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Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, filed with the SEC on May 29, 2024., except as set forth below.
Changes in government administrative policy, including changes to existing trade agreements and government sanctions, including the recently enacted tariffs on trade between the U.S. and Canada, could have a material adverse effect on us.
As a result of changes to government administrative policy, there may be changes to existing trade agreements, greater restrictions on free trade generally, significant increases in tariffs on goods imported into the U.S., Canada or the European Union, particularly tariffs on products manufactured in China, Canada and Mexico, among other possible changes. Changes in social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently manufacture and sell products, and any resulting negative sentiments towards U.S. companies as a result of such changes, could have an adverse effect on our business, financial condition, results of operations and cash flows. In February 2025, the United States adopted tariffs of as high as 25% on imports from Canada and Mexico and an additional 10% tariff on imports from China. In response, Canada enacted certain retaliatory tariffs as high as 25% on imports from the United States, with further tariffs proposed. While the United States and Canada have delayed implementation of certain of these tariffs, such tariffs, if continued, could have a significant adverse impact on our financial condition and results of operations. Based on our manufacturing practices and locations, there can be no assurance that any future executive or legislative action in the United States or other countries relating to trade regulation would not adversely affect our business, operations and financial results.