What changed in this filing

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Item 1A. Risk Factors

2024-02-15 compared with 2023-02-16 · 41 added, 42 removed, 349 unchanged (19% of the section changed)

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The Company is vulnerable to the potential difficulties associated with the increase in the complexity of our business .

We have grown rapidly over the last several years both organically and through acquisitions.

This growth has caused increased complexities in the business.

We have expanded operations and customer offerings over the last several years both organically and through acquisitions.

This has caused increased complexities in the business.

We believe our future success depends in part on our ability to manage our growth and increased complexities of our business.

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• Managing stakeholder interests including customer, investor and employee social responsibility matters;

• Maintaining and improving information technology infrastructure to support growth;

• Maintaining and improving information technology infrastructure to support growth and to manage cyber security threats;

• Managing the integration of acquisitions;

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• Managing our international operations;

• Managing the cost of labor including any union organizing efforts and our responses to such efforts;

• Attracting, developing and retaining individuals with the requisite technical expertise to develop new technologies and introduce new products and solutions.

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• Future acquisitions could result in changes such as potentially dilutive issuances of equity securities and the incurrence of debt and contingent liabilities.

The Company may not be able to continue to develop products or solutions to address user needs effectively in an industry characterized by ongoing change.

The Company may not be able to continue to develop products or solutions to address user needs effectively.

To be successful, we must adapt to rapidly changing technological and application needs by continually improving our products and solutions, as well as introducing new products, solutions, and services, to address user demands.

The Company’s industry is characterized by:

The Company’s industry is impacted by:

• Evolving industry standards;

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production and assembly operations for our products.

Risks associated with operations, sales, and purchases outside the United States include:

Risks associated with operations, sales, and purchases include:

• Fluctuating foreign currency rates could restrict sales, increase costs of purchasing, and affect collection of receivables outside of the U.S.;

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Bribery Act, could result in large fines and penalties;

• Geopolitical turmoil, including popular uprisings, regional conflicts, terrorism and war could limit or prohibit our ability to transfer certain technologies, to sell our products and solutions, and could result in additional closure of facilities in sanctioned countries (e.g., the ongoing military conflicts between Russia and Ukraine and Israel and Hamas, and changes in China-Taiwan and U.S.-China relations);

• Adverse changes in, or uncertainty of, local business laws or practices, including the following:

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• Restrictions on the export or import of technology may reduce or eliminate the ability to sell in, or purchase from, certain markets;

• Political and economic instability may reduce demand for our products or put our assets at risk;

• Political and economic instability and uncertainty may reduce demand for our products or put our assets at risk;

• Limited intellectual property protection in certain countries may limit recourse against infringement on our products or may cause us to refrain from selling in certain geographic territories;

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• Transportation delays and customs related delays may affect production and distribution of our products;

• Geopolitical uncertainty or turmoil could negatively affect our operations or those of our customers or suppliers;

• Difficulty in effectively managing and overseeing operations that are distant and remote from corporate headquarters;

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We are dependent on third-parties’ continued development of operating systems, software application ecosystem infrastructures, and such third-parties’ approval of our implementations of their operating systems and associated applications.

If such parties cease to continue development or support of such operating systems or restrict our access to such operating systems, we would be required to change our strategy

for such devices.

If such parties cease to continue development or support of such operating systems or restrict our access to such operating systems, we would be required to change our strategy for such devices.

Our financial results could be negatively impacted by a resulting shift away from the operating systems we currently use and the associated applications ecosystem could be costly and difficult.

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Some aspects of our business and services also rely on technologies, software, and content developed by or licensed from third parties, and we may not be able to maintain our relationships with such third parties or enter into similar relationships in the future on reasonable terms or at all.

Emerging issues related to the development and use of artificial intelligence (“AI”) could give rise to legal or regulatory action, damage our reputation or otherwise materially harm our business.

Our development and use of AI technology in our products and operations remains in the early phases.

While we aim to develop and use AI responsibly and attempt to mitigate ethical and legal issues presented by its use, we may ultimately be unsuccessful in identifying or resolving issues before they arise.

AI technologies are complex and rapidly evolving and the technologies that we develop or use may ultimately be flawed.

Moreover, AI technology is subject to rapidly evolving domestic and international laws and regulations, which could impose significant costs and obligations on the company.

For example, in 2023 the Biden Administration issued a new, executive order on safe, secure and trustworthy AI and the EU introduced the AI Act to establish rules for providers and users.

Emerging regulations may pertain to data privacy, data protection, and the ethical use of AI, as well as clarifying intellectual property considerations.

Our use of AI could give rise to legal or regulatory action, increased scrutiny or liability, damage our reputation, or otherwise materially harm our business.

Cybersecurity incidents could disrupt business operations.

New technologies and systems being installed with the intent of advancing capabilities and processing efficiencies may introduce new risks which could outpace the organization's ability to properly identify, assess and address such risks.

Further, new business models that rely heavily on global digitization, use of the cloud, big data, mobile and social media expose the organization to even more cyber-attacks.

