Sandisk (SNDK) Financial History

Changes in tax laws in the United States, the European Union and around the globe have impacted and will continue to impact our effective worldwide tax rate, which may materially affect our financial position and resu…

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with the Company or its directors, officers or other employees.

Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jur…

These provisions are not intended to make us immune from takeovers.

These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or a change in our management and Board, and public stockholders who might desire to par…

Delaware law, our certificate of incorporation and our bylaws each contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably e…

Pursuant to agreements entered into in connection with our separation from WDC, WDC has agreed to indemnify us for certain liabilities, and we have agreed to assume, and indemnify WDC for, certain liabilities, as disc…

Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S.

Moreover, from time to time, we agree to indemnify certain of our suppliers and customers for alleged intellectual property infringement.

Litigation is subject to inherent risks and uncertainties that may cause actual results to differ materially from our expectations.

In addition to Sandisk’s commitment and actions to operate responsibly, there is demonstrated interest from customers, investors, business partners, associates, and other stakeholders regarding Sandisk’s assessment an…

Our aspirations, disclosures and actions related to sustainability and governance matters expose us to risks that could adversely affect our reputation and performance.

•the imposition of financial and other restrictive covenants on our operations and limitations on our ability to (i) declare or pay dividends or repurchase shares of our common stock; (ii) purchase assets, make invest…

•limitations on our ability to obtain additional financing for working capital, capital expenditures, acquisitions, capital contributions to Flash Ventures or other general corporate purposes; and

The variety and volume of products we manufacture are based in part on accurately forecasting market and customer demand for our products.

Additionally, new technologies could impact demand for our products in unforeseen or unexpected ways that could harm our business.

The markets for our products continuously undergo technology transitions that may impact our product roadmaps and that we must anticipate in order to adapt our existing products or develop new products effectively.

As we compete in new product areas, the overall complexity of our business may increase and may result in increases in research and development expenses and substantial investments in manufacturing capability, technol…

Further, our average selling prices and gross margins tend to decline when there is a meaningful shift in the mix of product sales to lower priced products.

We participate in a highly competitive industry that has been, and may continue to be, subject to declining average selling prices, volatile demand, rapid technological change and industry consolidation, as well as le…

our product prices, significant excess, obsolete inventory or inventory write-downs or underutilization charges, and the potential impairment of our investments in Flash Ventures.

In addition, the use of AI in the development of our products could potentially lead to ambiguities in intellectual property ownership, infringement or misappropriation risks, which could impact our competitive positi…

We are increasingly leveraging AI technologies, including generative AI applications and tools, to support and enhance our various operational processes.

Our increasing use of AI, including generative AI, agentic AI and AI-enabled automation technologies, may elevate the risk of cybersecurity incidents, whether through our authorized use of such technologies to perform…

Our standard warranty provisions attempt to put limits on damages and exclude liability for consequential damages and for misuse, improper installation, alteration, accident or mishandling while in the possession of s…

We provide warranties on the majority of our products for periods of one to five years.

We conduct our operations at large, high-volume, purpose-built facilities in Japan, Malaysia and other locations in Asia.

We do not have long-term contracts with some of our existing suppliers, nor do we always have guaranteed manufacturing capacity with many of our suppliers, so we cannot guarantee that they will devote sufficient resou…

We depend on an external supply base for technologies, software (including firmware), controllers, dynamic random-access memory (“DRAM”), components, equipment and materials for use in our product design and manufactu…

For example, there are pending and ongoing investigations initiated by the United States under Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 that may impact tariff rates for S…

•varying levels of protection of intellectual property rights;

•obtaining governmental approvals and compliance with evolving domestic and foreign regulations;

We are subject to risks and regulatory obligations associated with our global manufacturing operations and global sales efforts, as well as risks and regulatory obligations associated with our utilization of global su…

A large portion of our revenue is derived from our international operations, and substantially all of our products are produced overseas.

•We may be unable to implement, on a timely or cost-effective basis, the systems, internal controls, and governance structures necessary to operate effectively as an independent company.

•Our aspirations, disclosures and actions related to sustainability and governance matters expose us to risks that could adversely affect our reputation and performance.

•Product defects could subject us to costly warranty claims, litigation, indemnification claims or termination of long-term sales agreements.

The Delaware Exclusive Forum Provision is intended to apply to claims arising under Delaware state law and would not apply to claims brought pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange A…

A corporation may elect not to be governed by Section 203 of the DGCL.

For purposes of Section 203 of the DGCL, a “business combination” includes a merger, asset sale or other transaction resulting in a financial benefit to the interested stockholder, with an “interested stockholder” bei…

•on or after such date the business combination is approved by the board of directors of such corporation and authorized at an annual or special meeting of stockholders and not by written consent, by the affirmative v…

•upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation outstanding at the time…

•prior to such date, the board of directors of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

In addition, we are subject to Section 203 of the DGCL.

•our bylaws may be altered, amended or repealed, and new bylaws may be adopted, (i) by our board of directors, by vote of a majority of the number of directors then in office as directors, acting at any duly called an…

•our board of directors has the authority to determine designations and the powers, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, i…

•removal of directors either with or without cause, by the affirmative vote of the stockholders then entitled to vote at an election of directors having a majority of the voting power of the Company;

•provisions regarding the election of directors, classes of directors, the term of office of directors and the filling of director vacancies;

In addition, investors may have difficulty accurately valuing our common stock.

