−Removed: This Annual Report on Form 10-K contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
−Removed: These risks and uncertainties include, but are not limited to, the risk factors set forth below.
−Removed: These risks and uncertainties are not the only ones we face.
+Added: Our business, operations and financial results are subject to various risks and uncertainties that could materially adversely affect our business, financial condition, results of operations and the trading price of our common stock.
+Added: This Annual Report on Form 10-K also contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
+Added: These risks and uncertainties include the risk factors set forth below.
+Added: We operate in a competitive and rapidly changing environment and new risks emerge from time to time.
If any event related to these known or unknown risks or uncertainties actually occurs, our business prospects, operating results, and financial condition could be materially adversely affected.
Risk Factors Summary
+Added: Risks Related to Our Business and Industry
• our limited ability to forecast our results of operations and sales;
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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 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: • our reliance on a limited number of suppliers, our inability to predict shortages in components, price increases or other supply disruptions and our failure to identify or qualify alternative suppliers;
• 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;
−Removed: • a global economic downturn;
−Removed: • changes or uncertainty in tariffs and global trade policies;
−Removed: • 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: • a global economic downturn and adverse macroeconomic trends;
• the ineffective management of product introductions, product transitions and marketing or our inability to remain competitive and stimulate customer demand for our products;
+Added: • our growth depends in part on the success of our strategic relationships with third parties and our ability to integrate with third-party applications and services;
• our inability to anticipate customer preferences and develop desirable products and solutions, or to execute our strategy for our products or develop our sales channels;
+Added: • our use of artificial intelligence (“AI”) technologies which may present business, compliance, and reputational risks;
• general credit, liquidity, market, and interest rate risks to our investment securities;
• exposure to adverse developments affecting financial institutions at which we maintain deposits;
+Added: Risks Related to Our International Operations
• exposure to increased economic and operational uncertainties from our international operations, including, without limitation, as a result of foreign policy and geopolitical developments, particularly those involving China and Russia, varying legal and regulatory regimes and the effects of foreign currency exchange rates;
+Added: • changes or uncertainty in tariffs and global trade policies;
• the failure of our foreign warehouse and logistics providers to safeguard, manage and properly report our inventory;
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• our inability to manage geographically dispersed research and development teams;
+Added: Risks Related to Intellectual Property
• our limited ability to obtain and enforce our intellectual property rights, particularly in China, Russia and South America;
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• the risks of using open source software in our products;
−Removed: • our use of artificial intelligence (“AI”) technologies which may present business, compliance, and reputational risks;
+Added: Risks Related to Our Management and Structure
• our reliance on our founder and chief executive officer, who owns a majority of our common stock;
−Removed: • our debt levels and the impact our debt levels may have on our ability to raise capital or otherwise finance our business;
• the risks of expanding our product offerings or our operations or increases in our operating expenses;
• our reliance on third-party software and services for certain aspects of our operations, including, without limitation, our financial reporting functions;
+Added: • our debt levels and the impact our debt levels may have on our ability to raise capital or otherwise finance our business;
+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: Risks Related to Our Common Stock
• volatility in the price of our common stock due to volatility in our results of operations or our failure to pay cash dividends or to repurchase shares of our common stock;
−Removed: • the reliance of our products on unlicensed radio frequency spectrum, and the increasing reliance of consumer and other products on the same spectrum or from the introduction of regulation of such spectrum;
+Added: Risks Related to Regulatory, Legal and Tax Matters
• potential liability under trade protection, anti-corruption, and other laws resulting from our global operations;
−Removed: • changes in laws and regulations relating to the handling of personal data;
+Added: • changes in laws and regulations relating to privacy, data security, data access, cybersecurity and data protection;
+Added: • the reliance of our products on unlicensed radio frequency spectrum, and of other products on the same spectrum or from the introduction of regulation of such spectrum;
• the adverse impact from litigation matters;
−Removed: • the adverse impact to our results of operations from successful warranty claims, product losses or recalls;
−Removed: • indemnification claims against us for intellectual property infringement, defective products, and security vulnerabilities;
+Added: • the adverse impact to our results of operations from successful warranty and product liability claims, product losses or recalls;
+Added: • indemnification claims against us for intellectual property infringement, defective products, systems failures and security vulnerabilities;
• our inability to maintain an effective system of internal controls;
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Because of our limited visibility into end customer demand and channel inventory levels, our ability to accurately forecast our future sales is limited.
−Removed: We sell our products and solutions globally to network operators, service providers and consumers, primarily through our network of distributors and resellers.
+Added: We sell our products and solutions globally to network operators, service providers and customers, primarily through our network of distributors and resellers.
We do not employ a traditional direct sales force.
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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 serve (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: 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 serve (which may be more prevalent during a global economic downturn, or periods of economic, political or
+Added: regulatory uncertainty), could have a material adverse effect on our business, results of operations, liquidity and financial condition.
