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In the normal course of our business, we are involved in legal proceedings.
−Removed: In the past, we have litigated to enforce the terms of license agreements, to determine infringement or validity of intellectual property rights, and to defend ourselves or our customers against claims of infringement or breach of contract.
+Added: In the past, we have litigated to enforce the terms of license agreements, determine infringement or validity of intellectual property rights, and defend ourselves or our customers against claims of infringement or breach of contract.
We expect to continue to be involved in similar legal proceedings in the future.
Although considerable uncertainty exists, our management does not anticipate that the ultimate disposition of these matters will have a material adverse effect on our results of operations, consolidated financial position or liquidity.
−Removed: However, the ultimate liabilities could be material to our results of operations in the period recognized.
+Added: However, the ultimate disposition, costs, or liabilities could be material to our results of operations in the period recognized.
Ri sk Factors
−Removed: of our Registration Statement on Form 10 that was declared effective by the Securities and Exchange Commission on September 19, 2022 contains risk factors identified by us, which are incorporated by reference into this Item 1A of Form 10-Q.
−Removed: Except as noted below and the completion of the Spin-Off on October 1, 2022, there have been no material changes to the risk factors we previously disclosed in the Form 10.
−Removed: Our operations could also be affected by additional factors that are not presently known to us or by factors that we currently consider immaterial to our business.
−Removed: We recorded a significant goodwill impairment charge in the third quarter of 2022.
−Removed: If we continue to experience impairment in goodwill and other intangible assets, we may be required to record significant charges to earnings in the future.
−Removed: In addition to internal development, we intend to acquire additional businesses, technology and intellectual property through strategic relationships and transactions.
−Removed: We believe these strategic relationships and transactions will enhance the competitiveness and size of our current business and provide diversification into markets and technologies that complement our current business.
−Removed: Future transactions could be in the form of asset purchases, equity investments, or business combinations.
−Removed: As a result, we may have significant goodwill from such transactions and other intangible assets which are amortized over their estimated useful lives.
−Removed: We review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable or the useful life is shorter than originally estimated.
−Removed: Factors that may be considered a change in circumstances indicating that the carrying value of our amortizable or other intangible assets may not be recoverable include a decline in future cash flows, fluctuations in market capitalization, slower growth rates in our industry or slower than anticipated adoption of our products by our customers.
−Removed: During the three months ended September 30, 2022, indicators of potential impairment for the Product reporting unit of Xperi Holding were identified such that we concluded it was more-likely-than-not that goodwill was impaired and a quantitative interim goodwill impairment assessment should be performed as of September 30, 2022.
−Removed: Indicators of potential impairment included a sustained decline in Xperi Holding’s stock price during the second half of the third quarter of 2022 reflective of rising interest rates and continued decline in macroeconomic conditions.
−Removed: We proceeded to perform a fair value analysis of the Product reporting unit using the market capitalization approach.
−Removed: Under this approach, we estimated the fair value of the Product reporting unit as of September 30, 2022 using quoted market prices of Xperi’s common stock over its first ten trading days following the Separation, and a control premium representing the synergies a market participant would achieve upon obtaining control of Xperi.
−Removed: As a result of the fair value analysis, we recognized a goodwill impairment charge of $354.0 million during the third quarter of 2022.
−Removed: As we continue to review for factors that may affect our business which may not be in our control, we may be required to record a significant charge to earnings in our financial statements during the period in which any impairment of goodwill and other intangible assets or equity investments is determined, resulting in an adverse impact on our business, financial conditions and results of operation s .
+Added: There were no material changes to the risk factors previously disclosed in Part 1, Item 1A.
+Added: of our Annual Report on Form 10-K for the year ended December 31, 2022, which is incorporated by reference herein.
Unregistered Sales of Equity Securities and Use of Proceeds
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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.