Vislink Technologies (VISL) risk factors, FY2024 10-K

Risks Related to the Company and Our Business

1. 01We have incurred losses in the past and may be unable to achieve or sustain profitability in the future
2. 02We may require additional capital to fund our operations, develop new products, and expand. If we do not obtain additional financing, our business prospects, financial condition, and results of operations will be adversely affected
3. 03Our global operations expose us to risks associated with public health crises or pandemic outbreaks. These crises or outbreaks could disrupt our operations and materially and adversely affect the results of our operations and financial condition
4. 04Our industry is highly competitive, and we may need to compete more effectively
5. 05Defects or errors in our products and services or products made by our suppliers could harm our brand and relations with our customers and expose us to liability. If we experience product recalls, we may incur significant expenses and experience decreased demand for our products
6. 06Future impairment charges could have a material adverse effect on our financial condition and the results of operations
7. 07Although our products may not cause users technical issues, our business and reputation may be harmed if users perceive our solutions to cause a slow or unreliable network connection or a high-profile network failure
8. 08Our ability to sell our products will be highly dependent on the quality of our support and service offerings, and our failure to offer high-quality support and services would adversely affect our sales and operating results
9. 09We are subject to increasing operating costs and inflation risks, which may adversely affect our performance
10. 10We may need to recruit and retain qualified personnel, which may affect our business, financial condition, results of operations, and prospects
11. 11We rely on key executive officers, and their knowledge of our business and technical expertise would be difficult to replace
12. 12We purchase some components, subassemblies, and products from a limited number of suppliers. The loss of these suppliers may substantially disrupt our ability to obtain orders and fulfill sales as we design and qualify new components
13. 13The imposition of tariffs could adversely affect our business and financial results
14. 14We do not have long-term contracts with our existing contract manufacturers. The loss of any of our current contract manufacturers could adversely affect our business, operating results, and financial condition
15. 15Our intellectual property protections may be insufficient to safeguard our technology adequately
16. 16We may be subject to claims of intellectual property infringement or invalidity. Expenses incurred for monitoring, protecting, and defending our intellectual property rights could adversely affect our business
17. 17Enforcement of our intellectual property rights abroad, particularly in China, is limited, and it is often difficult to protect and enforce such rights
18. 18The intellectual property rights of others may prevent us from developing new products or entering new markets
19. 19We may be subject to infringement claims in the future
20. 20We rely on the availability of third-party licenses. If these licenses are available only on less favorable terms or not in the future, our business and operating results will be harmed
21. 21We expect to base our inventory purchasing decisions on our forecasts of customers’ demand, and if our projections are inaccurate, our operating results could be materially harmed
22. 22Our success depends on our ability to design, develop, and market new products and enhancements that meet evolving customer needs. Our technology must perform as intended and achieve market acceptance to maintain our competitive position, revenue, and customer relationships
23. 23We rely extensively on information technology systems and could face cybersecurity risks
24. 24Our industry is subject to rapid technological change, and to compete successfully, we must make substantial investments in new products, services, and technologies
25. 25At several of our annual stockholder meetings, including our 2019 Annual Meeting of Stockholders, we failed to obtain ratification by our stockholders of specific proposals submitted for approval of our stockholders at prior annual meetings, which could be deemed defective corporate acts
26. 26Demand for our defense-related products and products for emergency response services depends on government spending
27. 27The procurement process for government entities is more challenging than that for private sector contracts. It requires compliance with complex laws and regulations related to contract formation, administration, performance, and pricing at the federal, state, and local levels
28. 28Unstable market and economic conditions may seriously affect our business, financial condition, and share price
29. 29Our failure to comply with complex U.S. and foreign laws and regulations could adversely affect our operations
30. 30Various cost-cutting measures we have implemented and may implement in the future could unintentionally impact our business, financial condition, and results of operations

Risks Related to Our Industry and its Regulatory Context

1. 31Regulation of the telecommunications industry could harm our operating results and prospects
2. 32Compliance with environmental, health, and safety laws and regulations, including new rules requiring higher standards, may increase costs, limit our ability to utilize supply chains and force product design changes
3. 33Governmental regulations affecting the import or export of products or affecting products containing encryption capabilities could negatively impact our revenues
4. 34If wireless devices pose safety risks, we may be subject to new regulations, and demand for our products, licensees, and customers may decrease
5. 35The current U.S. presidential administration has undertaken significant efforts to cut federal government spending, which could negatively impact our business and results of operations

Risks Related to Our Common Stock

1. 36We recently transferred the trading of our common stock from The Nasdaq Stock Market to the OTCQB. Because our common stock is quoted on the OTC, your ability to sell your shares in the secondary trading market may be limited
2. 37We are subject to penny stock rules which will make the shares of our common stock more difficult to sell
3. 38FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock
4. 39Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and reduce our common stock’s market price
5. 40These provisions may discourage takeover attempts, reduce the appeal of our common stock to investors, and result in a lower market price for our shares than might otherwise occur
6. 41Our stock price may be volatile, and you may not be able to resell shares of our common stock at or above the price you paid
7. 42We may face various risks associated with shareholder activism or demands for better performance
8. 43If securities analysts do not publish research or reports about our business or if they downgrade our common stock or our sector, our common stock price and its trading volume could decline
9. 44In the future, we could elect to deregister our securities under the Securities Exchange Act of 1934, as amended. Deregistration would result in less disclosure about us and may negatively affect our securities’ liquidity and trading prices
10. 45We may fail to meet publicly announced financial guidance or other expectations about our business, which would cause our common stock to decline in value
11. 46The requirements of being a U.S. public company may strain our resources and divert management’s attention
12. 47If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they adversely change their recommendations regarding our common stock, our share price and trading volume could decline
13. 48Any impairment of goodwill, other intangible assets, or long-lived assets could negatively impact our operations
14. 49If our estimates relating to our critical accounting policies are based on assumptions or judgments that change or prove incorrect, our operating results could fall below the expectations of securities analysts and investors, resulting in a decline in our stock price

Risks Relating to Acquisitions

1. 50Our business strategy may include acquisitions, which may entail numerous risks, including management diversion and increased costs and expenses, all of which could negatively affect the Company’s profitability
2. 51Our acquisition strategy involves several risks