Such slowdowns may continue or recur in future periods.
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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.
−Removed: 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.
+Added: The markets for enterprise networking equipment and other products possess similar characteristics of rapid technological updates, evolving industry standards, frequent changes in customer preferences, frequent new product introductions and short and unpredictable product life cycles.
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.
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Given the complexity, we occasionally have experienced, and could experience in the future, lower than expected yields on new or enhanced products and delays in completing the development and introduction of new products and enhancements to existing products, including the maintenance of compatibility between older and newer versions of our products.
−Removed: In addition, new products may have lower selling prices or higher costs than existing products and may be more prone to technical problems, which could negatively impact our results of operations.
+Added: In addition, new products may have lower selling prices or higher costs than existing products and may be more prone to technical problems and expose us to additional liabilities, which could negatively impact our results of operations.
Our ability to compete successfully will depend in large measure on our ability to maintain a technically skilled development and engineering staff, to successfully innovate, and to adapt to technological changes and advances in the industry.
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The markets in which we compete are highly competitive.
−Removed: The networking, enterprise WLAN, routing, switching, video surveillance, door access, VoIP, wireless backhaul, machine-to-machine communications and consumer markets in which we primarily compete are highly competitive and are influenced by competitive factors including:
+Added: The networking, enterprise WLAN, routing, switching, video surveillance, door access, VoIP, wireless backhaul, machine-to-machine communications and alarm monitoring markets in which we primarily compete are highly competitive and are influenced by competitive factors including:
• our ability to rapidly develop and introduce new high-performance integrated solutions;
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We expect increased competition from other established and emerging companies as our market continues to develop and expand.
−Removed: 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.
+Added: and there is no assurance that our entry into new markets will be successful.
Many of these companies have significantly greater financial, technical, marketing, distribution and other resources than we do and are better positioned to acquire and offer complementary products and technologies.
Industry consolidation, acquisitions and other arrangements among competitors may adversely affect our competitiveness because it may be more difficult to compete with entities that have access to their combined resources.
−Removed: As a result of such consolidation, acquisition or other arrangements, our current and potential competitors might be able to adapt more quickly to new technologies and consumer preference, devote greater resources to the marketing and promotion of their products, initiate or withstand price competition, and take advantage of acquisitions or other opportunities more readily and develop and expand their products more quickly than we do.
+Added: As a result of such consolidation, acquisition or other arrangements, our current and potential competitors might be able to adapt more quickly to new technologies and customer preference, devote greater resources to the marketing and promotion of their products, initiate or withstand price competition, and take advantage of acquisitions or other opportunities more readily and develop and expand their products more quickly than we do.
These combinations may also affect customers’ perceptions regarding the viability of companies of our size and, consequently, affect their willingness to purchase our products.
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If any of these problems are not found until after we have commenced commercial production and distribution of a new product, we may be required to incur additional development costs, repair or replacement costs, and other costs relating to regulatory proceedings, product recalls and litigation, which could harm our reputation and results of operations.
−Removed: Undetected defects or bugs may lead to negative online Internet reviews of our products, which are increasingly becoming a significant factor in the success of our new product launches.
+Added: Undetected defects or bugs may lead to negative online reviews of our products, which are increasingly becoming a significant factor in the success of our new product launches.
If we are unable to quickly respond to negative reviews, including end user reviews posted on various prominent online retailers, our ability to sell these products will be harmed.
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Because we use our products in our own operations, any security vulnerabilities in our products could be disruptive to our business and harm our reputation.
−Removed: Some of our products and services also involve the storage and transmission of users’ and customers’ proprietary information which may be the target of cyber-attacks.
−Removed: Hardware and software that we produce or procure from third parties also may contain manufacturing or design defects, including bugs and other problems, which could compromise their ability to withstand cyber-attacks.
−Removed: 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.
+Added: Some of our products and services also involve the storage and transmission of end users’ personally identifiable and proprietary information which may be the target of cyber-attacks.
+Added: Hardware and software that
+Added: we produce or procure from third parties also may contain manufacturing or design defects, including bugs and other problems, which could compromise their ability to withstand cyber-attacks.
+Added: In addition, end users 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.
Even when we prioritize a security vulnerability, it could take time for us to develop a remedy and the remedy may ultimately be insufficient to fully fix the issue.
−Removed: Security vulnerabilities can persist even after we have issued security updates if we have not identified and addressed the root cause of a particular vulnerability, if customers have not installed the most recent updates, if the attackers exploited the vulnerabilities before a security update is applied to install additional malware to further compromise customers’ systems, or if a previously patched vulnerability is inadvertently reintroduced during future development.
