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Reference is made to the Risk Factors set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our risk factors as previously reported in our Annual Report on Form 10-K for the year ended December 31, 2025, except as set forth below.
We will hold a minority equity interest in Quarterhill Inc. as partial consideration from the sale of our Tolling business, which subjects us to risks relating to the value and liquidity of such interest, foreign currency exposure, and the performance of a business over which we have no control.
In connection with the sale of our Tolling business to Quarterhill Inc. ("Quarterhill"), we will receive, in addition to $70 million in cash, a number of common shares of Quarterhill equal to seven percent (7%) of the issued and outstanding shares of Quarterhill, calculated as of immediately prior to the closing, along with registration rights and board observer rights. Quarterhill's common shares are listed on the Toronto Stock Exchange (the "TSX") under the symbol "QTRH" and on the OTCQX Best Market under the symbol "QTRHF." The market price of Quarterhill's common shares may be volatile and could decline significantly after the closing due to factors unrelated to Quarterhill's operating performance, including general economic and market conditions, industry trends, analyst coverage, investor sentiment, and trading volumes, which would reduce the value of the consideration we ultimately realize from the transaction and could result in significant fair value losses that increase the volatility of our reported earnings. Our ability to monetize the equity interest may be limited by the trading volume in Quarterhill's common shares, contractual lock-up or standstill restrictions, applicable U.S. and Canadian securities laws, and volume limitations under available resale exemptions, and sales of a significant number of shares, or the perception that such sales could occur, could itself depress the prevailing market price. Because Quarterhill's shares trade on the TSX in Canadian dollars, the U.S. dollar value of our equity interest will also be subject to fluctuations in exchange rates, which we may not hedge. Our equity interest represents a minority position that does not provide us with the ability to direct or control Quarterhill's business strategy, operations, capital allocation, or governance, including with respect to the integration and operation of our former Tolling business. There can be no assurance that Quarterhill will successfully integrate the Tolling business, achieve expected synergies, maintain key customer relationships, or generate the financial performance necessary to support or increase the value of its common shares, and a deterioration in Quarterhill's business, competitive position, or financial condition could materially reduce the value of our equity interest or render it worthless.