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Item 1A. Risk Factors

2026-02-25 compared with 2025-02-14 · 201 added, 70 removed, 353 unchanged (43% of the section changed)

Risk Factor Summary

An investment in shares of our common stock is subject to a number of risks that may prevent us from achieving our business objectives or otherwise adversely affect our business, results of operations or financial condition.

The following list contains a summary of some, but not all, of these risks.

You should read this summary together with the more detailed description of each risk factor contained below before making an investment decision.

Risks Related to Our Business and Industry

● Unfavorable market conditions have adversely affected, and may adversely affect, our operating results.

● We are exposed to risks of operating a global business.

● Changes in trade policies, export controls, and the ongoing trade dispute between the U.S.

and China have adversely affected, and may continue to adversely affect, our business, results of operations, and financial condition.

● We may be unable to obtain required export licenses for the sale of our products.

● We are exposed to risks and uncertainties related to changes in global trade policies, global trade disputes, and increased tariffs.

● The timing of our orders, shipments, and revenue recognition may cause our quarterly operating results to fluctuate significantly.

● We face significant competition.

● We operate in industries characterized by rapid technological change.

Risks Related to Intellectual Property and Cybersecurity

● Disruptions in our information technology systems or data security incidents could result in significant financial, legal, regulatory, business, and reputational harm to us.

● We may be unable to effectively enforce and protect our intellectual property rights.

Financial, Accounting and Capital Market Risks

● Our operating results may be adversely affected by tightening credit markets.

● We are subject to foreign currency exchange risks.

● We may be required to take impairment charges on assets.

● Our current debt facilities may contain certain restrictions, covenants and repurchase provisions that may limit our ability to raise the funds necessary to meet our working capital needs, which may include the cash conversion of the Notes or repurchase of the Notes for cash upon a fundamental change.

Risks Related to the Planned Merger with Axcelis Technologies, Inc.

● The planned merger with Axcelis Technologies, Inc.

is subject to certain closing conditions, including the receipt of consents and approvals from governmental authorities, which may impose unexpected delays in the completion of the merger, or the merger may not be completed at all.

● Failure to complete the Merger in a timely manner or at all could materially and adversely affect our stock price and future business and financial results.

● The pendency of the Merger could materially and adversely affect our business and operations.

● Our current stockholders will have a reduced ownership interest and voting power in the combined company after the Merger.

General Risk Factors

● The price of our common shares is volatile and could decrease.

● Our inability to attract, retain, and motivate employees could have a material adverse effect on our business.

● We are subject to risks of non-compliance with environmental, health, and safety regulations.

Key Risk Factors That May Impact Future Results

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Risks Related to Our Business and Industry

Unfavorable market conditions have adversely affected, and may continue to adversely affect, our operating results.

Unfavorable market conditions have adversely affected, and may adversely affect, our operating results.

Conditions of the markets in which we operate are volatile and may experience significant deterioration.

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sales and operations are subject to risks inherent in conducting business outside the United States, many of which are beyond our control including:

● global trade issues and uncertainties with respect to trade policies, including tariffs, trade sanctions, and international trade disputes, and the ability to obtain required import and export licenses;

● political and social attitudes, laws, rules, regulations, and policies within countries that favor local companies over U.S.

companies, including government-supported efforts to promote local competitors;

● differing legal systems and standards of trade which may not honor our contractual or intellectual property rights and which may place us at a competitive disadvantage;

● pressures from foreign customers and foreign governments for us to increase our operations and sourcing in the foreign country, which may necessitate the sharing of sensitive information and intellectual property rights;

● pressures from foreign customers and foreign governments for us to increase our operations and sourcing in the

foreign country, which may necessitate the sharing of sensitive information and intellectual property rights;

● conflicting and changing governmental laws and regulations, including varying labor laws and tax regulations;

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These challenges, together with other challenges associated with operating a global business, may adversely affect our ability to recognize revenue, our gross margins on the revenue we do recognize, and our other operating results.

Changes in U.S.

trade policy and export controls and ongoing trade disputes between the U.S.

Changes in trade policies, export controls, and the ongoing trade dispute between the U.S.

and China have adversely affected, and may continue to adversely affect, our business, results of operations, and financial condition.

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Other changes in trade policy by BIS have included, without limitation, the elimination of license exception for Civil End Users (“CIV”), the implementation of new regulations governing the sale of equipment to defined “Military End Users” and for defined “Military End Uses”, the addition of several companies to the U.S.

Commerce Department’s Unverified List and Entity List (including Swaysure Technology Co., Ltd.

and Semiconductor Manufacturing International Corporation and certain related entities), and the expansion of the “foreign direct product rule” to restrict the sale of certain products if Huawei Technologies Co., Ltd.

or its affiliates are parties to a transaction involving the products.

Commerce Department’s Unverified List and Entity List (including Swaysure Technology Co., Ltd., Semiconductor Manufacturing International Corporation, and certain similar and related entities), and the expansion of the foreign direct product rule to restrict the sale of certain products if certain named China customers or their affiliates are parties to a transaction involving the products.

The effect of these changes, among others, is that U.S.

companies are now required to obtain export licenses – now at times with a presumption of denial – before providing commodities, software, and technology (which are subject to the regulations) to customers for whom licensing requirements did not previously apply.

