Risk Factors Update Summary

• Expanded into new markets, including microphones and cameras, for content creators, with plans for more. This diversification may lead to increased revenue streams.
• Heightened cybersecurity risks due to remote work increase susceptibility to cyber-attacks. This introduces potential security breaches and increased expenses.
• Increased international sales to 54.6% in 2023 from 52.3% in 2022. This growth in international sales poses currency exchange rate risks.
• Potential legal risks and complexities arise from evolving international data privacy legislation in various jurisdictions.
• Total Net Leverage Ratio decreased from 3.25 to 1.00 in 2023. This reduction in leverage ratio indicates improved financial health.
• Uncertainty regarding international data transfers continues, impacting data flow and legal compliance.
• Research and development expenses increased to $66.5 million in 2023 from $60.3 million in 2022. This investment in R&D may drive innovation and competitiveness.
• Changes in privacy laws on cookies and tracking technologies may lead to alterations in business practices.
• Sales to Amazon accounted for 30.7% in 2023, up from 26.0% in 2022. This increased reliance on Amazon may pose concentration risk.
• Financial distress or bankruptcy of distributors may lead to oversupply and reduced demand for products.
• Net revenue from sales outside the U.S. decreased to 54.6% in 2023 from 61.7% in 2022. This shift may indicate changing market dynamics.
• Manufacturing facilities in China and Taiwan subject the company to regulatory risks and potential costs.
• Failure to predict low demand could result in excess inventory, impacting financials. Proper inventory management is crucial.
• Future sales of common stock may impact trading prices and shareholder interests.