Everpure (P) risk factors, FY2026 10-K

Risks Related to Our Business and Industry

1. 01Our business, operating results, and cash flows may be adversely impacted by uncertain macroeconomic conditions, and the uncertain geopolitical environment81% rewritten
2. 02We rely on a limited number of suppliers, and in some cases single-source suppliers, and any disruption or termination of our supply arrangements could delay shipments of our products and could harm our relationships with current and prospective customers
3. 03Adverse changes to tariffs, trade agreements, and trade policies may have a negative effect on our business and results of operations38% rewritten
4. 04Our sales cycles can be long, unpredictable and expensive, making it difficult for us to predict future sales
5. 05Our business may be harmed by trends in the overall data storage market
6. 06We are devoting significant resources toward developing flash storage solutions for hyperscalers, but there can be no assurance that our efforts will lead to meaningful revenue, operating margin or cash flow, or additional hyperscaler design winsNew
7. 07The evolving market for data storage and data management products makes it difficult to forecast demand for our Everpure Platform23% rewritten
8. 08We face intense competition from established companies and others
9. 09Many of our competitors have long-standing relationships with key decision makers at current and prospective customers, which may inhibit our ability to compete
10. 10We rely on contract manufacturers to manufacture our products, and if we fail to manage our relationships with our contract manufacturers successfully, our business could be negatively impacted
11. 11If we fail to successfully maintain or grow our relationships with partners, our business, operating results and financial condition could be harmed
12. 12Our brand name and business may be harmed by our competitors’ marketing strategies
13. 13Sales to governments are subject to a number of challenges and risks that may adversely impact our business

Risks Related to Our Platform

1. 14If we fail to develop and introduce new or enhanced storage offerings successfully, our ability to attract and retain customers could be harmed22% rewritten
2. 15If we fail to execute our transition to subscription offerings successfully, our revenues and results of operation may be harmed
3. 16Our Everpure Platform is highly technical and may contain defects or bugs, which could cause data unavailability, loss, breach or corruption that might, in turn, result in liability and harm to our reputation and business
4. 17If we are unable to ensure that our Everpure Platform interoperates with third party operating systems, software applications and hardware, we may lose or fail to increase our market share28% rewritten
5. 18Our Everpure Platform must conform to industry standards in order to be accepted by customers
6. 19Our ability to successfully market and sell our Everpure Platform depends in part on ease of use and the quality of our customer experience, and any failure to offer high-quality technical services and support could harm our business26% rewritten

Risks Related to Our Operating Results or Financial Condition

1. 20Our gross margins are impacted by a variety of factors and vary from period to period, making them difficult to predict with certainty42% rewritten
2. 21We intend to continue focusing on revenue growth and increasing our market penetration and international presence by investing in our business, which may put pressure on near-term profitability
3. 22Our operating results may fluctuate significantly, which could make our future results difficult to predict and could cause our operating results to fall below expectations
4. 23The sales prices of our offerings may fluctuate or decline, which may adversely affect our gross margins and operating results31% rewritten
5. 24We have experienced growth in prior periods, and we may not be able to sustain future growth effectively or at all
6. 25If we are unable to sell renewals of our subscription services to our customers, our future revenue and operating results will be harmed
7. 26Sales from our subscription and consumption offerings as a percentage of our total sales are difficult to predict, and we expect they will fluctuate over time, which will impact our product and total revenue growth
8. 27We may require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all
9. 28We are exposed to the credit risk of some of our customers, which could harm our business, operating results and financial condition

Risks Related to Our Operations

1. 29If we are unable to attract, motivate and retain sales, engineering and other key personnel, including our management team, we may not be able to increase our revenue and our business, operating results and financial condition could be harmed25% rewritten
2. 30If we fail to adequately expand and optimize our sales force, our growth will be impeded
3. 31Our company culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture, and our business may be harmed
4. 32Our long-term success depends, in part, on sales outside of the United States, which subjects us to costs and risks associated with international operations
5. 33Our international operations, as well as tax law changes, could expose us to potentially adverse tax consequences70% rewritten
6. 34On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the United States; while certain provisions reduced our current tax expense, future interpretations or changes in guidance could materially affect our cash tax obligations, deferred tax positions, and effective tax rate over timeNew
7. 35Third-party claims that we infringe their intellectual property rights could be costly and harm our business
8. 36The success of our business depends in part on our ability to protect and enforce our intellectual property rights
9. 37Our use of open source software could impose limitations on our ability to commercialize our Everpure Platform
10. 38Failure to comply with governmental laws and regulations could harm our business
11. 39Governmental regulations affecting the import or export of products could negatively affect our revenue
12. 40We may acquire other businesses which could require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our operating results

Risks Related to Our Credit Facility

1. 41Restrictive covenants in the agreement governing our revolving credit facility may restrict our ability to pursue business strategies64% rewritten

Risks Related to Our Common Stock

1. 42The trading price of our common stock has been and may continue to be volatile, and an active, liquid, and orderly market for our common stock may not be sustained
2. 43We cannot guarantee that our share repurchase program will enhance shareholder value, and share repurchases could affect the price of our common stock26% rewritten
3. 44If securities analysts do not publish research or reports about our business, or if they downgrade our stock, our stock price could decline
4. 45We have never paid dividends on our common stock and we do not anticipate paying any cash dividends in the foreseeable future
5. 46Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and under Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the price of our common stock
6. 47Our business is subject to the risks of earthquakes, fires, floods and other natural catastrophic events, and to interruption by man-made factors such as war, computer viruses or terrorism or by the impact of public health epidemics or pandemics