What changed in this filing

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Item 1A. Risk Factors

2025-05-09 compared with 2025-02-07 · 83 added, 66 removed, 755 unchanged (16% of the section changed)

17 unchanged sentences

• a global economic downturn;

• changes or uncertainty in tariffs and global trade policies;

• 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;

50 unchanged sentences

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.

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.

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.

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.

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New entrants seeking to gain market share by introducing new technology and new products may also make it more difficult for us to sell our products, and could create increased pricing pressure.

In addition, broadband equipment providers or system integrators may also offer wireless broadband infrastructure equipment for free or as part of a bundled offering, which could force us to reduce our prices or change our selling model to remain competitive.

In addition, broadband equipment providers or system integrators may

also offer wireless broadband infrastructure equipment for free or as part of a bundled offering, which could force us to reduce our prices or change our selling model to remain competitive.

If there is a shift in the market such that network operators and service providers begin to use closed network solutions that only operate with other equipment from the same vendor, we could experience a significant decline in sales because our products would not be interoperable.

28 unchanged sentences

In addition, customers not deploying security updates in a timely manner or deciding not to upgrade products, services or solutions could result in claims of liability against us, damage our reputation or otherwise materially harm our business.

Furthermore, the emergence and maturation of AI capabilities designed to circumvent controls, avoid detection and remove or obfuscate forensic evidence, and the utilization of these techniques by attackers, has led to new and more effective methods of cyber-attacks.

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.

Our sales to end customers through our webstores require the transmission of confidential information, including credit card information, securely over public networks.

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.

Although we and our service providers have security measures related to our systems and the privacy of our end customers, we cannot guarantee these measures 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

Any person who circumvents our security measures could destroy or steal valuable information and/or disrupt our operations.

Any security breach could also expose us and our service providers to risks of data loss, litigation and liability, and could seriously disrupt operations and harm our reputation, any of which could adversely affect our financial condition and results of operations.

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Maintaining and enhancing our brand is critical to expanding our base of distributors and end customers.

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.

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.

28 unchanged sentences

Environmental regulations or changes in the supply, demand or available sources of natural resources may affect the availability and cost of goods and services necessary to run our business.

Non-compliance or deliberate violations of labor, environmental or other laws by our contract manufacturer or suppliers, or a failure of these parties to follow ethical business practices, could lead to negative publicity and harm our reputation or brand.

Non-compliance or deliberate violations of labor, environmental or other laws by our

contract manufacturer or suppliers, or a failure of these parties to follow ethical business practices, could lead to negative publicity and harm our reputation or brand.

We believe that our orders may not represent a material portion of our contract manufacturers’ total orders and, as a result, fulfilling our orders may not be a priority in the event our contract manufacturers are constrained in their capacity.

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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.

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.

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 global trade policies, and the instability in the geopolitical environment in many parts of the world.

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.

3 unchanged sentences

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.

These risks may be exacerbated by changes in global tariff policies and escalating global trade tensions, which pose uncertainties for supply chains, material costs and consumer demand.

Unfavorable macroeconomic conditions, such as a recession, increasing tariffs, uncertainty over global trade policies, 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.

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.

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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.

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.

ESG-related initiatives, goals, and/or commitments such as those regarding environmental matters, responsible sourcing and social investments, and other matters, could be difficult to achieve and costly to implement.

The achievement of any goals that we may announce may rely on the accuracy of our estimates and assumptions supporting those goals.

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All of our products are subject to changing preferences that cannot be predicted with certainty and lead times for our products may make it more difficult for us to respond rapidly to new or changing product or consumer preferences.

If we are unable to introduce appealing new consumer products or novel technologies in a timely manner, or our new

products or technologies are not accepted or adopted by customers, our competitors may increase their market share, which could hurt our competitive position.

If we are unable to introduce appealing new consumer products or novel technologies in a timely manner, or our new products or technologies are not accepted or adopted by customers, our competitors may increase their market share, which could hurt our competitive position.

It is also possible that competitors could introduce new products and services that negatively impact customer preference in the type of products that we supply, which could result in decreased sales of our product and a loss in market share.

11 unchanged sentences

• impact of inflation on local economies;

• import and export license requirements, tariffs, economic sanctions, contractual limitations and other trade barriers;

• import and export license requirements, economic sanctions, contractual limitations and other trade barriers;

• tariffs, the threat of new or increased tariffs, and escalating trade tensions;

• changes in local tax and customs duty laws or changes in the enforcement, application or interpretation of such laws (including potential responses to the higher U.S.

tariffs on certain imported products implemented by the U.S.);

• increasing labor costs, especially in Vietnam and China;

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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.

Our business may be negatively affected by geopolitical events and foreign policy responses.

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.

For example, escalating tensions between the U.S., China and other countries may result in changes in laws or regulations that will affect our ability and/or increase our costs to manufacture and sell our products.