These changes have had, and will likely continue to have, a negative effect on our ability to sell and service certain equipment in China.

The heightened export restrictions may also result in shipping delays, as the new regulations are interpreted and applied, and may inhibit technical discussions with existing or prospective customers, negatively impacting our ability to pursue sales opportunities.

These changes have had, and will likely continue to have, a negative effect on our ability to sell and service certain equipment and for certain end users in China.

The heightened export restrictions have resulted, and may continue to result, in confusion and shipping delays, as the new regulations are interpreted and applied, and may inhibit technical discussions with existing or prospective customers, negatively impacting our ability to pursue sales opportunities.

The administrative processing, attendant delays and risk of ultimately not obtaining required export approvals pose a particular disadvantage to the Company relative to certain of our non-U.S.

competitors and increase our exposure to foreign and Chinese domestic competition.

This difficulty and uncertainty has adversely affected our ability to compete for and win business from customers in China.

This difficulty and uncertainty has adversely affected our ability to compete for and win business from customers in

Foreign customers affected by U.S.

government sanctions or threats of sanctions may respond by developing their own solutions to replace our products or by utilizing our foreign

competitors’ products.

These heightening restrictions, together with the prospect of additional governmental action (which may include, for example, significant increases in tariffs on a broad array of goods), has adversely affected, and is likely to continue to adversely affect, demand for our products and the results of our operations.

government sanctions or threats of sanctions may respond by developing their own solutions to replace our products or by utilizing our foreign competitors’ products.

These heightening restrictions, together with the prospect of additional governmental action (which has included and may include increases in tariffs, domestic and foreign, on a broad array of goods), has adversely affected, and is likely to continue to adversely affect, demand for our products and the results of our operations.

The changes in U.S.

trade policy and export controls, as well as sanctions imposed by the U.S.

against certain Chinese companies, have triggered retaliatory action by China (including China’s recent ban on exports to the United States of critical minerals gallium, germanium and antimony) and could trigger further retaliation (including the possible escalation of geopolitical tensions between China and Taiwan).

against certain Chinese companies, have triggered retaliatory action by China (including China’s 2025 ban on exports to the United States of rare earth minerals which are used in certain of our products) and could trigger further retaliation (including the possible escalation of geopolitical tensions between China and Taiwan).

In addition, China has provided, and is expected to continue to provide, significant assistance, financial and otherwise, to its domestic industries, including some of our competitors.

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In addition, the Chinese government may restrict us from participating in the China market or may prevent us from competing effectively with Chinese companies.

In the fourth quarter of 2025, two of our laser annealing systems shipped to customers in China were detained at the Port of San Francisco pending review by U.S.

Customs and Border Protection (“CBP”) prior to export.

Title, risk of loss and control transferred to the customers prior to year-end and we had satisfied the contractual conditions to seek payment under the applicable letters of credit.

While both systems were subsequently released by CBP and thus recognized into revenue during the year ended December 31, 2025, we can provide no assurances as to whether U.S.

government policy will impact future shipments to the impacted customers or other customers in China.

Further, trade-related government actions – including for example the addition, past and future, of China-based companies to the U.S.

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Whether with respect to sales to customers located in China or otherwise, products which (i) are manufactured in the United States, (ii) incorporate controlled U.S.

origin parts, technology, or software, or (iii) are based on U.S.

technology, are subject to the U.S.

Export Administration Regulations (“EAR”) when exported to and re-exported from international jurisdictions, in addition to the local jurisdiction’s export regulations applicable to individual shipments.

origin parts, technology, or software, or (iii) are based on certain U.S.

technology or made using certain tools with a U.S.

nexus, are subject to the U.S.

Export Administration Regulations (“EAR”) when exported, re-exported, or transferred to or within international jurisdictions.

Local jurisdictions’ export regulations may also be applicable to individual shipments.

Currently, our laser annealing, MOCVD, MBE, SiC and certain other systems and products are controlled for export under the EAR.

Licenses or proper license exceptions may be required for the shipment of our products to certain customers or countries.

Licenses or proper license exceptions may be required for the shipment of our products to or within certain customers or countries.

Obtaining an export license or determining whether an export license exception exists often requires considerable effort by us and cooperation from the customer, which can add time to the order fulfillment process.

We may be unable to obtain required export licenses or qualify for export license exceptions and, as a result, we may be unable to export products to our customers and/or meet their servicing needs (potentially requiring us to refund customer prepayments for unperformed contractual obligations).

Furthermore, circumstances may arise where shipments are detained or export clearance is uncertain, which may impact the timing of revenue recognition or our ability to recognize revenue at all.

Non-compliance with the EAR or other applicable export regulations could result in a wide range of penalties including the denial of export privileges, fines, criminal penalties, and the seizure of commodities.

In the event that an export regulatory body determines that any of our shipments violate applicable regulations, we could be fined significant sums and our export capabilities could be restricted, which could have a material adverse impact on our business and reputation.

We are exposed to risks and uncertainties related to changes in global trade policies, global trade disputes, and increased tariffs.

In February of 2025, the U.S.

