legislation on the protection of privacy and
−Removed: personal data, including a Personal Information Protection Law and a Data Security Law, each of which went into effect in September 2021 and may impose new obligations on us.
+Added: China is also implementing new legislation on the protection of privacy and personal data, including a Personal Information Protection Law and a Data Security Law, each of which went into effect in September 2021 and may impose new obligations on us.
Additionally, California enacted the California Consumer Privacy Act (the “CCPA”) that, among other things, requires covered companies to provide new disclosures to California consumers, and afford such consumers new abilities to opt-out of certain sales of personal information.
The CCPA took effect on January 1, 2020 with the privacy provisions enforceable by the California Attorney General as of July 1, 2020, and the regulations becoming enforceable as of August 1, 2020.
−Removed: Given the recent implementation of the regulations, we cannot yet predict the impact of the CCPA on our business or operations.
−Removed: The costs of compliance with, and other burdens imposed by, the GDPR, CSL and CCPA may limit the use and adoption of our products and services and could have an adverse impact on our business, results of operations and financial condition.
−Removed: Further, it is anticipated that the California Privacy Rights Act, or CPRA, effective January 1, 2023, will significantly expand the CCPA, creating obligations relating to consumer data beginning on January 1, 2023, with implementing regulations expected in the third or fourth quarter of 2022, and enforcement beginning July 1, 2023.
−Removed: It will also create a new California Privacy Protection Agency authorized to issue substantive regulations and enforce the CPRA, which could result in increased privacy and information security enforcement.
−Removed: Other states have enacted data privacy laws as well.
−Removed: For example, Virginia passed the Consumer Data Protection Act, Colorado passed the Colorado Privacy Act, Utah passed the Utah Consumer Privacy Act and Connecticut passed the Act Concerning Personal Data Privacy and Online Monitoring, each of which become effective in 2023.
+Added: The CCPA was significantly expanded on January 1, 2023, when the California Privacy Rights Act (“CPRA”) became effective.
+Added: The CPRA amendments, among other things, give California residents the ability to limit use of certain sensitive personal information, further restrict the use of cross-contextual advertising, establish restrictions on the retention of personal information, expand the types of data breaches subject to the CCPA’s private right of action, provide for increased penalties for CCPA violations concerning California residents under the age of 16, and establish a new California Privacy Protection Agency to implement and enforce the new law.
In addition, data privacy and security laws have been proposed at the federal, state, and local levels in recent years, which could further complicate compliance efforts.
+Added: For example, states such as Virginia, Colorado, Utah, Connecticut, Iowa, Indiana, Tennessee, Montana and Texas have enacted their own data privacy laws.
+Added: Given the recent implementation of these regulations, we cannot yet predict the impact of these regulations on our business or operations.
We strive to comply with all applicable laws, policies and legal obligations relating to privacy, data security, cybersecurity and data protection.
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To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.
−Removed: Additionally, as the COVID-19 pandemic continues to develop, many of our estimates could require increased judgment and carry a higher degree of variability and volatility.
As events continue to evolve our estimates may change materially in future periods.
−Removed: In addition, projections of any evaluation of effectiveness of internal control over financial reporting in future periods are subject to the risk that the control may become inadequate because of changes in conditions or a deterioration in the degree of compliance with the policies or procedures.
+Added: In addition, projections of any evaluation of effectiveness of internal
+Added: control over financial reporting in future periods are subject to the risk that the control may become inadequate because of changes in conditions or a deterioration in the degree of compliance with the policies or procedures.
We have in the past and may in the future fail to maintain adequate internal controls.
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We regularly assess the likelihood of favorable or unfavorable outcomes resulting from these audits or other reviews to determine the adequacy of our provision for income taxes.
−Removed: Although we believe our tax estimates are reasonable, there can be no assurance that any final determination will not be materially different from the treatment reflected in our historical income tax provisions and accruals, which could materially and adversely affect our business, results of operations and financial condition.
+Added: Although we believe our interpretation of tax laws and tax estimates are reasonable, there can be no assurance that any final determination by taxing authorities will not be materially different from the treatment reflected in our historical income tax provisions and accruals, which could materially and adversely affect our business, results of operations and financial condition.
In the ordinary course of our business, there are many instances where the determination of tax implications is uncertain.
−Removed: Our calculations of income taxes may be based on our interpretations of applicable tax laws in the jurisdictions in which we file.
−Removed: The final determination of our income tax liabilities may be materially different than what is reflected in our income tax provisions and accruals.
+Added: We record a liability for unrecognized tax benefits associated with uncertain tax positions which often involves significant management judgment as to the interpretations of applicable tax laws in the jurisdictions in which we file.
+Added: The final determination of our income tax liabilities by taxing authorities may be materially different than what is reflected in our income tax provisions and accruals which could materially affect our tax obligations and effective tax rate.
The legislative bodies in many jurisdictions regularly consider proposed legislation that, if adopted, could affect our tax rate in such jurisdictions, and the carrying value of our deferred tax assets or our tax liabilities.
12 unchanged sentences
• changes to tax laws regarding R&D tax credits;
−Removed: • changes in stock-based compensation;
+Added: • changes in share-based compensation;
• changes in tax law and/or generally accepted accounting principles.
3 unchanged sentences
Further, in 2022, the U.S.
−Removed: government enacted the Inflation Reduction Act, which made a number of changes, including adding a 1% excise tax on stock buybacks by publicly-traded corporations and a 15% corporate
−Removed: minimum tax for companies with higher than $1 billion of certain adjusted financial statement income.
−Removed: As a result of the 1% excise tax, the cost to us of making repurchases will increase and the number of shares repurchased pursuant to our stock repurchase programs will be reduced.
+Added: government enacted the Inflation Reduction Act, which made a number of changes, including adding a 1% excise tax on stock buybacks by publicly-traded corporations and a 15% corporate minimum tax for companies with higher than $1 billion of certain adjusted financial statement income.
+Added: As a result of the 1% excise tax, the cost to us of making repurchases will increase.
Changes in tax laws and regulations and interpretations of such laws and regulations, including taxation of earnings outside of the U.S., may materially and adversely affect our business, results of operations and financial condition.
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.