+Added: Security vulnerabilities can persist even after we have issued security updates if we have not identified and addressed the root cause of a particular vulnerability, if end users have not installed the most recent updates, if the attackers exploited the vulnerabilities before a security update is applied to install additional malware to further compromise end users’ systems, or if a previously patched vulnerability is inadvertently reintroduced during future development.
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.
−Removed: 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.
−Removed: Our sales to end customers through our webstores require the transmission of confidential information, including credit card information, securely over public networks.
+Added: Additionally, our sales to end users 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: In addition, certain of our security products require us to collect video, images, sensor and location data as well as audio recordings of telephone calls and personally identifiable information such as names, addresses and phone numbers.
+Added: Such webstore sales and personal data collection require us to transmit this confidential information securely over public networks.
Third parties may have the technology or knowledge to breach the security of customer transaction data.
−Removed: 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.
+Added: Although we, our service providers and third parties whose systems are interconnected with ours 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 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.
−Removed: In addition, state and federal laws and regulations are increasingly enacted to protect consumers against identity theft.
+Added: In addition, state and federal laws and regulations are increasingly enacted to protect customers against identity theft.
These laws and regulations will likely increase the costs of doing business and if we or our service providers fail to implement appropriate security measures, or to detect and provide prompt notice of unauthorized access as required by some of these laws and regulations, we could be subject to potential claims for damages and other remedies, which could adversely affect our business and results of operations.
For additional information regarding the impact of privacy regulations applicable to our business, see “—Risks Related to Regulatory, Legal and Tax Matters — Our failure to comply with U.S.
−Removed: and foreign laws related to privacy, data security, cybersecurity and data protection, such as the E.U.
−Removed: 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 we, our vendors, suppliers, and distributors 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, our confidential business information and data and may have obtained, and may in the future obtain, our users’ or customers’ data.
+Added: and foreign laws related to privacy, data security, cybersecurity and data protection, such as the General Data Protection Regulations and China Cybersecurity Law, could adversely affect our financial condition, results of operations, and our brand.”
+Added: We and certain of our vendors and third parties whose systems are interconnected with ours have experienced cyber-attacks in the past, and we, our vendors, suppliers, distributors and other commercial partners 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 end users’ or commercial customers’ data.
Our security measures have in the past, and may in the future, be breached due to human error, malfeasance, or otherwise.
−Removed: 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.
+Added: 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 end users’ or commercial customers’ data.
Any such breach or unauthorized access could result in significant legal and financial exposure, costly and time-intensive notice requirements or other remediation efforts, damage to our reputation, and a loss of confidence in the security of our products and services.
−Removed: Any such breach or unauthorized access could also lead to customers stop using our products and services, deter new customers from using our products and services, and otherwise negatively impact our ability to grow and operate our business.
+Added: Any such breach or unauthorized access could also lead customers to stop using our products and services, deter new customers from using our products and services, and otherwise negatively impact our ability to grow and operate our business.
Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
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Any additional recoveries are likely remote and therefore cannot be assured.
−Removed: 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.
−Removed: Any future illegal acts such as phishing, social engineering or other fraudulent conduct that go undetected may have significant negative impacts on our reputation, operating results and stock price.
Our business and prospects depend on the strength of our brand.
−Removed: 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 is critical to expanding our base of distributors and end users.
+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 our customers and the end 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.
We may fail to effectively manage the challenges associated with our growth.
−Removed: Over the past several years we have expanded, and continue to expand, our product offerings, the number of customers we sell to, our transaction volumes, the number and type of our facilities, and the number of contract manufacturers that we utilize to produce our products.
+Added: Over the past several years we have expanded, and continue to expand, our product offerings, the number of business partners we engage with, the number of customers we sell to, our transaction volumes, the number and type of our facilities, and the number of contract manufacturers that we utilize to produce our products.
Failure to effectively manage the increased complexity associated with this expansion, particularly in light of our lean management structure, would make it difficult to conduct our business, fulfill customer orders, and pursue our strategies.
−Removed: We may also need to increase costs to add personnel, upgrade or replace our existing reporting systems, as well as improve our business processes and controls as a result of these changes.
+Added: We may also need to increase costs to add personnel, upgrade or replace our existing reporting systems, as well as improve our business processes and controls as a result of this expansion.
If we fail to effectively manage any of these challenges, we could suffer inefficiencies, errors and disruptions in our business, which in turn would adversely affect our results of operations.
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We use components that are subject to price fluctuations, shortages or interruptions of supply.
−Removed: 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: 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.
−Removed: 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.
+Added: The cost, quality and availability of these components are essential to the production and sale of all of our products.
+Added: Disruptions in the supply of components could delay or disrupt the supply of our products, increase our costs and affect our business, results of operations and financial condition.
+Added: For example, 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.
+Added: These supply shortages resulted in increased component delivery lead times and increased costs to obtain components, particularly chipsets, and resulted in delays in product production.