Government issued proclamations imposing a 25% tariff on imports of steel and aluminum products (including derivative products).

In April 2025, the U.S.

Government announced a baseline tariff of 10% on imported products from all countries, plus additional individualized reciprocal tariffs on countries with whom the United States has the largest trade deficits.

In response, affected foreign countries, including China and members of the European Union, announced, threatened and imposed retaliatory tariffs on U.S.

The tariff landscape continues to shift and evolve (including the recent Supreme Court decision on the legality of certain tariffs), creating considerable uncertainty for U.S.

manufacturers, particularly those – such as Veeco – with global sales, supply chains and international operations.

Tariffs and other duties have increased, and will likely continue to increase, the cost of our parts and components.

These increased costs have negatively impacted our margins and have caused us, in certain instances, to increase our prices to our customers, which may reduce demand for our products.

Our customers, who may be confronted with the prospect of price and/or cost increases resulting from U.S.

tariffs and tariffs imposed by their home country governments, may seek to cancel equipment orders with us, attempt to renegotiate terms in a manner unfavorable to Veeco, or cease to do business with us altogether.

Furthermore, the current tariff landscape favors certain of our competitors with foreign manufacturing operations, which are not subject to U.S.

tariffs nor foreign country tariffs imposed on the import of U.S.

origin products.

The volatility and unpredictability of international trade policies and conditions add further complexity to our operations, making it extremely challenging to forecast and plan effectively.

We are not able to predict future trade policy of the United States or of any foreign country in which we do business.

The continuation or exacerbation of the current trade environment will adversely impact our costs and the demand for our products, which in turn could have a material adverse effect on our business, operating results and financial condition.

The timing of our orders, shipments, and revenue recognition may cause our quarterly operating results to fluctuate significantly.

We derive a substantial portion of our net sales in any fiscal period from the sale of relatively small number of high-priced systems.

As a result, the timing for the recognition of revenue for a single transaction could have a material effect on our sales and operating results for a particular fiscal period.

As is typical in our industry, orders and shipments often occur during the last few weeks of a quarter.

As a result, a delay of only a week or two can impact which period revenue is reported and can cause volatility in our revenue for a given reporting period.

Our quarterly results have fluctuated significantly in the past and we expect this trend to continue.

We face significant competition.

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Furthermore, we face competition from smaller emerging equipment companies whose strategy is to provide a portion of the products and services we offer, with a focused approach on innovative technology for specialized markets.

New product introductions

or enhancements by us or our competitors could cause a decline in sales or loss of market acceptance of our existing or prior generation products.

New product introductions or enhancements by us or our competitors could cause a decline in sales or loss of market acceptance of our existing or prior generation products.

Increased competitive pressure could also lead to intensified price competition resulting in lower profit margins.

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These and other costs could be substantial and our reputation could be harmed, resulting in a reduced demand for our products and a negative impact to our business.

In addition, our success is also subject to the risk of future disruptive technologies, including machine learning and artificial intelligence (“AI”).

While such technologies offer significant opportunities, they also pose complex and novel risks, including operational risks (such as factual errors or inaccuracies in work product developed using AI), the unintended release of proprietary information, costs of compliance associated with evolving AI laws, regulations and standards, privacy concerns with respect to data dissemination, risks related to intellectual property rights (with respect

to both the inputs to the program and ownership rights to AI work product), and risks related to AI’s impact on the workforce.

We are exposed to risks related to the use of artificial intelligence by us and by our competitors.

Our success is subject to the risk of future disruptive technologies, including machine learning and artificial intelligence (“AI”).

AI technology is complex and rapidly evolving and its implementation can be costly.

There is no guarantee that our use of AI will enhance our technologies, benefit our business operations, or produce products and services that are preferred by our customers.

There is no guarantee that our use of AI will

enhance our technologies, benefit our business operations, or produce products and services that are preferred by our customers.

Our competitors may be more successful in their use of AI and may develop superior products and services.

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Our customer base is also highly concentrated in terms of geography, and the majority of our sales are to customers located in a limited number of countries.

Dependence upon sales emanating from a limited number of regions increases

our risk of exposure to local difficulties and challenges, such as those associated with regional economic downturns, political instability, trade wars and other trade disruptions, fluctuating currency exchange rates, natural disasters, social unrest, regional epidemics, terrorism, and acts of war.

Dependence upon sales emanating from a limited number of regions increases our risk of exposure to local difficulties and challenges, such as those associated with regional economic downturns, political instability, trade wars and other trade disruptions, fluctuating currency exchange rates, natural disasters, social

unrest, regional epidemics, terrorism, and acts of war.

Our reliance upon customer demand arising primarily from a limited number of countries could materially and adversely impact our future results of operations.

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● other causes such as regional or global economic downturns or recessions, international trade disruptions, health epidemics, political instability, terrorism, or acts of war, which could result in delayed deliveries, manufacturing inefficiencies, increased costs, or order cancellations.

In addition, in the event of an unanticipated increase in demand for our products, our need to rapidly increase our business and manufacturing capacity may be limited by our working capital constraints and those of our suppliers, which

may cause or exacerbate interruptions in our manufacturing and supply chain operations.

Any or all of these factors could materially and adversely affect our business, financial condition, and results of operations.