In recent years, the U.S.

government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries.

The current U.S.

administration has imposed significant increases to tariffs on goods imported into the U.S., including from China and Vietnam, and has raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture additional countries and types of goods.

Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S.

Following the recent executive orders by the President of the United States, products we import from China into the U.S.

will be subjected to a range of tariffs from 27.5% to 170%.

In addition, certain products we import into the U.S.

from Vietnam and other countries are currently subject to 10% tariffs.

The current rates include temporary reductions and temporary product exclusions, and, for example, if the reduced rates and product exceptions in place for Vietnam were removed, the tariff rates for products we import into the U.S.

from Vietnam would increase to 46%.

These tariffs and related policy changes have significantly affected our business, financial condition and results of operations, and we may not be able to plan for alternative sources for our supply chain and manufacturing operations or effectively mitigate the adverse impacts from such measures .

Additional trade restrictions could be adopted with little to no advance notice, which could further increase the cost of our products, disrupt our supply chain, reduce the demand for our products, and impair our ability to effectively operate and compete in the countries where we do business.

We are closely monitoring this evolving situation but there can be no assurance that we will be able to mitigate the impacts of any trade measures, which could be material to our operating results or harm our competitive position.

Moreover, 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.

Determination of the HTS, the value and the origin of the item is a technical matter that can be subjective in nature.

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.

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.

We also face uncertainty in the interpretation of new tariffs and their applicability, including with respect to customs valuation, product classification and country-of-origin determinations.

Although we seek to comply with applicable customs laws and regulations, the application of rules regarding new tariffs can be subject to varying interpretations or future re-interpretations.

Customs and Border Protection is currently challenging, and may continue to challenge, the valuation, rules of origin and classification methods that we apply to certain products imported into the U.S.

Any such disagreement could result in the retroactive assessment of additional duties with interest, the imposition of penalties, or other enforcement actions without the ability to mitigate such penalties, thereby adversely affecting our operations and financial results.

The progress and continuation of trade negotiations between the U.S., China, Vietnam and other countries continues to be uncertain.

A further escalation of the trade tensions remains a possibility, which could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets, which could in turn have a material adverse impact on our business, financial condition and the results of operations.

We can provide no assurance regarding the magnitude, scope or duration of the imposed tariffs and trade restrictions or the magnitude, scope or duration from any relief in increases to such tariffs, as well as the potential for additional tariffs, quotas, duties, taxes or trade barriers by the U.S., China, Vietnam 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.

social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently develop and sell products, and any negative sentiments towards the U.S.

as a result of such changes, could also adversely affect our business.

For example, negative sentiments towards the U.S.

among non-U.S.

customers and among non-U.S.

employees or prospective employees could adversely affect sales or hiring and retention, respectively.

The foreign policies of governments may be volatile and may result in rapid changes to import and export requirements, customs classifications, tariffs, trade sanctions and embargoes or other retaliatory trade measures that may cause us to raise prices, prevent us from offering products or providing services to particular entities or markets, may cause us to make changes to our operations, or create delays and inefficiencies in our supply chain.

For example, political unrest, conflicts and uncertainties in the Middle East, Eastern Europe and Asia Pacific, including the military conflict between Russia and Ukraine and the escalating tensions between China and Taiwan, may lead to disruptions in commerce in those regions, which would in turn impact our sales to those regions.

Furthermore, if the U.S.

government imposes new sanctions against certain countries or entities, such sanctions could sufficiently restrict our ability to market and sell our products and may materially adversely affect our results of operations.

In addition, reports of certain intelligence gathering methods of the U.S.

government could affect customers’ perception of the products of companies based in the United States.

Trust and confidence in us as an equipment supplier is critical to the development and growth of our markets.

Impairment of that trust, or foreign regulatory actions taken in response to reports of certain intelligence gathering methods of the U.S.

government, could affect the demand for our products from customers outside of the United States and could have an adverse effect on our results of operations.

Our third-party logistics and warehousing providers in Vietnam and China and elsewhere may fail to safeguard and accurately manage and report our inventory.

6 unchanged sentences

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.

In addition, both China and Taiwan are leading manufacturers of the world’s semiconductor supply.

12 unchanged sentences

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.

Changes in commodity prices may also cause political uncertainty and increase currency volatility that can affect economic activity.

For example, escalating tensions between the U.S., China and other countries may result in changes in laws or regulations that will affect our ability to manufacture and sell our products.

Following the February 1, 2025 executive order by the President of the United States, products we import into the U.S.

from China will be subject to an incremental 10% tariff, which results in products that we import into the U.S.

from China being subject to incremental tariffs that range between 10% and 35%.

These tariffs have affected our operating results and margins.

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.

Determination of the HTS, the value and the origin of the item is a technical matter that can be subjective in nature.

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.

The progress and continuation of trade negotiations between the U.S.

and China continues to be uncertain and a further escalation of the trade war remains a possibility.