We do not stockpile sufficient components, particularly the chipsets, to cover the time it would take to re-engineer our products to replace the components used to manufacture our products.
−Removed: If there are shortages of chipsets or other components used to manufacture our products, while we expect to work closely with our suppliers and contract manufacturers to minimize the potential adverse impacts of such supply shortage, there are many companies seeking to purchase the same components, many of which have greater resources and larger market share than we have, which may limit the effectiveness of our efforts.
+Added: If there are shortages of chipsets or other components used to manufacture our products, there are many companies seeking to purchase the same components, many of which have greater resources and larger market share than we have, which may limit the effectiveness of our efforts to minimize the potential adverse impacts of such supply shortages.
There is also no assurance that we will be able to obtain sufficient chipsets or other components on acceptable terms, if at all, which could delay or disrupt the supply of our products and affect our business, results of operations and financial condition.
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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.
−Removed: For example, we currently rely upon some chipset suppliers, such as Qualcomm and Broadcom, as single-source suppliers of certain components for some of our products, and a disruption in the supply of those components would significantly disrupt our business.
+Added: example, we currently rely upon some chipset suppliers, such as Qualcomm and Broadcom, as single-source suppliers of certain components for some of our products, and a disruption in the supply of those components would significantly disrupt our business.
We and our contract manufacturers generally rely on short-term purchase orders rather than long-term contracts with the suppliers of components for our products, particularly chipsets.
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For example, in the last decade, China has suffered health crises related to the outbreak of avian influenza, severe acute respiratory syndrome and COVID-19.
−Removed: The COVID-19 pandemic, the military conflict between Russia and Ukraine, the escalating tensions between China and Taiwan and resulting global disruptions have caused significant volatility in financial markets and the domestic and global economy.
+Added: The military conflict between Russia and Ukraine, the escalating tensions between China and Taiwan and resulting global disruptions have caused significant volatility in financial markets and the domestic and global economy.
This disruption can contribute to potential payment delays or defaults in our accounts receivable, affect asset valuations resulting in impairment charges, and affect the availability of financing credit as well as other segments of the credit markets.
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General global economic downturns and macroeconomic trends, including inflation or slowed economic growth, may negatively affect our customers and their ability to purchase our products.
−Removed: A downturn or such other trends may decrease our revenues and
−Removed: increase our costs and may increase credit risk with our customers and impact our ability to collect account receivable and recognize revenue.
+Added: 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 accounts 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 global trade policies, and the instability in the geopolitical environment in many parts of the world.
−Removed: 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.
+Added: Inflation in the United States and the other countries that we operate has remained volatile and has shown recent signs of acceleration.
Rising inflation could have an adverse impact on our expenses.
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Failure to manage these fluctuations could adversely impact our results of operations or financial conditions.
−Removed: 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.
+Added: 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 customer 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.
−Removed: 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: 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: If global economic conditions are volatile or if economic conditions deteriorate, the consumer demand for our products may not reach our sales targets.
+Added: Factors affecting the level of customer spending include general market conditions, macroeconomic conditions, fluctuations in foreign exchange rates and interest rates, and other factors such as customer confidence, the availability and cost of customer credit, levels of unemployment and tax rates.
+Added: A tighter credit market for customer, 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 customer demand for our products may not reach our sales targets.
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.
−Removed: Our sensitivity to economic cycles and any related fluctuation in consumer demand could adversely affect our business, financial condition and results of operations.
+Added: Our sensitivity to economic cycles and any related fluctuation in customer demand could adversely affect our business, financial condition and results of operations.
We have been investing and expect to continue to invest in growth areas 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.
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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 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.
+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 customer acceptance, the effective forecasting and management of product demand, purchase commitments, inventory levels and vendor deposit levels, 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, 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.
+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
+Added: 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.
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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 cust omer behavior.
+Added: Our growth depends in part on the success of our strategic relationships with third parties and our ability to integrate with third-party applications and software.
+Added: We believe that the success of our business depends, in part, on our ability to integrate with third party data, software and other functionalities into our products and services, and we anticipate that the growth of our business will continue to depend on these third-party relationships, including with payment processors, telecommunication providers, cloud storage providers, technology licensors, cybersecurity providers, monitoring centers, and other technology partners.
+Added: Integrating third-party content, data and technology requires significant time and resources, and, in certain circumstances, third-party providers could alter the terms of their agreement or terminate their relationships with us, compete directly against us, partner with our competitors or make material changes to their businesses, solutions or services that could harm our business.
+Added: We may also be adversely affected by features, changes or alterations to for the underlying technologies developed by third parties, or we may fail to maintain our relationship with certain third parties which could hinder our ability to integrate with, or transfer data from, their offerings into our platform.
+Added: Third parties also may refuse to partner with us or choose to limit or restrict our access to their offerings.