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If we do not effectively manage our outsourcing efforts or if third party providers do not perform as anticipated, we may not realize the benefits of productivity improvements and we may experience operational difficulties, increased costs, manufacturing and installation interruptions or delays, inefficiencies in the structure and operation of our supply chain, loss of intellectual property rights, quality issues, increased product time-to-market, and an inefficient allocation of our human resources, any or all of which could materially and adversely affect our business, financial condition, and results of operations.

The timing of our orders, shipments, and revenue recognition may cause our quarterly operating results to fluctuate significantly.

We derive a substantial portion of our net sales in any fiscal period from the sale of a relatively small number of high-priced systems.

As a result, the timing for the recognition of revenue for a single transaction could have a material effect on our sales and operating results for a particular fiscal period.

As is typical in our industry, orders and shipments often occur during the last few weeks of a quarter.

As a result, a delay of only a week or two can impact which period revenue is reported and can cause volatility in our revenue for a given reporting period.

Our quarterly results have fluctuated significantly in the past and we expect this trend to continue.

Our sales cycle is long and unpredictable.

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These risks are particularly prevalent in the semiconductor market, which is often characterized by long customer qualification times, typically twelve to eighteen months.

Once qualified,

the ramp to volume production can take an additional extended period of time, often twelve to twenty-four months.

Once qualified, the ramp to volume production can take an additional extended period of time, often twelve to twenty-four months.

During these periods, little to no revenue will be recognized by us, while we will continue to incur research and development costs.

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We adjust our backlog for such cancellations and contract modifications, among other items.

A downturn in one or more of our businesses could result in an increase in order cancellations and postponements.

A downturn in one or more of our businesses could result in an increase in

order cancellations and postponements.

Also, our backlog may be impacted if we are unable to complete shipments to customers because of export control issues.

We write-off excess and obsolete inventory based on historical trends, future usage forecasts, and other factors including the amount of backlog we have on hand.

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Divestitures may also disrupt other parts of our businesses, distract the attention of our management, result in a loss of key employees or customers, and require that we allocate internal resources that would otherwise be devoted to operating our existing businesses.

Divestitures may expose us to unanticipated liabilities (including those arising from representations and warranties made to

a buyer regarding the businesses) and to ongoing obligations to support the businesses following such divestitures, any and all of which could adversely affect our financial condition and results of operations.

Divestitures may expose us to unanticipated liabilities (including those arising from representations and warranties made to a buyer regarding the businesses) and to ongoing obligations to support the businesses following such divestitures, any and all of which could adversely affect our financial condition and results of operations.

As a general principle, we seek to invest our capital in areas that we believe best align with our business strategy and will help optimize future returns.

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These risks have been exacerbated by an increase in employees working from home, global conflicts and geopolitical tensions (including increasing tension between the U.S.

and China governments), and by the possible use of AI to directly attack information systems with greater speed and efficiency than human bad actors.

and China governments), and by the possible use of new technologies, including AI and quantum computing, to directly attack information systems with greater speed and efficiency than human bad actors.

We have experienced, and our third-party providers have experienced, cybersecurity attacks, some of which have been, and may continue to be, successful.

Significant disruptions in our information technology systems (or those of our key suppliers, contract manufacturers, distributors, sales agents and other partners) or other data security incidents could adversely affect our business operations and result in the loss or misappropriation of, and unauthorized access to, sensitive information.

Future or ongoing disruptions or incidents, whether from attacks on our technology environment

or from computer viruses, natural disasters, terrorism, war or other causes, could result in a material disruption in our business operations, force us to incur significant costs and engage in litigation, harm our reputation, and subject us to liability under laws, regulations, and contractual obligations.

Future or ongoing disruptions or incidents, whether from attacks on our technology environment or from computer viruses, natural disasters, terrorism, war or other causes, could result in a material disruption in our business operations, force us to incur significant costs and engage in litigation, harm our reputation, and subject us to liability under laws, regulations, and contractual obligations.

We may be unable to effectively enforce and protect our intellectual property rights.

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In the event of a downturn, many of our customers may delay or reduce their purchases of our products and services.

If negative conditions in the credit markets, such as a recommencement of increases in interest rates, prevent our customers from obtaining credit or necessary financing,

product orders in these channels may decrease, which could result in lower revenue.

If negative conditions in the credit markets, including increases in interest rates, prevent our customers from obtaining credit or necessary financing, product orders in these channels may decrease, which could result in lower revenue.

In addition, we may experience cancellations of orders in backlog, rescheduling of customer deliveries, and attendant pricing pressures.

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Adverse changes in business conditions or worse-than-expected performance by acquired companies could negatively impact our estimates of future operations and result in impairment charges to acquired assets.

For example, during the fourth quarter of 2024, we recorded an asset impairment charge of $28.1 million related to the intangible assets acquired as part of our acquisition of Epliluvac AB.

For example, during the fourth quarter of 2024, we recorded an asset impairment charge of $28.1 million related to the intangible assets acquired as part of our acquisition of Epiluvac AB.

If our assets are further impaired, our financial condition and results of operations could be materially and adversely affected.

