Company: CRCT
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001828962-25-000075
Chunk: 17

Company: Cricut, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part II, Item 1A
Chunk 17
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 ability to procure these semiconductors. Further, the U.S. government has introduced various regulatory changes to its export controls regime since 2022 that have significantly affected the semiconductor manufacturing and semiconductor manufacturing equipment industries. Continued deterioration in trade relations or adverse developments in political, social or economic conditions in or affecting China or future unforeseen problems, including health pandemics or regulatory changes, could affect deliveries of our products to our retail partners or users, possibly resulting in business interruptions, substantially delayed or lost sales, loss of inventory or increased expenses that cannot be passed on to brick-and-mortar and online retail partners or users, any of which could ultimately have a material adverse effect on our business and financial results. In such an eventuality, we could be forced to relocate certain of our manufacturing, either temporarily or permanently, to another potentially costlier location or find alternative potentially costlier methods of shipping our finished products to brick-and-mortar and online retail partners and users. If any of our China-based suppliers for any of our components are unable to supply the components that our manufacturers need to meet anticipated consumer demand, our business would be materially and adversely affected. 

Recent 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.

A predominant portion of the products we sell is originally manufactured in countries other than the United States. Recent or further changes in U.S. laws that result in increased tariffs or other trade restrictions could adversely affect our business, including disruption in and cost increases for sourcing our merchandise and increased uncertainties in planning our sourcing strategies and forecasting our margins. Importing and exporting has involved more risk since the beginning of 2018, as there has been increasing rhetoric, in some cases coupled with legislative or executive action, from several political leaders regarding the imposition of additional or escalated tariffs affecting foreign imports of certain materials. For example, beginning in 2018, the U.S. Trade Representative (the “USTR”) enacted additional tariffs affecting the import of many Chinese products affecting items, with a combined import value of approximately $550 billion. The applicable tariffs on some of these products has increased since these tariffs were originally imposed. More recently, the U.S. government also has begun to impose significant and increasingly large tariffs on a broader range of products imported from China and other countries.  In addition, the U.S. Department of Commerce has recently initiated Section 232 investigations into