+Added: If we cannot continue integrating existing, or fail to integrate new, third-party offerings and technologies into our platform and solutions, then we may lose existing customers to competitors or be unable to successfully compete for new business opportunities.
+Added: In addition, if we lose access to certain solutions or capabilities from a particular partner or experience a significant reduction or disruption in the supply of such solutions or capabilities, then our business and operating results could be adversely impacted.
Our strategy for our products depends upon effectively maintaining and further developing our sales channels, including developing and supporting our retail sales channel and distributors.
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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.
+Added: If we are unable to anticipate customer preferences and successfully develop desirable products and solutions, we might not be able to maintain or increase revenue and profitability.
+Added: Our success depends on our ability to identify and originate product trends as well as to anticipate, gauge and react to changing customer demands in a timely manner.
+Added: 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 customer preferences.
+Added: If we are unable to introduce appealing new 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.
+Added: 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.
+Added: We may not be able to achieve an acceptable return, if any, on our research and development efforts and the introduction of new products into our portfolio, and our business, results of operations, liquidity and financial condition may be adversely affected.
+Added: As we continually seek to enhance our products, we will incur additional costs to incorporate new or revised features.
+Added: We might not be able to, or determine that it is not in our interests to, raise prices to compensate for any additional costs.
+Added: We are incorporating artificial intelligence technologies into our products, services and processes.
+Added: These technologies may present business, compliance, and reputational risks.
+Added: Recent technological advances in AI and machine-learning technology both present opportunities and pose risks to us.
+Added: If we fail to keep pace with rapidly evolving technological developments in AI, our competitive position and business results may suffer.
+Added: At the same time, use of AI has recently become the source of significant media attention and political debate.
+Added: The introduction of these technologies, particularly generative AI, into our internal processes, and new and existing offerings may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation, and financial results.
+Added: In addition, our personnel could, unbeknownst to us, improperly utilize AI and machine learning-technology while carrying out their responsibilities.
+Added: The use of AI can lead to unintended consequences, including generating content that appears correct but is factually inaccurate, misleading or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our reputation and business and expose us to risks related to inaccuracies or errors in the output of such technologies.
+Added: We also face risks of competitive disadvantage if our competitors more effectively use AI to create new or enhanced products or services that we are unable to compete against.
+Added: As we increase our investment in technology, software and systems to adopt AI into our internal processes, products and services, such investments may not increase productivity, result in more efficient operations or deliver better products, services and customer experiences.
We may experience risks in our investments due to changes in the market, which could adversely affect the value or liquidity of our investments.
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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, 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.
−Removed: Our reputation and/or business could be negatively impacted by ESG matters and/or our reporting of such matters.
−Removed: 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.
−Removed: 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.
−Removed: The achievement of any goals that we may announce may rely on the accuracy of our estimates and
−Removed: assumptions supporting those goals.
−Removed: 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 regulators or stakeholders, including our shareholders.
−Removed: 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.
+Added: Our reputation and/or business could be negatively impacted by sustainability matters and/or our reporting of such matters.
+Added: There is an increasing focus from regulators, certain investors, and other stakeholders concerning sustainability matters, both in the United States and internationally.
+Added: Sustainability-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.
+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, sustainability-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 regulators or stakeholders, including our shareholders.
+Added: Our actual or perceived failure to adopt or achieve any sustainability-related
+Added: initiatives, goals, or commitments that we make could negatively impact our reputation or otherwise materially harm our business.
At the same time, “anti-ESG” sentiment has recently gained momentum with a number of stakeholders, government entities, regulators and lawmakers.
The proposal or enactment of anti-ESG legislation, regulation, policies and enforcement priorities may result in increased scrutiny, reputational risk, lawsuits or market access restrictions.
−Removed: If we are unable to anticipate customer preferences and successfully develop desirable products and solutions, we might not be able to maintain or increase revenue and profitability.
−Removed: Our success depends on our ability to identify and originate product trends as well as to anticipate, gauge and react to changing customer demands in a timely manner.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: We may not be able to achieve an acceptable return, if any, on our research and development efforts, and our business, results of operations, liquidity and financial condition may be adversely affected.
−Removed: As we continually seek to enhance our products, we will incur additional costs to incorporate new or revised features.
−Removed: We might not be able to, or determine that it is not in our interests to, raise prices to compensate for any additional costs.
−Removed: We are incorporating artificial intelligence technologies into our products, services and processes.
−Removed: These technologies may present business, compliance, and reputational risks.
−Removed: Recent technological advances in AI and machine-learning technology both present opportunities and pose risks to us.
−Removed: If we fail to keep pace with rapidly evolving technological developments in AI, our competitive position and business results may suffer.
−Removed: At the same time, use of AI has recently become the source of significant media attention and political debate.