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Recommendations made pursuant to the Organization for Economic Cooperation and Development’s (“OECD”) Base Erosion and Profit Shifting (“BEPS”) project have led to changes in tax laws in numerous countries and could increase our tax obligations in countries where we do business.

As part of BEPS 2.0, the OECD has focused on ensuring multinational businesses with consolidated global revenues in excess of 750 million euros pay their tax in the 'right place' (Pillar 1) and at least at a 'minimum rate' (Pillar 2), including ensuring that multinational enterprises are paying tax at an effective rate of 15% or higher in every jurisdiction in which they operate, regardless of the local headline tax rate or the impact of local tax reliefs.

In January 2026, the OECD released a “side-by-side” package introducing new safe harbors and providing an exemption for U.S.-based multinational companies from parts of the global minimum tax framework.

This guidance is intended to simplify compliance and is generally favorable to the Company;

it needs to be adopted by each country to be considered enacted for financial accounting purposes.

We may be subject to the Pillar Two requirements in the future should our global revenues exceed the Pillar Two thresholds.

While we do not currently expect Pillar Two to have a material impact on our effective tax rate, we are in the process of assessing and monitoring potential impacts and developments.

These and other developments or changes in federal or international tax laws, rules, practices or rates (including future changes or modifications to existing practices) could have an adverse material impact on our ability to utilize our deferred tax

attributes, our effective tax rate and results of operations including cash flows and financial position.

In addition, as of each reporting date, we evaluate the realizability of our deferred tax assets which may result in the recognition and/or release of a valuation allowance.

In addition, changes to U.S.

tax laws will significantly impact how U.S.

multinational corporations are taxed on U.S.

and foreign earnings.

On July 4, 2025, the enactment of the One Big Beautiful Bill Act (“OBBBA”) provides significant corporate tax reforms, including the permanent reinstatement of deducting domestic research and development expenditures, and modifying the Global Intangible Low-Taxed Income (“GILTI”) and Foreign-Derived Intangible Income (“FDII”) rules.

While we do not currently expect Pillar Two and OBBBA to have a material impact on our effective tax rate, we are in the process of assessing and monitoring potential impacts and developments.

In addition, as of each reporting date, we evaluate the realizability of our deferred tax assets which may result in the

recognition and/or release of a valuation allowance.

Any changes in the valuation allowance will have a direct impact on our effective tax rate.

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Our current debt facilities may contain certain restrictions, covenants and repurchase provisions that may limit our ability to raise the funds necessary to meet our working capital needs, which may include the cash conversion of the Notes or repurchase of the Notes for cash upon a fundamental change.

As of December 31, 2024, we had $26.5 million in principal amounts outstanding in 2025 Notes, $25.0 million in principal amounts outstanding in 2027 Notes, and $230.0 million in principal amounts outstanding in 2029 Notes (together, the “Notes”).

The 2025 Notes subsequently matured in January 2025 and were settled through the issuance of Company shares to the noteholders.

As of December 31, 2025, we had $230.0 million in principal amounts outstanding in 2029 Convertible Senior Notes (the “Notes”).

In addition, as of December 31, 2025, we had an undrawn senior secured revolving credit facility (the “Credit Facility”) in an aggregate principal amount of $250.0 million, including a $15.0 million letter of credit sublimit.

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Finally, holders of the Notes will have the right to require us to repurchase all or any portion of their Notes upon the occurrence of a fundamental change before the maturity date.

Additionally, in the event the conditional conversion features of the Notes are triggered (as is currently the case for the 2027 Notes through March 31, 2025), holders of Notes will be entitled to convert the Notes at any time during specified periods at their option.

Additionally, in the event the conditional conversion features of the Notes are triggered, holders of Notes will be entitled to convert the Notes at any time during specified periods at their option.

If one or more holders elect to convert the Notes, or if a fundamental change occurs before maturity, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the Notes being converted, which could adversely impact our liquidity.

Additionally, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of the Notes surrendered therefor or pay cash with respect to the Notes being converted.

In addition, even if holders do not elect to convert the Notes, we could be required under applicable accounting rules to reclassify all or a

portion of the outstanding principal of the Notes as a current rather than long-term liability, which could result in a material reduction of our net working capital.

In addition, even if holders do not elect to convert the Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Notes as a current rather than long-term liability, which could result in a material reduction of our net working capital.

Issuance of our common stock, if any, upon conversion of the Notes, as well as the capped call transactions and the hedging activities of the option counterparties, may impair or reduce our ability to utilize or our research and development credits carryforwards in the future.

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As a result, any conversion of the Notes that we elect to settle in shares may materially increase the risk that we could experience an ownership change for these purposes in the future.

The capped call transactions may affect the value of the 2027 Notes and our common stock.

With respect to the 2027 Notes, we have entered into capped call transactions with certain option counterparties.

The capped call transactions were expected generally to reduce the potential dilution upon conversion of the 2027 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2027 Notes, as the case may be, with such reduction and/or offset subject to a cap.

The option counterparties or their affiliates may enter into or modify hedge positions by entering into or unwinding various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the 2027 Notes (and are likely to do so during any observation period related to a conversion of the 2027 Notes).

