5.07 Eleven wording slips in the risk factors, one of which reverses the meaning of a sentence
Company F · a US-listed networking equipment company · Drafting slip
In brief
In the cybersecurity risk factor, data could be '[wording masked]', which says the opposite of what is meant (accessed or processed in unauthorized manners); the slip was also in the prior-year Form 10-K. A sentence in the products cybersecurity risk factor has lost its opening clause, a cross-reference on p.42 quotes a risk-factor heading that does not exist in that form, and two headings and one tax sentence carry grammar slips. Five more slips were already in the prior-year Form 10-K and recur in this one: key components 'come from sole or limited sources of supply and increases the risk' (p.12), a full stop before 'which may result in reductions in overall demand' (p.18), a comma before 'will be sufficient' (p.24), 'time-intensive litigation' (p.34) and 'our board of director's' (p.43).
The evidence, as filed
Screenshot withheld to protect the company’s identity. Even with names, figures and dates boxed out, the wording on these pages could be searched back to the filer. Pages relied on: Form 10-K 2024 (prior year), page 38; Form 10-K 2024 (prior year), page 39; Form 10-K 2025, page 15; Form 10-K 2025, page 27; Form 10-K 2025, page 35; Form 10-K 2025, page 36; Form 10-K 2025, page 42.
What the filing shows, and what the rule requires
| What the filing shows | What the rule requires |
|---|---|
Printed page 36: '[wording masked]'. Printed page 35: 'customers; or are [wording masked]'. Printed page 42: cross-reference to 'Escalated or escalating U.S. tariffs, as well as countermeasures taken by affected countries may have a negative effect on global economic conditions'; the heading on p.15 reads '[wording masked]'. Printed page 27 heading: 'financial conditions'. Printed page 24 heading: 'Network Security Markets, to our existing customers'. Printed page 39: 'as a result thereof tax effects of nondeductible compensation'. | 'otherwise accessed, used, or processed in unauthorized manners'; 'If our products, services or internal networks, systems or data are or are [wording masked]' (the prior-year wording); the cross-reference quoting the heading as printed on page 15; 'financial condition'; 'to sell additional products and services to our existing customers in the [market], [market] and Network Security Markets'; 'as a result thereof; tax effects of nondeductible compensation'. |
| What we checked. Each Item 1A page image against the text, the prior-year Form 10-K wording of the same passages, and the heading cross-referenced on p.42 | |
Why it matters
A reader is told that data could be used 'in authorized manners', the opposite of the risk described, and cannot find the risk factor the cross-reference names; the other slips are cosmetic.
Exposure
No penalty; a drafting matter for the next Form 10-K.
Our workings
on p.36 the first item of the list of ways an incident could damage the business ends '[wording masked]'; the prior-year Form 10-K (p.39) has the same words.
on p.35 the sentence beginning 'For example, we could face attacks' continues '; or are [wording masked]', with no subject for 'are perceived'; the prior-year text (p.38) opened that clause 'If our products, services or internal networks, system or data are or are perceived to have been compromised'.
the cross-reference on p.42 quotes a heading that differs from the heading actually printed on page 15, so a reader searching for the quoted title will not find it.
the indemnification heading on p.27 says 'financial conditions', and the new-customers heading on p.24 places 'to our existing customers' after the market names, so the sentence reads awkwardly; both read the same in the prior-year Form 10-K.
the tax risk factor on p.39 runs two list items together.
none of these changes a figure or a required disclosure; they are presentation slips, but the first reverses the meaning of the sentence.
Management’s best defense, and our reply
The company would say these are proof-reading slips in long narrative text that no investor would read as changing the risk disclosed, and that the intended meaning of 'authorized manners' is obvious from the surrounding words about stolen or lost data. That is fair for the grammar slips, which is why they are drafting points only. However, the 'authorized manners' wording states the reverse of the risk and has now survived two annual reviews, and the cross-reference points to a heading that cannot be found, so both are worth correcting.
The fix
- Correct the six passages as set out in 'should be' and run a cross-reference check of every quoted risk-factor title against the headings.
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | the list item says 'assessed' and 'authorized' where 'accessed' and 'unauthorized' are meant | Document | Form 10-K 2025, page 36 |
| 2 | the prior-year Form 10-K had the same words | Document | Form 10-K 2024 (prior year), page 39 |
| 3 | the clause has lost its subject | Document | Form 10-K 2025, page 35 |
| 4 | the prior-year wording of the same clause | Document | Form 10-K 2024 (prior year), page 38 |
| 5 | the cross-reference quotes a risk-factor heading | Document | Form 10-K 2025, page 42 |
| 6 | the heading as actually printed differs from the cross-reference | Document | Form 10-K 2025, page 15 |
| 7 | heading reads 'financial conditions' | Document | Form 10-K 2025, page 27 |
| 8 | the market names are placed between the products and 'to our existing customers', so the heading reads awkwardly | Document | Form 10-K 2025, page 24 |
| 9 | two list items run together without a semicolon | Document | Form 10-K 2025, page 39 |
| 10 | Prior-year risk factor summary: plural subject 'components' with the singular verb 'increases' | Document | Form 10-K 2024 (prior year), page 14 |
| 11 | The same agreement slip is carried into the current risk factor summary | Document | Form 10-K 2025, page 12 |
| 12 | Prior-year revenue-growth risk factor: a full stop breaks the sentence before 'which' | Document | Form 10-K 2024 (prior year), page 19 |
| 13 | The same broken sentence recurs in the current risk factor | Document | Form 10-K 2025, page 18 |
| 14 | Prior-year capital risk factor: a comma separates the subject from its verb | Document | Form 10-K 2024 (prior year), page 26 |
| 15 | The same comma recurs in the current capital risk factor | Document | Form 10-K 2025, page 24 |
| 16 | The misplaced-comma heading already listed for the current year was in the prior-year Form 10-K too | Document | Form 10-K 2024 (prior year), page 26 |
| 17 | Prior-year indemnification heading has the same 'financial conditions' slip | Document | Form 10-K 2024 (prior year), page 29 |
| 18 | Prior-year third-party license risk factor: garbled clause '[wording masked]' | Document | Form 10-K 2024 (prior year), page 36 |
| 19 | The garbled clause recurs word for word in the current 10-K | Document | Form 10-K 2025, page 34 |
| 20 | Prior-year repurchase risk factor: misplaced apostrophe in 'board of director’s' | Document | Form 10-K 2024 (prior year), page 47 |
| 21 | The misplaced apostrophe recurs in the current 10-K | Document | Form 10-K 2025, page 43 |
Prepared by Pramanex from the company’s public SEC filings, without the company’s involvement, to show how a 10-K Pre-filing Check reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other attestation or assurance engagement, and not legal advice. An SEC-style question is a question, not a conclusion.
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