−Removed: The introduction of these technologies, particularly generative AI, into internal processes, and new and existing offerings may result in new or expanded risks and liabilities, including due to enhanced governmental or regulatory scrutiny, litigation, compliance issues, ethical concerns, confidentiality or security risks, as well as other factors that could adversely affect our business, reputation, and financial results.
−Removed: In addition, our personnel could, unbeknownst to us, improperly utilize AI and machine learning-technology while carrying out their responsibilities.
−Removed: The use of AI can lead to unintended consequences, including generating content that appears correct but is factually inaccurate, misleading or otherwise flawed, or that results in unintended biases and discriminatory outcomes, which could harm our reputation and business and expose us to risks related to inaccuracies or errors in the output of such technologies.
−Removed: We also face risks of competitive disadvantage if our competitors more effectively use AI to create new or enhanced products or services that we are unable to compete against.
−Removed: As we increase our investment in technology, software and systems to adopt AI into our internal processes, products and services, such investments may not increase productivity, result in more efficient operations or deliver better products, services and customer experiences.
Risks Related to Our International Operations
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• import and export license requirements, economic sanctions, contractual limitations and other trade barriers;
−Removed: • tariffs, the threat of new or increased tariffs, and escalating trade tensions;
+Added: • tariffs, the threat of new or increased tariffs, and ongoing trade tensions and related uncertainty;
• 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.
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• the complexities of foreign tax systems and changes in their tax rates and rules;
−Removed: • stringent consumer protection and product compliance regulations that are costly to comply with and may vary from country to country;
+Added: • stringent customer protection and product compliance regulations that are costly to comply with and may vary from country to country;
• limited protection and enforcement regimes for intellectual property rights in some countries;
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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.
−Removed: 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.
+Added: For example, ongoing tensions between the U.S., China and other countries have resulted in, and may result in the future, further changes in laws or regulations that will affect our ability and/or increase our costs to manufacture and sell our products.
Recently, the U.S.
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The current U.S.
−Removed: 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.
+Added: 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, types of goods and bases for such tariffs.
Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S.
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administration has negotiated tariff rates with several countries, the negotiation with many countries is ongoing.
−Removed: Due to the numerous executive orders, the overall determination of duties on imports has become complex.
+Added: Due to the numerous actions by the current U.S.
+Added: administration, the overall determination of duties on imports has become complex.
+Added: Further, recent judicial rulings have introduced significant additional uncertainty regarding the legal basis for U.S.
+Added: tariff policy.
+Added: On February 20, 2026, the U.S.
+Added: Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”) but did not address potential refunds for tariffs paid under
+Added: The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments.
+Added: Following the Supreme Court's decision, the U.S.
+Added: presidential administration announced its intention to invoke other laws to collect tariffs and announced certain new tariffs in addition to existing non-IEEPA tariffs.
+Added: There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs.
The 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.
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The progress and continuation of trade negotiations between the U.S., China, Vietnam and other countries continues to be uncertain.
−Removed: 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.
−Removed: 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
−Removed: 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.
+Added: Trade tensions have intensified and could continue to intensify, or new trade disputes could arise, in the future, 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.
+Added: 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.
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Our patent rights, and the prospective rights sought in our pending patent applications, may not be meaningful or provide us with any commercial advantage and they could be opposed, contested, circumvented or designed around by our competitors or be declared invalid or unenforceable in legal proceedings.
−Removed: In addition, patents may not be issued from any of our current or future patent applications.
+Added: In addition, patents may not be issued from any of our current or future
+Added: patent applications.
Any failure of our patents or other intellectual property rights to adequately protect our technology might make it easier for our competitors to offer similar products or technologies.
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Although we have taken steps to combat counterfeiting, it is difficult or impossible to detect or prevent all instances of counterfeiting.
−Removed: Particularly if the quality of counterfeit products is poor, damage could be done to our brand.
+Added: Particularly if the quality of counterfeit
+Added: 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.
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We receive a substantial majority of our revenues from the sale of enterprise WLAN and outdoor wireless networking equipment.
−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 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.
+Added: As we expand into other products and services, such as video surveillance equipment, voice communication equipment, alarm monitoring, security access equipment, wireless backhaul, customer electronics, and Software-as-a-Service, 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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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 June 30, 2025, our balance outstanding under the Amended Credit Agreement for our Term Facilities (as defined herein), was $250.0 million.
−Removed: There was no outstanding balance on the Revolving Facility (as defined herein) as of June 30, 2025.
−Removed: The Facilities mature in March 2026.
+Added: Subject to the limits contained in the 2026 Credit Agreement (as defined in Note 8, Debt of the Notes to our Consolidated Financial Statements) that governs the 2026 Revolving Facility, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisition, or for other purposes.
+Added: If we do so, the risks related to our debt level could increase.
+Added: Specifically, our debt level could impair our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes.
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.