This activity could also cause fluctuations in the market price of our common stock and the 2027 Notes, which could affect the ability of the noteholders to convert the 2027 Notes and, to the extent the activity occurs during any observation period related to a conversion of the 2027 Notes, it could affect the number of shares and value of the consideration that noteholders will receive upon conversion of the 2027 Notes.

Risks Related to the Merger with Axcelis Technologies, Inc.

The planned merger with Axcelis Technologies, Inc.

On September 30, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Axcelis Technologies, Inc., a Delaware corporation (“Axcelis”), and Victory Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Axcelis (“Merger Sub”).

Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub will merge with and into Veeco (the “Merger”), with Veeco surviving as a wholly-owned subsidiary of Axcelis.

See Note 17 “Merger” for additional information.

The Merger is currently expected to close during the second half of 2026, assuming that all of the conditions in the Merger Agreement are satisfied or waived.

The Merger Agreement provides that either we or Axcelis may terminate the Merger Agreement if the Merger has not occurred by September 30, 2026 (subject to automatic extensions until as late as June 30, 2027 under certain conditions with respect to the receipt of regulatory approvals).

Certain events may delay the completion of the Merger or result in a termination of the Merger Agreement.

Some of these events are outside the control of either party.

In particular, completion of the Merger requires the receipt of various government approvals.

If the Merger Agreement is terminated by Axcelis following a recommendation change of our board of directors, we will be required to pay a termination fee of $77,500,000 to Axcelis.

In addition, if the Merger Agreement is terminated by Axcelis due to our breach of the Merger Agreement that would result in a failure of an applicable closing condition (subject to the applicable cure period set forth in the Merger Agreement), then we will be required to pay a fixed expense reimbursement amount of $15,000,000.

We may incur significant additional costs in connection with any delay in completing the Merger or termination of the Merger Agreement, in addition to significant transaction costs, including legal, financial advisory, accounting and other costs we have already incurred.

We cannot provide any assurance that the conditions to the completion of the Merger will be satisfied or waived or that any adverse change, effect, event, circumstance, occurrence or state of facts that could give rise to the termination of the Merger Agreement will not occur, and we cannot provide any assurances as to whether or when the Merger will be completed on the terms or timeline set forth in the Merger Agreement or at all.

Failure to complete the Merger in a timely manner or at all could materially and adversely affect our stock price and future business and financial results.

We can provide no assurance that the Merger will occur or that the conditions to the Merger will be satisfied in a timely manner or at all.

Also, we can provide no assurance that an event, change or other circumstance that could give rise to the termination of the Merger Agreement will not occur.

Delays in completing the Merger or the failure to complete the Merger at all could materially and adversely affect our future business and financial results, and, in that event, the market price of our common stock may decline significantly, particularly to the extent that the current market price reflects a market assumption that the Merger will be completed.

If the Merger is delayed for any reason, we will be subject to several risks, including the diversion of management focus and resources from operational matters and other strategic opportunities while working to complete the Merger, any of which could materially and adversely affect our business, financial condition, results of operations, cash flows, and stock price.

The pendency of the Merger could materially and adversely affect our business and operations.

In connection with the pending Merger, some of our current or prospective customers, suppliers and other vendors, lenders or other business counterparties may delay or defer decisions concerning their business relationships or transactions with us, which could negatively impact our sales and revenue generation, margins, operating expenses, and profitability, regardless of whether the Merger is completed.

In addition, under the Merger Agreement, we are restricted from entering into certain corporate transactions and taking certain other specified actions, and requires that we conduct our business in all material respects in the ordinary course and consistent with past practice until the completion of the Merger or the termination of the Merger Agreement.

These restrictions, which could be in place for an extended period of time if the completion of the Merger is delayed, could prevent us from pursuing attractive business opportunities that may arise prior to completion of the Merger or from making appropriate changes to business or organizational structure.

This could in turn materially and adversely impact our business, financial condition and results of operations.

The pendency of the Merger may also make it more difficult for us to effectively recruit, retain and incentivize key personnel and may cause distractions from our strategy and day-to-day operations for our current employees and management.

Further, uncertainty about the effect of the Merger on our employees may have a material adverse effect on us during the pendency of the Merger, as this uncertainty may impair our ability to retain and motivate key personnel during the pendency of the Merger and the combined company’s ability to retain and motivate them following the Merger.

Employee retention may be particularly challenging as our employees may experience frustration during the integration process and uncertainty about their future roles following consummation of the Merger.

Because the consideration to be received by our stockholders in connection with the Merger will include a fixed number of shares of Axcelis common stock, and the market price of such shares has fluctuated and will continue to fluctuate, our stockholders cannot be sure of the value of the consideration they will receive in the Merger.

Under the Merger Agreement, at the effective time of the Merger, each share of Veeco common stock (other than each share of Veeco common stock held in treasury or held or owned by Veeco, Axcelis or Merger Sub immediately prior to the effective time of the Merger) issued and outstanding immediately prior to the effective time of the Merger will be cancelled and converted into the right to receive 0.3575 newly issued shares of Axcelis common stock.

The market value of the consideration our stockholders will receive in the Merger will therefore fluctuate with the market price of Axcelis common stock.

