AXON ENTERPRISE, INC. (AXON) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that AXON ENTERPRISE, INC. surfaced in its latest filing.

• The U.S. government has imposed or indicated intent to impose increased tariffs on foreign imports, particularly from the PRC, Mexico, and Canada.
• The TASER 10 CED is regulated by the ATF under the National Firearms Act, Gun Control Act, and Firearms Owners’ Protection Act.
• The AI Act in the European Union imposes compliance requirements on AI uses by law enforcement and developers, including the company.
• We have successfully remediated the previously identified material weakness related to our convertible debt arrangement as of June 30, 2025.2025-06-30
• We have not yet remediated the previously identified material weakness related to revenue recognition as of December 31, 2025.2025-12-31
• Latest government shutdown occurred in 2025, causing funding disruptions for federal agencies.2025
• In March 2025 we agreed with counterparties to leave the 2027 Note Hedge transactions outstanding until the original maturity of the 2027 Notes for the portion exchanged in March 2025.2025-03
• We unwound a portion of the Note Hedge and Warrant transactions corresponding to the 2027 Notes exchanged in December 2025.2025-12
• The 2027 Note Hedge and Warrant transactions remain partially outstanding despite the 2027 Notes being extinguished.
• The revolving credit facility requires us to maintain specified financial ratios and satisfy other financial condition tests.
• Following certain change of control events, we would be required to offer to repurchase the 2030 Notes and 2033 Notes.
• A change of control event would constitute an event of default under our revolving credit facility.
• Currently subject to a number of lawsuits alleging wrongful death, personal injury, negligent design, defective product, product performance issues, or inadequate warnings or training.
• Recently issued executive orders direct review of major defense acquisition programs more than 15% behind schedule or over budget, potentially leading to full or partial cancellation of programs in which we provide products and/or services.
• Recommendations from the OECD for a global minimum income tax are being implemented or considered in jurisdictions where we operate.
• We have undergone a revision and restatement of previously issued consolidated financial statements: revision to correct errors related to principal vs. agent accounting under ASC 606, and restatement to correct an error related to the classification of the 2027 Notes between current and long-term liabilities.