If additional financing is not available when required or on acceptable terms, we may not be able to pay dividends, repurchase shares of common stock, expand our business, develop or enhance our products, take advantage of business opportunities or respond to competitive pressures, which could result in lower revenues and reduce the competitiveness of our products.
−Removed: In addition, any potential debt level increases could have important consequences, including:
+Added: In addition, any potential debt level increases could have other important consequences, including:
• requiring a substantial portion of cash flows from operations to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flows to fund our operations and capital expenditures, pay dividends, repurchase shares of our common stock and pursue business opportunities;
1 unchanged sentence
• limiting our ability to make strategic acquisitions or causing us to make non-strategic divestitures;
−Removed: • limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;
+Added: • limiting our ability to borrow additional funds or to refinance debt;
• limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to competitors who are less highly leveraged or have access to more capital.
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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: 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.
Risks Related to Our Common Stock
Our Chief Executive Officer owns a majority of our common stock.
−Removed: Pera, our founder, Chairman, and Chief Executive Officer, is able to exercise voting rights with respect to a majority of the voting power of our outstanding stock and therefore has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets.
+Added: Pera, our founder, Chairman, and Chief Executive Officer, is able to exercise voting rights with respect to a majority of the voting power of our outstanding common stock and therefore has the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets.
This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders do not support.
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Our common stock has experienced substantial price volatility since our initial public offering.
−Removed: In addition, the stock market as a whole has experienced major price and volume fluctuations that have affected the stock price of many technology companies in ways that may have been unrelated to these companies’ operating performance.
+Added: In addition, because a substantial majority of our outstanding common stock is held by our Chief Executive Officer, our public float is relatively limited, which may contribute to greater volatility in the trading price of our common stock compared to other companies with a market capitalization similar to ours.
+Added: Finally, the stock market as a whole has experienced major price and volume fluctuations that have affected the stock price of many technology companies in ways that may have been unrelated to these companies’ operating performance.
Factors that could cause our results of operation and stock price to fluctuate include:
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We are subject to export control and economic sanctions laws in the United States and elsewhere which could impair our ability to compete in international markets and subject us to liability if we do not comply with applicable laws.
−Removed: A substantial majority of our sales are into countries outside of the United States.
+Added: A substantial portion of our sales are into countries outside of the United States.
Sales of our products into certain countries are restricted or prohibited under U.S.
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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 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
+Added: 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 to comply with U.S.
−Removed: and foreign laws related to privacy, data security, cybersecurity and data protection, such as the E.U.
−Removed: Data Protection Directive and China Cybersecurity Law, could adversely affect our financial condition, results of operations, and our brand.
−Removed: We are or may become subject to a variety of laws and regulations in the United States and abroad regarding privacy, data security, cybersecurity and data protection.
+Added: and foreign laws related to privacy, data security, data access, cybersecurity and data protection, such as the General Data Protection Regulation and China Cybersecurity Law, could adversely affect our financial condition, results of operations, and our brand.
+Added: We are or may become subject to a variety of laws and regulations in the United States and abroad regarding privacy, data security, data access, cybersecurity and data protection.
These laws and regulations are continuously evolving and developing.
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The GDPR includes operational requirements for companies that receive or process personal data of residents of the European Union that are different than those previously in place in the European Union, and that include significant penalties for non-compliance.
−Removed: Another example, in November 2016, the Standing Committee of China’s National People’s Congress passed China’s first Cybersecurity Law (“CSL”), which took effect in June 2017.
+Added: As another example, in November 2016, the Standing Committee of China’s National People’s Congress passed China’s first Cybersecurity Law (“CSL”), which took effect in June 2017.
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.
−Removed: 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.
−Removed: Additionally, California enacted the California Consumer Privacy Act, as amended (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.
+Added: China has also implemented 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.
+Added: Additionally, California enacted the California Consumer Privacy Act, as amended (the “CCPA”) that, among other things, requires covered companies to provide new disclosures to California customers, and afford such customers 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.
The CCPA was significantly expanded on January 1, 2023, when the California Privacy Rights Act (“CPRA”) became effective.
−Removed: 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
−Removed: 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.
+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.
−Removed: For example, states such as Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Virginia, and Utah have enacted their own data privacy laws.
+Added: For example, states such as Alabama, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Louisiana, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oklahoma, Oregon, Rhode Island, Tennessee, Texas, Virginia, Vermont and Utah have enacted their own data privacy laws.
Given the recent implementation of these regulations, we cannot yet predict the impact of these regulations on our business or operations.
−Removed: We strive to comply with all applicable laws, policies and legal obligations relating to privacy, data security, cybersecurity and data protection.
+Added: We strive to comply with all applicable laws, policies and legal obligations relating to privacy, data security, data access, cybersecurity and data protection.