The implied value of the Merger Consideration has fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate until the date the Merger is completed, which could occur a considerable amount of time after the date hereof.

Prior to the completion of the Merger, the market price of Axcelis common stock, along with short selling activity in both our common stock and Axcelis common stock, has and is expected to continue to impact the market price of our common stock.

The value of the merger consideration to be received by our stockholders has fluctuated since the date of the announcement of the Merger Agreement and will continue to fluctuate until the Merger is completed and thereafter.

Accordingly, at the time of our special meeting, our stockholders will not know or be able to determine the market value of the consideration they would receive upon completion of the Merger.

Stock price changes may result from a variety of factors, including, among others, interest rates, general market, industry, economic and geopolitical conditions, including

the impact of continued inflation and associated changes in monetary policy, short-selling activity, changes in and speculation regarding our and Axcelis’ respective businesses, operations and prospects, market assessments of the likelihood that the Merger will be completed, the timing of the Merger and regulatory considerations.

Many of these factors are beyond our and Axcelis’ control.

Under Delaware law, our stockholders are not entitled to an appraisal of the fair value of their shares in connection with the Merger.

Under Delaware law, holders of our common stock are not entitled to an appraisal of the fair value of their shares in connection with the Merger.

Appraisal rights are statutory rights that enable stockholders to dissent from certain extraordinary transactions, such as certain mergers, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to stockholders in connection with the applicable transaction.

Under Delaware law, appraisal rights are not available for the shares of any class or series if the shares of the class or series are listed on a national securities exchange or held of record by more than 2,000 holders on the record date, unless the stockholders receive in exchange for their shares anything other than shares of stock of the surviving or resulting corporation or of any other corporation that is publicly listed or held by more than 2,000 holders of record, cash proceeds from the sale of fractional shares or fractional depositary receipts or any combination of the foregoing.

Our common stock is listed on the Nasdaq, and our stockholders will receive Axcelis common stock pursuant to the Merger Agreement and cash proceeds from the sale of fractional shares.

The market price of Axcelis common stock after the Merger may be affected by factors different from those affecting the market price of our common stock.

Upon completion of the Merger, holders of Veeco common stock will become holders of shares of Axcelis common stock.

Our business differs from that of Axcelis in important respects, and, accordingly, the results of operations of Axcelis after the Merger, as well as the market price of Axcelis common stock, may be affected by factors different from those currently affecting our results of operations.

Additionally, the market price of Axcelis common stock may fluctuate significantly following completion of the Merger.

Our current stockholders will have a reduced ownership interest and voting power in the combined company after the Merger.

Immediately following the Merger, our pre-Merger stockholders are expected to hold approximately 41.6% of the combined company’s common stock and the pre-Merger stockholders of Axcelis are expected to hold approximately 58.4% of the combined company’s common stock, in each case, calculated on a fully diluted basis.

Our stockholders and Axcelis’ stockholders currently have the right to vote for their respective directors and on certain other matters affecting their respective companies.

If and when the Merger occurs, each Veeco stockholder who receives shares of Axcelis common stock will become an Axcelis stockholder with a percentage ownership of Axcelis that will be smaller than the stockholder’s current percentage ownership of Veeco (without considering such stockholder’s current ownership of our common stock, if any).

Accordingly, our pre-Merger stockholders will have less voting power in us than they now have in Veeco and will be able to exercise less influence over the management and policies of the combined company following the consummation of the Merger than they are able to exercise over Veeco immediately prior to the consummation of the Merger.

An adverse judgment in a lawsuit challenging the Merger may prevent the Merger from becoming effective or from becoming effective within the expected timeframe.

Our stockholders may file lawsuits challenging the Merger or the other transactions contemplated by the Merger Agreement, which may name us and/or our board of directors as defendants.

We cannot provide any assurance as to the outcome of such lawsuits, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims.

One of the conditions to the completion of the Merger is that no injunction by any governmental entity of competent jurisdiction, such as a court, is in effect that prohibits, restrains or makes illegal the consummation of the Merger.

As such, if any future legal actions result in an

injunction prohibiting the consummation of the Merger, then such injunction may prevent the consummation of the Merger on the agreed terms, within the expected timeframe or at all, any of which could substantially harm our business.

Whether or not any plaintiff’s claim is successful, this type of litigation may result in significant costs and divert management’s attention and resources, which could materially and adversely affect the operation of our business.

We are expected to incur significant costs in connection with the Merger and integration of the two companies, which may be in excess of those anticipated by us.

We have incurred and expect to continue to incur costs associated with negotiating and completing the Merger and combining the operations of the two companies.

These costs have been, and will continue to be, substantial.

The substantial majority of costs will consist of transaction costs related to the Merger and include, among others, fees paid to financial, legal and accounting advisors, filing fees, and employee retention and other employment-related costs.

Many of these costs will be borne by us even if the Merger is not completed.

We will also incur transaction costs related to formulating and implementing integration plans, including facilities, systems and service contract consolidation costs and employment-related costs.

We will continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in connection with the Merger and the integration of the two companies’ businesses.

Although we expect that the elimination of duplicative costs, as well as the realization of other synergies related to the integration of the businesses, should allow the combined company to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

The costs described above, as well as other unanticipated costs and expenses, could materially and adversely affect the results of operations, financial condition and cash flows of the combined company following the completion of the Merger.