These tariffs have, and will continue to have, an adverse effect on our results of operations and margins.

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.

Changes in U.S.

as a result of such changes, could also adversely affect our business.

For example, if the U.S.

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 and Vietnam, our business, financial condition and results of operations could be adversely affected.

In addition, negative sentiments towards the U.S.

among non-U.S.

customers and among non-U.S.

employees or prospective employees could adversely affect sales or hiring and retention, respectively.

For example, political unrest and uncertainties in the Middle East, Eastern Europe and Asia Pacific, including the military conflict between Russia and Ukraine and the escalating tensions between China and Taiwan,

may lead to disruptions in commerce in those regions, which would in turn impact our sales to those regions.

Furthermore, if the U.S.

In addition, reports of certain intelligence gathering methods of the U.S.

government could affect customers’ perception of the products of companies based in the United States.

Trust and confidence in us as an equipment supplier is critical to the development and growth of our markets.

Impairment of that trust, or foreign regulatory actions taken in response to reports of certain intelligence gathering methods of the U.S.

government, could affect the demand for our products from customers outside of the United States and could have an adverse effect on our results of operations.

Our ability to introduce new products and support our existing products depends on our ability to manage geographically dispersed research and development teams.

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Particularly if the quality of counterfeit products is poor, damage could be done to our brand.

Counterfeit sales, to the extent they replace otherwise legitimate sales, could also adversely affect our operating results.

Counterfeit sales, to the extent they replace otherwise legitimate sales, could also

adversely affect our operating results.

Combating counterfeiting is difficult and expensive, and may not be successful, especially in countries that have a relatively weak legal regime for the protection of intellectual property.

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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.

As of December 31, 2024, our balance outstanding under the Amended Credit Agreement for our Term Facilities (as defined herein), was $406.3 million.

There was no outstanding balance on the Revolving Facility (as defined herein) as of December 31, 2024.

As of March 31, 2025, our balance outstanding under the Amended Credit Agreement for our Term Facilities (as defined herein), was $340.0 million.

There was no outstanding balance on the Revolving Facility (as defined herein) as of March 31, 2025.

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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Pera is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.

As of February 7, 2025, Mr.

As of May 9, 2025, Mr.

Pera beneficially owned 56,278,181 shares of our common stock.

14 unchanged sentences

These and other factors may also affect our ability to repurchase shares of our common stock.

Failure to pay cash dividends could cause the market price of our

common stock to decline.

Failure to pay cash dividends could cause the market price of our common stock to decline.

Failure to repurchase shares of our common stock could also result in a lower market price of our common stock.

51 unchanged sentences

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.

financial condition, results of operations, and our brand.

Moreover, channel partners or end customers may require us, or we may otherwise deem it necessary or advisable, to alter our products to address actual or anticipated changes in the regulatory environment.

20 unchanged sentences

The CSL is the first Chinese law that systematically lays out the regulatory requirements on cybersecurity and data protection, subjecting many previously under-regulated or unregulated activities in cyberspace to government scrutiny.

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.

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.

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.

8 unchanged sentences

However, given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be conflicting, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices.

Any failure or perceived failure by us or third-party service-providers to comply with our privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other user data, may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on our brand, results of operations and financial condition.

unauthorized release or transfer of personally identifiable information or other user data, may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on our brand, results of operations and financial condition.

Governments are continuing to focus on privacy, cybersecurity, data protection and data security and it is possible that new privacy or data security laws will be passed or existing laws will be amended in a way that is material to our business.

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Our customers and the users of our products may expect us to indemnify them against claims for intellectual property infringement, defective products and other losses.

Our customers, users and other parties may expect us to indemnify them for losses incurred in connection with our products, including as a result of intellectual property infringement, defective products, and security vulnerabilities, even if our agreements with them do not require us to provide this indemnification.

not require us to provide this indemnification.

In some instances, we may decide to defend and indemnify them, irrespective of whether we believe that we have an obligation to do so.

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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.

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.

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.

2 unchanged sentences

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.

Multi-jurisdictional changes enacted in response to the guidelines provided by the Organization for Economic Cooperation and Development (“OECD”) to address base erosion and profit shifting (“BEPS”), and additional amendments or guidance regarding comprehensive U.S.

Multi-jurisdictional changes enacted in response to the guidelines provided by the Organization for Economic Cooperation and Development (“OECD”) to address base erosion and profit shifting (“BEPS”), including a Pillar Two framework that imposes a minimum tax rate of 15% for multinational enterprises, and additional amendments or guidance regarding comprehensive U.S.

tax reform, among other things, may change certain U.S.

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Further, in 2022, the U.S.

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.

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.

As a result of the 1% excise tax, the cost to us of making repurchases will increase.

5 unchanged sentences

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

What changed 10-Q

Item 1A. Risk Factors