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, additional reporting requirements and/or oversight, bans or restrictions on processing personal data, orders to destroy or not use personal data, loss of customers, interruptions or stoppages in our business operations, inability to process personal data or operate in certain jurisdictions, limited ability to develop or commercialize our products and services, expenditure of time and resources to defend against claims or inquiries, changes to our business model or operation, or negative publicity, and could have an adverse effect on our brand, results of operations and financial condition.
−Removed: 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.
+Added: Governments are continuing to focus on privacy, data security, data access, cybersecurity and data protection 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.
Any significant change to applicable laws, regulations, or industry practices regarding our employees’ and users’ data could require us to modify our business, services and products features, possibly in a material manner, and may limit our ability to develop new products, services, and features.
+Added: For example, the E.U.
+Added: Data Act, which became effective in late 2025, imposes requirements relating to access to and use of data generated by connected products and related services, which may require us to modify our products, services, contracts or data practices and could increase our compliance costs.
Although we have made efforts to design our policies, procedures, and systems to comply with the current requirements of applicable state, federal, and foreign laws, changes to applicable laws and regulations in this area could subject us to additional regulation and oversight, any of which could significantly increase our operating costs.
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The vast majority of our products operate in unlicensed radio frequency (“RF”) spectrum, which is used by a wide range of devices such as cordless phones, baby monitors, and microwave ovens, and is becoming increasingly crowded.
−Removed: If such spectrum usage continues to increase through the proliferation of consumer electronics and products competitive with ours, and others, the resultant higher levels of clutter and interference in the frequency bands used by our products could decrease the usage of our products.
+Added: If such spectrum usage continues to increase through the proliferation of electronics and products competitive with ours, and others, the resultant higher levels of clutter and interference in the frequency bands used by our products could decrease the usage of our products.
Our business could be further harmed if currently unlicensed RF spectrum becomes subject to licensing in the United States or elsewhere.
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We could be adversely affected by unfavorable results in litigation.
−Removed: We may be involved, from time to time, in a variety of claims, lawsuits, investigations, and proceedings relating to contractual disputes, intellectual property rights, employment matters, regulatory compliance matters, consumer or securities class-actions and other litigation matters relating to various claims that arise in the normal course of business and otherwise.
+Added: We may be involved, from time to time, in a variety of claims, lawsuits, investigations, and proceedings.
+Added: These matters may relate to contractual disputes, including disputes regarding limitations of liability clauses and liability disclaimers contained within our contracts with end users, customer claims, including claims relating to pricing, tariffs or other changes, intellectual property rights, employment matters, regulatory compliance matters, and securities class-actions.
+Added: We may also become involved in other litigation matters relating to various claims that arise in the normal course of business and otherwise.
It can be difficult or impossible to predict the outcome of legal proceedings with any degree of certainty, particularly given that laws may be ambiguous and factual findings can often be the result of incomplete evidence, opinions, varying standards or proof, and extraneous factors.
−Removed: such proceedings or matters may adversely affect how we operate the business, divert the attention of management from the operation of the business, have an adverse effect on our reputation, result in additional costs and adversely affect our results of operations.
+Added: Any such proceedings or matters may adversely affect how we operate the business, divert the attention of management from the operation of the business and have an adverse effect on our reputation.
+Added: In addition, management may not adequately reserve for a contingent liability, or we may suffer unforeseen liabilities, which could result in additional costs and adversely affect our results of operations.
If one or more of the legal proceedings to which we may be or become a party are resolved against us, our results of operations and financial condition could be adversely affected.
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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.
−Removed: 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.
+Added: Our commercial customers, end users, service providers 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, systems failures, and security vulnerabilities, even if our agreements with them do 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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Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations, and prevent us from producing accurate and timely financial statements to manage our business.
−Removed: If we fail to do so, our business could be negatively affected and our independent registered public accounting firm may be unable to attest to the fair presentation of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.
+Added: If we fail to do so, our business could be negatively affected and our independent registered public accounting firm may be unable to attest to the fair presentation of our consolidated financial statements included in our Annual Reports on Form 10-K in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act.
If we cannot provide reliable financial reports and effectively prevent fraud, our reputation and results of operations could be harmed.
Even effective internal controls have inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud.
−Removed: Therefore, even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.
+Added: Therefore, even effective internal controls can provide only reasonable assurance with respect to the
+Added: preparation and fair presentation of financial statements.
The preparation of consolidated financial statements also requires us to make estimates and assumptions.
27 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.
−Removed: 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% in each taxing jurisdiction for multinational enterprises, and additional amendments or guidance regarding comprehensive U.S.
+Added: Multi-jurisdictional changes enacted in response to the guidelines provided by the Organization for Economic Cooperation and Development to address base erosion and profit shifting, including a Pillar Two framework that imposes a minimum tax rate of 15% in each taxing jurisdiction for multinational enterprises, and additional amendments or guidance regarding comprehensive U.S.
tax reform, among other things, may change certain U.S.
23 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.