We rely on information technology systems throughout the Company to keep financial records, process orders, manage inventory, coordinate shipments to distributors and customers, maintain confidential and proprietary information, and other technical activities, and operate other critical functions such as internet connectivity, network communications, and email.

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While we continue to perform security due diligence, there is always the possibility of a significant breach.

In addition, any failure on the part of one of our contract manufacturers, distributors or

resellers to maintain the security of its systems or data, including via the penetration of their network security or ransomware, could result in business disruption to us and damage to our reputation.

Any threats or security breaches to our systems may negatively impact our customers.

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We have been subject to product liability claims, and may continue to be subject to such claims, including claims for property or economic damages or personal injury, where damages arose, and may continue to arise, from our products as a result of actual or apparent design or manufacturing defects.

In addition, such design or manufacturing defects may occur not only in our own

designed products, but also in components provided by third-party suppliers.

In addition, such design or manufacturing defects may occur not only in our own designed products, but also in components provided by third-party suppliers.

We seek to limit such risk through insurance protection as well as product design, manufacturing quality control processes, product testing and contractual indemnification from suppliers.

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The consequences of a natural disaster or widespread public health issue may have a material adverse effect on our business and results of operations.

The effects of the COVID-19 pandemic have and may continue to adversely affect our business, financial results, and results of operations.

The coronavirus (“COVID-19”) pandemic has been, and continues to be, complex and rapidly evolving, and has impacted our business, with prior impacts primarily related to supply chain disruption (including higher fulfillment costs and component shortages) and labor constraints.

The duration and extent of the impact of the COVID-19 pandemic on our business, operations and financial results depends on factors that cannot be accurately predicted at this time, such as the severity and transmission rate of COVID-19, the emergence of new variants of the virus, the length of the pandemic, and the impact of these and other factors on our stakeholders.

federal, state, and local governments as well as non-U.S.

governments, to varying degrees, have imposed, and may again impose, several protocols and regulations restricting activities of individuals in an effort to limit the spread of COVID-19.

Over the course of the pandemic we have implemented a number of measures in an effort to protect the health and well-being of our employees, customers and suppliers, including having the majority of office workers work remotely during the height of the pandemic and gradually returning to offices as restrictions are lifted, limiting employee travel where appropriate, and implementing more strenuous health and safety measures for hosting and attending in-person industry events.

We continue to allow our employees to come back to work in our offices in a controlled approach, with modified business practices and increased health and safety protocols, consistent with government regulations and guidelines.

However, there is no guarantee that such protocols will be successful in preventing the spread of COVID-19 amongst our employees, and even as employees return to our offices, we may be prevented from conducting business activities at full capacity for an indefinite period of time.

The extent and duration of future workplace restrictions and limitations, particularly in sites with significant headcount, could adversely impact our operations and our ability to execute on strategic imperatives for our business.

The potential negative

effects to our operations, including reductions in production levels, research and development activities, and increased efforts to mitigate the impact of COVID-19, may adversely affect our ability to deliver our products, solutions and services.

Further, the conditions caused by COVID-19 have affected, and may continue to affect, the overall demand environment for our products, solutions and services.

The level of demand for certain product components has resulted in, and may continue to result in, lengthened lead times and higher input costs, including freight.

This has impacted, and may continue to impact, our ability to meet customer demand as well as profitability.

An inability to meet customer demand may also adversely affect our customers’ ability or willingness to purchase our products, solutions or services.

Additionally, our financial results may be adversely impacted by challenges in the macroeconomic environment, including market inflation, as a result of global supply chain shortages.

If COVID-19 or its variants become more prevalent in the locations where our customers, suppliers, or we conduct business, we may experience more pronounced disruptions in our operations.

If we are not able to respond to and manage the impact of such events effectively, our business and results of operations in future periods may be adversely affected.

Moreover, the impacts of the COVID-19 pandemic may exacerbate other pre-existing risks, such as global economic conditions, political, regulatory, social, financial, operational and cybersecurity as well as similar risks relating to our suppliers and customers, any of which could have a material adverse effect on our business.

Global health crises, such as the COVID-19 pandemic, have had an impact on our supply chain and could have a material impact on our global operations, our customers and our vendors, which could adversely impact our business results and financial condition.

Global health crises could have a material impact on our global operations, our employees, our customers and our vendors, which could adversely impact our business results and financial conditions.

For example, the continued evolution of COVID-19 and its variants, as well as periodic spikes in infection rates, local outbreaks on our sites or supplier, customer or vendor sites, in spite of safety measures or vaccinations, could cause disruptions to our operations or those of our suppliers, customers or vendors.

Pandemic conditions could lead to global supply chain challenges, which could adversely impact our ability to procure certain components and could impact our ability to manufacture products and cause delays in delivery of our products and/or solutions to our customers.

As new variants of viruses appear, especially variants that are more easily spread, cause more serious outcomes, or are resistant to existing vaccines, new health orders and safety protocols could further impact our on-site operations and our ability to manufacture, ship or deliver products and solutions to customers.

