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abandon, adversely, attain, bank, beneficial, book, broader, CECL, clinical, CM, collectability, commencement, comparative, competing, confidence, conform, consumer, continued, create, created, customary, deducting, delay, Department, Deposit, deteriorate, deterioration, diminished, downturn, drew, duty, energy, environment, expanded, extended, extreme, FDIC, FIFO, foregoing, goodwill, half, high, highly, identification, impair, implicit, import, indemnification, inflation, inflationary, instability, institution, integration, internally, IRA, jointly, largely, law, leaving, letter, lieu, maintained, Manufacturer, modified, objective, OEM, operate, pandemic, past, Paycheck, payoff, prefunded, president, pressure, proprietary, ranged, realizable, recast, receivership, recently, recognizing, released, rely, renewal, renewed, rental, Republic, resulted, retained, revolving, schedule, scope, secure, short, Signature, Silicon, spare, stability, standard, structure, systemic, termination, trade, unpredictable, unstable, Valley, volatile, yield
Financial report summary
?Risks
- War, terrorism, other acts of violence, changing circumstances related to the COVID-19 Pandemic or potential effects of future pandemics, are unpredictable and could adversely affect our business operations and the market for our products.
- We generate a substantial portion of our revenue from the sale of our display products, and any significant reduction in sales of these products would materially harm our business.
- Our business is subject to seasonal fluctuations, which may cause our operating results to fluctuate from quarter-to-quarter and adversely affect our working capital and liquidity throughout the year.
- Our working capital requirements and cash flows are subject to fluctuation, which could have an adverse effect on our financial condition.
- We operate in a highly competitive industry.
- If we are unable to continually enhance our products and to develop, introduce and sell new technologies and products at competitive prices and in a timely manner, our business will be harmed.
- We may not be successful in our strategy to increase sales in the business and government market.
- As a result of market saturation, our future sales of interactive displays in developed markets may slow or decrease.
- We face significant challenges growing our sales in foreign markets.
- Our suppliers may not be able to always supply components or products to us on a timely basis and on favorable terms, and as a result, our dependency on third-party suppliers has adversely affected our revenue and may continue to do so.
- We rely on highly skilled personnel, and, if we are unable to attract, retain or motivate qualified personnel, we may not be able to operate our business effectively.
- We may have difficulty in entering into and maintaining strategic alliances with third parties.
- We use resellers and distributors to promote and sell our products.
- If our electronic data is compromised, our business could be significantly harmed.
- A failure to keep pace with developments in technology could impair our operations or competitive position.
- An information security incident, including a cybersecurity breach, could have a negative impact to the Company’s business or reputation.
- Decreases in, or stagnation of, spending or changes in the spending policies or budget priorities for government funding of schools, colleges, universities, other education providers or government agencies may have a material adverse effect on our revenue.
- If our products fail to comply with consumer product or environmental laws, it could materially affect our financial performance.
- We are subject to risks inherently related to our foreign operations.
- We must comply with the Foreign Corrupt Practices Act.
- Our worldwide operations will subject us to income taxation in many jurisdictions, and we must exercise significant judgment to determine our worldwide financial provision for income taxes. That determination ultimately is an estimate, and, accordingly, we cannot assure that our historical income tax provisions and accruals will be adequate.
- If we are unable to ship and transport components and final products efficiently and economically across long distances and borders, our business would be harmed.
- If our procedures to ensure compliance with export control laws are ineffective, our business could be harmed.
- We will be exposed to fluctuations in foreign currencies that may materially adversely affect our results of operations.
- Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and results of operations.
- Defects in our products can be difficult to detect before shipment. If defects occur, they could have a material adverse effect on our business.
- We may not be able to obtain patents or other intellectual property rights necessary to protect our proprietary technology and business.
- Our business may suffer if it is alleged or determined that our technology or another aspect of our business infringes the intellectual property of others.
- If we are unable to anticipate consumer preferences and successfully develop attractive products, we might not be able to maintain or increase our revenue or achieve profitability.
- We may be unable to keep pace with changes in technology as our business and market strategy evolves.
- We may not be able to maintain a listing of our Class A common stock on Nasdaq Capital Market, or Nasdaq.
- Future sales of our Class A common stock could adversely affect our share price, and any additional capital raised by us through the sale of equity or convertible debt securities may dilute your ownership in our securities and may adversely affect the market price of our Class A common stock.
- The market price of our Class A common stock may be volatile, which could cause the value of our common stock to fluctuate and possibly decline significantly.
- Our Articles of Incorporation, Bylaws and Nevada law may have anti-takeover effects.
- We have no intention of declaring dividends in the foreseeable future.
- If securities or industry analysts do not publish research or reports about us, or if they adversely change their recommendations regarding our Class A common stock, then our stock price and trading volume could decline.
- We may be exposed to risks relating to evaluations of controls required by Sarbanes-Oxley Act of 2002.
- If we fail to develop, implement and maintain an effective system of internal control over financial reporting, the accuracy and timing of our financial reporting in future periods may be adversely affected.
- Unstable market and economic conditions and potential disruptions in the credit markets may adversely affect our business, including the availability and cost of short-term funds for liquidity requirements and our ability to meet long-term commitments, which could adversely affect our results of operations, cash flows and financial condition.
Management Discussion
- Revenues. Total revenues for the year ended December 31, 2023 were $176.7 million as compared to $221.8 million for the year ended December 31, 2022, resulting in a 20.3% decrease. The decrease in revenues was primarily a result of softening world-wide demand for our products and solutions in both the U.S. and EMEA markets.
- Cost of Revenues. Cost of revenues for the year ended December 31, 2023 was $113.4 million as compared to $156.9 million for the year ended December 31, 2022, resulting in a 27.7% decrease. The decrease in cost of revenues was primarily due to more favorable material and shipping cost and the decrease in revenues.
- Gross Profit. Gross profit for the year ended December 31, 2023 was $63.3 million as compared to $64.9 million for the year ended December 31, 2022. Gross profit margin improved to 35.8% for the year ended December 31, 2023 compared to 29.2% for the year ended December 31, 2022 due to audio products comprising a greater percentage of total sales, which carry higher margins, and decreases in manufacturing and shipping cost.