The Merger Agreement contains provisions that limit our ability to pursue alternatives to the Merger, which could discourage a potential competing acquiror from making an alternative transaction proposal for greater consideration that what Axcelis has agreed to pay in the Merger.

The Merger Agreement contains provisions that preclude our ability to pursue alternatives to the Merger and require us to refrain from soliciting, initiating or knowingly encouraging or knowingly inducing, or taking any other action intentionally designed to facilitate, any inquiries or the making of any competing proposals from third parties or to engage in discussions or negotiations with third parties regarding any competing proposals, subject to certain exceptions.

With respect to any unsolicited written, bona fide acquisition proposal that we receive, if it is deemed to be a superior proposal, Axcelis generally has an opportunity to offer to modify the terms of the Merger Agreement in response to such proposal before our board of directors may withdraw or modify its recommendation to stockholders in response to such acquisition proposal or terminate the Merger Agreement to enter into a definitive agreement with respect to such acquisition proposal.

Upon termination of the Merger Agreement under circumstances relating to a superior proposal, we may be required to pay a termination fee of $77,500,000 to Axcelis depending on the circumstances giving rise to the termination, which likely would discourage a potential third-party merger partner from making an alternative transaction proposal, even if it were prepared to pay consideration with a higher value than implied in the Merger, or cause such third-party to propose to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee.

Additionally, if the Merger Agreement is terminated and we determine to seek another business combination, we may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.

Directors and officers of Veeco may have interests in the Merger that may be different from, or in addition to, those of other our other stockholders, which could have influenced their decisions to support or approve the Merger.

Certain of our directors and officers have interests in the Merger that may differ from, or that are in addition to, their interests as our stockholders.

Miller, Ph.D., our Chief Executive Officer and a member of our board of directors, and certain other members of our board of directors, will continue as directors of the combined company after the consummation of the Merger, and will be eligible to be compensated as non-employee directors of the combined company.

In addition, Dr.

Miller, together with certain other Company officers, will be entitled to cash severance payments, certain health insurance coverage and the acceleration of outstanding equity awards in the event of an

involuntary termination in connection with a change of control of Veeco.

Our board of directors (except for one (1) independent director who serves on the boards of both Axcelis and Veeco and thus recused himself) were aware of these interests at the time they approved the Merger Agreement.

These interests may cause Dr.

Miller and certain of our directors and officers to view the Merger differently than you may view it as a stockholder.

General Risk Factors

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● actual or anticipated variations in our results of operations;

● issues associated with the performance of our products, or the performance of our internal systems such as our

customer relationship management (“CRM”) system or our enterprise resource planning (“ERP”) system;

● issues associated with the performance of our products, or the performance of our internal systems such as our customer relationship management (“CRM”) system or our enterprise resource planning (“ERP”) system;

● announcements of financial developments or technological innovations;

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Furthermore, some of our operations involve the storage, handling, and use of hazardous materials that may pose a risk of fire, explosion, or environmental release.

Such events could result from acts of terrorism, natural disasters, or operational failures and may result in injury or loss of life to

our employees and others, environmental contamination, and property damage.

Such events could result from acts of terrorism, natural disasters, or operational failures and may result in injury or loss of life to our employees and others, environmental contamination, and property damage.

These events may cause a temporary shutdown of an affected facility, or portion thereof, and we could be subject to penalties or claims as a result.

1 unchanged sentence

Our environmental, social and governance (“ESG”) goals and strategies could be costly to implement, and we are exposed to risks associated with failures to comply with evolving and varying sustainability-related requirements.

From time to time the Company communicates its strategies, commitments and targets relating to ESG matters, including initiatives pertaining to climate change, human rights, diversity and inclusion, among others.

From time to time the Company communicates its strategies, commitments and targets relating to ESG matters, including initiatives pertaining to climate change and human rights, among others.

These strategies, commitments and targets reflect our current plans and aspirations, and we may be unable to achieve them.

3 unchanged sentences

These expectations, standards and requirements may impact the manner in which we do business, our costs of doing business, our reputation, and the willingness of our stakeholders to engage with, invest in, or retain us.

We are also subject to various sustainability laws and regulations, such as the State of California’s new climate change disclosure rules, the European Union’s Corporate Sustainability Reporting Directive, and the U.S.

Securities and Exchange Commission’s rules on climate-related risks.

We are also subject to various sustainability laws and regulations, such as the State of California’s climate change disclosure rules, and the European Union’s Corporate Sustainability Reporting Directive.

Compliance with such laws and regulations, as well as increased scrutiny from regulators, could result in additional costs and expose us to new risks.

14 unchanged sentences

Despite these measures, an activist shareholder could undertake action to implement governance, strategic, or other changes to the Company which a holder of our common stock may not consider to be in the holder’s best interest.

Such activities could interfere with our ability to execute our strategic plans, be costly and time consuming, disrupt

our operations, and divert the attention of management and our employees.

Such activities could interfere with our ability to execute our strategic plans, be costly and time consuming, disrupt our operations, and divert the attention of management and our employees.

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-K

Item 1A. Risk Factors