These factors could materially and negatively impact our business results, operations, revenue, growth and overall financial condition.

We are exposed to risks under large, multi-year system and solutions and services contracts that may negatively impact our business.

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Further, we have from time-to-time, and in certain instances will continue to, transition our outsourced operations to new service providers and/or to different geographies.

Such transition activities between new or existing outsource partners or across different geographies, as well as insourcing activities, could

result in additional cost, time and management attention in order to effectively manage the transition, which could negatively impact our financial results.

Such transition activities between new or existing outsource partners or across different geographies, as well as insourcing activities, could result in additional cost, time and management attention in order to effectively manage the transition, which could negatively impact our financial results.

Failure of our suppliers, subcontractors, distributors, resellers, and representatives to use acceptable legal or ethical business practices could negatively impact our business.

It is our policy to require suppliers, subcontractors, distributors, resellers, and third-party sales representatives (“TPSRs”) to operate in compliance with applicable laws, rules, and regulations, including those regarding working conditions, employment practices, environmental compliance, anti-corruption, and trademark and copyright licensing.

It is our policy to require suppliers, subcontractors, distributors, resellers, and

third-party sales representatives (“TPSRs”) to operate in compliance with applicable laws, rules, and regulations, including those regarding working conditions, employment practices, environmental compliance, anti-corruption, and trademark and copyright licensing.

However, we do not control their labor and other business practices.

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Any changes to our channel program may cause some of our third-party dealers, distributors, or resellers to exit the program due to modifications to the program structure, which may reduce our ability to bring products and solutions to market and could have a negative impact on our results of operations.

Third-party dealers, distributors or resellers could also face additional costs or credit concerns resulting from an uncertain economic environment that would cause such parties to reduce purchases of our products, thereby causing a negative impact on our financial results.

Some of these third-parties are smaller and more likely to be impacted by a significant decrease in available credit that could result from a weakness in the financial markets.

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We source some of our components from sole source suppliers.

Any disruption to our suppliers or significant increase in the price of supplies, inclusive of transportation costs, could have a negative impact on our results of operations.

Any disruption to our suppliers or significant increase in the price of supplies, inclusive of transportation costs, or change in customer demand could have a negative impact on our results of operations.

Our ability to meet customers’ demands depends, in part, on our ability to obtain in a timely manner an adequate delivery of quality materials, parts, and components, as well as services and software from our suppliers, and our ability to deliver products, services and software to our customers.

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At times we have and may continue to execute multi-year purchase commitments with suppliers that contain minimum spend thresholds, which we are obligated to fulfill even if customer demand declines, and may require that we purchase inventory that exceeds our forecasted demand.

In addition, volatility in customer demand, product availability, and costs to transport products, may result in increased operating input costs.

In addition, volatility in customer demand, product availability, and costs to transport products, may result in increased operating input costs, elevated inventory levels, as well as inventory-related losses.

Also, credit constraints at our suppliers could cause us to accelerate payment of accounts payable by us, impacting our cash flow.

In addition, our current contracts with certain suppliers may be canceled or not extended by such suppliers and, therefore, not afford us with sufficient protection against a reduction or interruption in supplies.

Moreover, in the event any of these suppliers breach their contracts with us, our legal remedies associated with such a breach may be insufficient to compensate us for any damages it may suffer.

Moreover, in the event any of these suppliers

breach their contracts with us, our legal remedies associated with such a breach may be insufficient to compensate us for any damages it may suffer.

Financial and Market Risks

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Economic conditions and financial market disruptions may adversely affect our business and results of operations .

Adverse economic conditions or reduced information technology spending may negatively impact our business.

General disruption of financial markets and a related general economic downturn could adversely affect our business and financial condition through a reduction in demand for our products, solutions or services by our customers.

Adverse economic conditions or reduced and/or changes in the timing and amount of information technology spending may negatively impact our business.

General disruption of financial markets and a related general economic downturn or uncertainty could adversely affect our business and financial condition through a reduction in demand for our products, solutions or services by our customers.

If a slowdown were severe enough, it could require further impairment testing and write-downs of goodwill and other intangible assets.

Cost reduction actions may be necessary and might lead to restructuring charges.

A tightening of financial credit could adversely affect our customers, suppliers, outsourced manufacturers, and channel partners (e.g., distributors and resellers) from obtaining adequate credit for the financing of significant purchases.

Cost reduction actions have been and may be necessary in the future resulting in restructuring charges as well as changes in staffing levels which may strain our resources.

A tightening of financial credit or increase in the cost of borrowing could adversely affect our customers, suppliers, outsourced manufacturers, and channel partners (e.g., distributors and resellers) from obtaining adequate credit for the financing of significant purchases.

An economic downturn could also result in a decrease in or cancellation of orders for our products, solutions and services;

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Such ESG matters may also impact our suppliers and customers, which may compound or cause new impacts on our business, financial condition or results of operations.

Unresolved Staff Comments

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