•the failure of securities analysts to cover our common stock;

•our business profile, market capitalization or capital allocation policies may not fit the investment objectives of pre-spin-off WDC stockholders, causing a shift in our investor base and our common stock may not be…

Additionally, we are in the process of transitioning to a new enterprise resource planning (“ERP”) system.

Changes in our personnel and systems in connection with the separation, including the allocation of key employees between us and WDC and the separation of key systems, has and may continue to result in loss of continu…

In connection with our spin-off from WDC, a number of contracts and licenses with third parties and other assets were to be transferred or assigned from (x) WDC or its affiliates to us or our subsidiaries or (y) us or…

Some contracts and other assets which needed to be transferred or assigned from WDC or its affiliates to us in connection with our spin-off from WDC required the consent of a third party.

These ownership interests could create actual, apparent or potential conflicts of interest when these individuals are faced with decisions that could have different implications for our company and WDC.

In addition, certain of our executive officers and directors, because of their current or former positions with WDC, own shares or equity awards of WDC.

There is an overlap between certain of our directors and directors of WDC.

Some of our officers and directors currently hold or previously held positions with WDC and may still hold equity in WDC, which may give rise to actual or potential conflicts of interest.

The distribution of our common stock was also subject to state corporate distribution statutes.

The spin-off could be challenged under various state and federal fraudulent conveyance laws.

The spin-off and related internal restructuring transactions may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.

We have agreed to assume, and indemnify WDC for, certain liabilities as discussed further in the section of this annual report on Form 10-K entitled “Related Party Transactions—Separation and Distribution Agreement an…

In connection with our spin-off from WDC, we have agreed to assume, and indemnify WDC for, certain liabilities.

In connection with our spin-off from WDC, WDC has agreed to indemnify us for certain liabilities.

If we do not have in place our own systems and services, and do not have agreements with other providers of these services when the transitional or other agreements terminate, or if we do not implement the new systems…

In connection with our spin-off, we entered into certain agreements with WDC, such as the separation and distribution agreement, a transition services agreement, a tax matters agreement, an employee matters agreement,…

WDC may fail to perform under various transaction agreements that were executed as part of the spin-off, or we may fail to have necessary systems and services in place when WDC is no longer obligated to provide servic…

•how we finance our working capital or other cash requirements may differ from how we financed those requirements as part of pre-spin-off WDC.

•we may need to make significant investments to replicate or outsource certain systems, infrastructure and functional expertise in the future.

We have and will continue to incur costs and expenses as a result of the spin-off.

We have incurred and expect to continue to incur ongoing material costs and expenses as a result of the spin-off.

We may not realize any strategic, financial, operational or other benefits from the spin-off.

We may not achieve some or all of the expected benefits of the spin-off, and the spin-off may adversely impact our business.

Further adverse changes to macroeconomic conditions, our operating or financial results, or our estimates of the fair value of our reporting unit could impact the amount of any impairment charges or lead to additional…

We regularly review our goodwill and property, plant and equipment for potential impairment.

Future material impairments in the value of our goodwill, intangible assets and other long-lived assets would negatively affect our operating results.

We may from time to time seek to further refinance our indebtedness by issuing additional shares of common stock, preferred stock or other securities that are convertible into common stock or grant the holder the righ…

Our financing arrangements include debt with interest rates consisting of a variable reference rate plus an applicable margin.

Our ability to meet our debt service obligations, comply with our debt covenants and deleverage will depend on our cash flows and financial performance, which may be affected by financial, business, economic and other…

•making us more vulnerable to economic downturns and limiting our ability to withstand competitive pressures or take advantage of new opportunities to grow our business.

•requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes;

In connection with the separation, we incurred debt financing in our capital structure, and in the future, we may incur additional debt.

Our level of debt may negatively impact our liquidity, restrict our operations and ability to respond to business opportunities and increase our vulnerability to adverse economic and industry conditions.

A significant portion of our sales is also made through retailers.

Our distribution customers typically sell to small computer manufacturers, dealers, systems integrators and other resellers.

Sales in the distribution channel and to the retail market are important to our business, and if we fail to respond to demand changes within these markets, or maintain and grow our applicable market share, our busines…

Sales of many of our products tend to be seasonal and subject to supply-demand cycles.

We experience sales seasonality and cyclicality, which could cause our operating results to fluctuate.

These challenges are further compounded by uncertainty surrounding our post-separation performance and evolving organizational structure, which may impact employee confidence and lead to increased attrition or operati…

Public health crises may negatively impact our workforce and operations, as well as those of our strategic partners, customers, suppliers and logistics providers.

Public health crises have had, and could in the future have, a negative effect on our business.

•the impacts of political and economic instability;

•We may be unable to effectively make the changes necessary to operate as an independent company.

•Failure to have received third party consent for contracts and other assets from the spin-off requiring such consent could adversely impact our financial condition and future results of operations.

•Overlapping officer roles and directorships with WDC may give rise to actual or potential conflicts of interest.

•The spin-off and related internal restructuring transactions may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws and legal dividend requirements.

•If we are required to make payments pursuant to our indemnities to WDC in connection with the spin-off, our financial results could be adversely impacted.

•WDC’s indemnification of us for certain liabilities in connection with the spin-off may not be sufficient to protect us against the full amount of such liabilities, or WDC may not be able to satisfy its indemnificati…

•WDC may fail to perform under various transaction agreements that were executed as part of the spin-off, or we may fail to have necessary systems and services in place when WDC is no longer obligated to provide servi…