Company: CRCT
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001828962-25-000075
Chunk: 2

Company: Cricut, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 3
Chunk 2
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 subject to numerous risks and uncertainties, as described below. The principal factors and uncertainties that make investing in our Class A common stock risky include, among others:

•risks regarding our ability to attract and engage with our users, including anticipating their product preferences;

•competitive risks in both of our segments: Platform and Products;

•supply chain, manufacturing, distribution and fulfillment risks, including our being dependent on three contract manufacturers to produce connected machines, and on limited sources of supply for components, accessories and materials, as well as our ability to forecast demand and manage our inventory;

•international risks, including regulation, tariffs that have materially increased, and may continue to increase, our costs and the potential for further trade barriers;

•sales and marketing risks, including our dependence on sales to brick-and-mortar and online retail partners and our need to continue to grow online sales;

•risks relating to the complexity of our business, which includes connected machines, custom tools, hundreds of materials, design apps, e-commerce software, subscriptions, content, international production, direct sales, and retail distribution, particularly for a company of our relative size;

•risks related to product quality, safety and warranty claims and returns;

•risks related to protection of our intellectual property, as well as to cybersecurity and potential security breaches and incidents; 

•risks related to general socio-economic and political conditions as well as consumer confidence; and

•risks related to our dependence on our Chief Executive Officer.

We may be affected by recent and possible future political, social and economic conditions in China.

One of the contract manufacturers that produces our connected machines is wholly-owned by a Chinese parent company, and many of the components that go into the manufacturing of our products, including our 

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accessories and materials, are sourced from third-party suppliers in China. Our business therefore could be affected by social, political, regulatory or economic developments in China. For example, since 2018, the U.S. has imposed additional tariffs on many imports into the U.S. of Chinese-origin goods, including communications equipment products and components manufactured in and imported from China and China has also imposed tariffs on imports into China from the United States. (See also our risk factor “Recent and additional changes in U.S. taxes, tariffs, trade restrictions, or other trade policies affecting products produced in other countries, or similar recent or additional retaliatory changes by U.S. trading partners in response to these measures, could adversely affect our business.”) In addition, due to concerns with the security of products