Airgain (AIRG) risk factors, FY2025 10-K

Other

1. 01Summary of Risks Related to our Business31% rewritten
2. 02Our CMs purchase some components, subassemblies and products from a single or limited number of suppliers. The loss of any of these suppliers may substantially disrupt our ability to obtain orders and fulfill sales as we design in and qualify new components54% rewritten

Risks Related to Our Business and Industry

1. 03The markets for our wireless systems solutions and components are developing and may not develop as we expect
2. 04Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations or our guidance22% rewritten
3. 05will fluctuate in the future. Prior to 2025, our net losses were $8.7 million, $12.4 million and $8.7 million for the years ended December 31, 2024, 2023 and 2022, respectively
4. 06facility shutdowns related to local holidays in China and southeast Asia, affecting how customers make purchasing decisions
5. 07If we are unable to manage our growth and expand our operations successfully, our business and operating results will be harmed, and our reputation may be damaged
6. 08Our transition to integrated system solutions increases business complexity and execution riskNew
7. 09Our wireless connectivity solutions and components are subject to intense competition, including competition from our suppliers and the customers to whom we sell43% rewritten
8. 10failure to increase, or the loss of, market share, any of which would likely seriously harm our business, operating results or financial conditionNew
9. 11New entrants and the introduction of other distribution models in our markets may harm our competitive position
10. 12Our future success depends on our ability to develop new products and successfully introduce new and enhanced products and services for the wireless market that meet the needs of our customers33% rewritten
11. 13could be adversely impacted, or customers could switch to competitor solutions, which would have an adverse impact on our operating resultsNew
12. 14Any delays in our sales cycles could result in customers canceling purchases of our products36% rewritten
13. 15customers of integrated wireless solutions require successful field trials before committing to purchase our solutions, which could delay the customer decision making process37% rewritten
14. 16We have a history of losses, and we may not be profitable in the future
15. 17A limited number of customers and devices represent a significant portion of our sales. If we were to lose any of these customers or devices, our sales could decrease significantly
16. 18We sell to customers who are price conscious
17. 19We rely significantly on channel partners to sell and support our products, and the failure of this channel to be effective could materially reduce our sales
18. 20We rely on a limited number of CMs and ODMS to produce and ship our products, and the failure to manage our relationships with these parties successfully could adversely affect our ability to market and sell our products
19. 21deliver finished products at agreed-upon prices
20. 22protect Airgain’s confidential information
21. 23We may experience delays in obtaining products from manufacturers and may not be a high priority for our manufacturers38% rewritten
22. 24political unrest, or military conflict in regions where manufacturers are located; and potential conflicts involving other countriesNew
23. 25We are developing a number of our new products and wireless connectivity solutions in partnership with other companies. If any of these companies were to fail to perform, or our partnerships were to be unsuccessful, we may not be able to bring our solutions to market successfully or on a timely basis
24. 26Our business may suffer if our strategic alliances are not successful
25. 27Emerging satellite-to-device connectivity technologies may reduce demand for certain terrestrial wireless solutions or require significant engineering investment to address hybrid connectivity requirementsNew
26. 28Defects in our products or poor design and engineering services could result in lost sales and subject us to substantial liability
27. 29The loss of key personnel or an inability to attract, retain and motivate qualified personnel may impair our ability to expand our business
28. 30Our inability to raise additional capital on acceptable terms in the future may limit our ability to develop and commercialize new solutions and technologies and expand our operations78% rewritten
29. 31addition, the Sales Agreement may be terminated by us or the Agent at any time upon specified notice to the other party, or by the Agent at any time in certain circumstances, including the occurrence of a material adverse changeNew
30. 32If we raise additional capital through credit facilities or debt financing, the terms of any new debt could further restrict our ability to operate our business
31. 33We are subject to the risk that third-party consultants will not perform their tasks effectively and that we will be unsuccessful in operating our business as a result
32. 34Our acquisitions expose us to risks that could adversely affect our business and adversely affect our operating results, financial condition, and cash flows
33. 35Our ability to use our net operating loss carryforwards and other tax attributes may be limited90% rewritten
34. 36Compliance with environmental matters and worker health and safety laws could be costly, and noncompliance with these laws could have a material adverse effect on our operating results, expenses and financial condition
35. 37Our business and prospects depend on the strength of our market efforts and our brand. Failure to maintain and enhance our brand would harm our ability to maintain and expand our base of customers
36. 38Our financial condition and results of operations could be adversely affected by the outbreak of contagious diseases, including pandemics and epidemics44% rewritten

Risks Relating to Intellectual Property

1. 39If we are unable to protect our intellectual property rights, our competitive position could be harmed, or we could be required to incur significant expenses to enforce our rights35% rewritten
2. 40Claims by others that we infringe on their intellectual property rights could harm our business31% rewritten
3. 41We are generally obligated to indemnify our channel partners and end-customers for certain expenses and liabilities resulting from intellectual property infringement claims regarding our products, which could force us to incur substantial costs47% rewritten

Risks Related to Data Privacy

1. 42Because we collect, process, use and store information about individuals, including our customers and our own employees, this creates data privacy compliance risks that could result in additional cost and liability to us68% rewritten

Risks Related to Our International Operations

1. 43We are subject to risks associated with international geopolitical and military conflicts
2. 44Our international sales and operations subject us to additional risks that can adversely affect our operating results and financial condition69% rewritten
3. 45Changes to United States tax, tariff, Department of Defense’s Section 1260H List, and import/export regulations may have a negative effect on global economic conditions, financial markets and our business25% rewritten
4. 46organizations, such as Underwriters Laboratories, for commercial acceptance. We and our end-customers must also comply with similar international regulations and standardsNew
5. 47We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws

Risks Related to Our Common Stock

1. 48The price of our common stock may be volatile
2. 49other events or factors, including those resulting from outbreaks of contagious disease, inflation and interest rate changes, financial institution instability, wars, political unrest, regional tensions, and global and regional, terrorism or other geopolitical events
3. 50If securities or industry analysts issue an adverse opinion regarding our stock, our stock price and trading volume could decline
4. 51Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management and limit the market price of our common stock
5. 52provide that vacancies on our board of directors may, except as otherwise required by law, be filled only by a majority of directors then in office, even if less than a quorum
6. 53We have never paid cash dividends on our common stock, and we do not anticipate paying cash dividends in the foreseeable future
7. 54We are a “smaller reporting company,” and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our stock less attractive to investors and may make it more difficult to compare our performance with other public companies
8. 55We incur significant costs as a result of operating as a public company, and our management is required to devote substantial time to comply with the laws and regulations affecting public companies, particularly after we are no longer a smaller reporting company or a non-accelerated filer
9. 56Litigation or legal proceedings could expose us to significant liabilities and damage our reputation
10. 57A failure in our information technology systems could negatively impact our business
11. 58Our business is subject to the risks of earthquakes, fire, floods, and other natural catastrophic events
12. 59Changes in tax law may materially adversely affect our financial condition, results of operations, and cash flows
13. 60Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk