Risk Factors Update Summary

• Sales and marketing expenses decreased by $5 million, or 2.8%, in fiscal 2024 compared to fiscal 2023, primarily due to a decrease of $6 million in salaries and benefits and a decrease of $4 million in marketing and advertising costs.
• Research and development expenses decreased by $21 million, or 10%, from $198 million to $178 million.
• The Company issued $200 million of 3.00% senior convertible unsecured notes and repaid $150 million of 1.75% extendible debentures.
• Introduced "Insider Participation Limits," limiting the issuance of shares to insiders, affecting equity distribution.
• Future success depends on growth in markets for endpoint security software and embedded solutions. Recent growth trends are crucial.
• Introduced the concept of "RSU Account" and "RSU Vesting Conditions," impacting how RSUs are managed.
• Cash and cash equivalents decreased from $295 million to $175 million.
• Purchaser solely responsible for payment of any filing fee until the participant incurs a "separation from service." This change shifts financial responsibility to the Purchaser.
• Net income decreased by $200 million, from $639 million to $439 million.
• Short-term investments decreased from $131 million to $62 million.
• Payments made in settlement of RSUs exempt from compliance with Section 409A if settled within 15 days of the third month following the end of the participant's first taxable year. This change might impact tax liabilities for participants.
• Licensing the Company's solutions represents a significant strategic decision for many customers, leading to long and unpredictable sales cycles.
• Recoverable Compensation defined as compensation exceeding what should have been granted based on Restatement or Misconduct. This change introduces a mechanism to recover excess compensation.
• The Company recorded a reversal of compensation expense of approximately $2 million related to deferred share units.
• Adjusted net income increased by $10 million, from $19 million to $29 million.
• General and administrative expenses increased by $17 million, or 10%, in fiscal 2024 compared to fiscal 2023, primarily due to an increase of $27 million in restructuring costs.
• Sales and marketing expenses decreased by $45 million, or 13%, from $340 million to $295 million.
• The number of RSUs granted under the Award will expire on December 31, 201_.
• Added definitions for "Option Agreement," "Option Period," "Participating ETA," and "Assigned Assets." These additions clarify key terms.
• Defined "Vesting Date," "Vesting Period," and "Vested," crucial for understanding the timing and conditions of awards.
• The Company presented the dilutive effect of the 2020 Debentures using the if-converted method, eliminating fair value adjustments, and interest expenses incurred on the Debentures. This change might result in a more accurate representation of diluted earnings per share.
• Expanded on the definition of "Person" to include various legal entities, providing clarity.
• In the event of a Change of Control, all RSUs granted will immediately Vest.
• Participants seeking an injunction related to Section 409A compliance no longer required to provide a bond. This change reduces financial burden on participants seeking injunctions.
• Accounts receivable increased from $120 million to $199 million.
• Adjusted general and administrative expenses decreased by $11 million, or 7.9%, to $128 million in fiscal 2024 compared to $139 million in fiscal 2023, primarily due to a benefit of $17 million related to the release of an accrued liability.
• The Company's ability to restructure or refinance its 1.75% Debentures maturing on February 15, 2029, is critical for financial stability.
• The Company had 1.6 million deferred share units outstanding as at February 29, 2024, compared to 1.6 million as at February 28, 2023.
• Clawback policy introduced for Covered Individuals, allowing recovery of compensation in case of Restatement or Misconduct. This change enhances accountability and risk management.
• Added "RSU Accounts" and "RSU Vesting Conditions," impacting how RSUs are credited and vested.
• General and administrative expenses decreased by $50 million, or 36%, from $139 million to $89 million.
• Cash, cash equivalents, and investments decreased by $283 million, from $487 million to $298 million.
• The Company recognized $170 million in cash from the completed Malikie Transaction, with additional fixed and variable considerations. This change might significantly impact the Company's revenue and cash flow in the future.
• Unvested RSUs will immediately Vest upon the death of the participant.
• Board granted authority to make determinations and enforce the clawback policy. This change centralizes decision-making and enforcement processes.
• Adjusted sales and marketing expenses decreased by $6 million, or 3.5%, to $165 million in fiscal 2024 compared to $171 million in fiscal 2023, primarily due to the same reasons described above on a U.S. GAAP basis, excluding the increase in stock-based compensation expense.
• Other receivables increased from $12 million to $21 million.
• The Company entered into lease obligations totaling $13 million and recognized a corresponding ROU asset of $13 million, incurring losses of $4 million on LLA impairment of ROU assets. This change might affect the Company's financial position and profitability.
• Amortization expenses decreased by $42 million, or 23%, from $182 million to $140 million.
• Included provisions for "Termination Date" and "Vested Termination Payment," affecting employee benefits post-employment.
• Working capital decreased by $138 million, from $646 million to $508 million.
• Each party responsible for its own fees and expenses incurred in connection with the agreement. This change clarifies financial responsibilities between parties.
• The Company disaggregated revenue from contracts with customers by region, with North America contributing 65.2%, Europe, Middle East, and Africa 20.2%, and Other regions 14%. This change might indicate a shift in revenue sources and geographic focus.
• Long-term investments increased from $34 million to $36 million.
• Goodwill impairment charge decreased by $210 million, from $245 million to $35 million.
• Adjusted amortization expense increased by $2 million to $16 million in fiscal 2024 compared to $14 million in fiscal 2023, due to an increase in patent amortization expense included in operating expenses.
• Accounts receivable, net of allowance, increased by $61 million, from $18 million to $79 million.
• The Company disclosed changes in its segment information, restating fiscal 2021 data to conform to the current presentation, impacting segment revenue, cost of sales, and gross margin. This change might affect how investors evaluate the performance of different business segments.
• Operating expenses increased by $47 million, or 1%, in the fourth quarter of fiscal 2024 compared to the third quarter of fiscal 2024, primarily due to the Fiscal 2023 Goodwill Impairment Charge of $245 million.
• Goodwill decreased from $844 million to $595 million.
• LLA impairment charge decreased by $220 million, from $235 million to $15 million.
• Long-term investments increased by $2 million, from $34 million to $36 million.
• Adjusted operating expenses decreased by $19 million, or 4.2%, to $113 million in the fourth quarter of fiscal 2024 compared to $118 million in the fourth quarter of fiscal 2023, primarily due to a decrease of $8 million in amortization expense.
• Deferred revenue increased from $175 million to $194 million.
• The Company disclosed changes in its equity incentive plan, including the grant of options and restricted share units to attract, retain, and motivate employees. This change might impact employee retention and motivation strategies.
• Litigation settlement amount remained the same at $165 million.
• The Company disclosed changes in its patent sale agreement with Malikie, including fixed and variable considerations, impacting future royalty revenues. This change might influence the Company's intellectual property strategy and revenue streams.