ATNI

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How ATNI rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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We are highly dependent on our information technology (“IT”) systems for the operation of our network, our facilities, workforce management, delivery of services to our customers and the compilation of our financial results.
These attacks may target data specific to our business, seek to encrypt and demand a ransom, and/or seek access to the data from market participants in other industries.
Disruptions in our networks and the unavailability of our services or our inability to efficiently and effectively complete necessary technology or systems upgrades, or conversions could lead to a loss of customers, damage to our reputation and violation of the terms of our licenses and contracts with customers or applicable law.
We may be required to expend significant resources to protect our networks and may need to expend additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures arising from operational and security risks.
Additionally, the techniques and sophistication used to conduct cyber-attacks and breaches of information technology systems change frequently and increase in complexity and are often not recognized until such attacks are launched or have been in place for a period of time.
For example, as AI continues to evolve, cyber-attackers could also use AI to develop or hone their attacks.
These failures could also lead to significant negative publicity and reputational harm, and we may be subject to litigation, regulatory penalties and financial losses.
Such events have in the past and in the future may materially disrupt and adversely affect our business operations.
Network outages could have a material adverse effect on our business and can be caused by a myriad of incidents, including aging or faulty infrastructure, natural disasters, cyber-attacks, and third-party outages, such as power loss or subsea cable outage.
Due to the rural and island locations of our networks, our energy costs tend to be high, and where we have not removed all of our legacy copper network, on average, can be higher than those of our competitors operating in the same markets.
We may not be able to adequately fund the maintenance and replacement of this infrastructure on a basis timely enough to avoid material outages, decrease our rising energy costs, accurately predict equipment failure rates, or be able to locate replacement parts or spares to repair existing equipment due to its age.
Any network outage as a result of our aging infrastructure or unreliable energy grid could negatively impact our operations, including the provision of service to our customers, and could result in adverse effects to our financial condition and reputation.
We are reliant on government funding that could change as a result of changes to governmental policies and programs.
In the western US, we receive government awards to both enable our expanded carrier service initiative and grow the footprint of our network.
We receive federal and state universal service revenues to support our wireline operations in high-cost areas in Alaska, the US Virgin Islands, and the western US.
We receive US government funding and awards from numerous other sources, including E-rate, EACAM, RHC Program, Tribal Broadband Connectivity, CAF II, RDOF, and state funding, and are also a participant in the FCC’s Replace and Remove Program.
Administrative and operational expertise is required to meet the growing number of government award programs that we have been awarded, and in particular, to work through the backlog of government environmental and real estate permitting needed to build, expand or alter fiber or tower facilities in rural jurisdictions.
The US federal government shutdown in 2025, as well as the decrease in federal workers to process easement and other necessary permitting, continues to have impacts on the operations of our Company with respect to backlog in permitting that accumulated during the shutdown.
Further, there is a risk that the FCC may continue to enumerate requirements, change stated rules, or delay or withhold funding.
Geopolitical instability and US military presence in the Caribbean may impact our operations.
A substantial part of our operations is located in the Caribbean, and we have undersea cable connectivity and corporate functions in several jurisdictions, including Trinidad and Tobago.
The US military has been increasing its presence in the Caribbean recently, including a buildup of naval forces in the area and the January 3, 2026 large-scale strike in Venezuela.
There are a number of potential business and operational impacts in the event that military activity escalates, such as physical damage to our telecommunications and subsea infrastructure, impairment to critical infrastructure and facilities (like power), workforce disruptions, changes to customer base and competitive markets, and inability to travel, as well as macroeconomic risks like currency fluctuation, oil and gas prices and general market instability.
Any further geopolitical volatility, including the threat of or actual military action, may adversely impact our operations and financial results.
Additionally, we do not currently maintain “key person” life insurance on any of our key employees, and none of the executive officers at our parent company have executed employment agreements requiring a specified period of service.
We rely on a limited number of key suppliers and vendors and if our relationships with them are interrupted it could adversely impact our business.
If these suppliers experience interruptions, price increases due to tariffs, or higher inflation, or other problems delivering equipment to us on a timely and cost-effective basis, our subscriber or revenue growth and operating results could suffer significantly.
A large portion of our equipment is sourced, directly or indirectly, from outside the US, which carries additional risks and regulatory obligations.
In addition, major changes in tax policy or trade relations, such as the disallowance of tax deductions for imported products or the imposition of new or increased tariffs, reciprocal tariffs, or duties on imported products imposed or that may be imposed, could also adversely affect our business, results of operations, effective income tax rate, liquidity and net income.
Additionally, in some instances, we compete against companies that have greater financial and personnel resources, greater brand name recognition, more extensive coverage areas, access to technologies not available to us and long-established relationships with regulatory authorities and customers.
These additional resources may allow these competitors to offer bundled service offerings that we are not able to duplicate and offer more services than we do.
We may not be able to successfully compete with these larger competitors to attract new customers and retain existing customers.
As a result, we could experience lower revenues, higher sales and marketing expenses and lower earnings, which could have an adverse effect on our business and our results of operations.
We may not be able to close our sale of US towers.
On February 11, 2026, we announced the sale of a substantial portion of our tower portfolio (the “Tower Portfolio”) in the southwestern US to EIP Holdings IV, LLC, an affiliate of Everest Infrastructure Partners, Inc.
(“ Everest ”) (the “Tower Portfolio Transaction”).
Our ability to close the Tower Portfolio Transaction is dependent on our ability to receive certain third-party consents and approvals, including the expiration of any waiting period under the Hart-Scott Rodino Act of 1976, and to cure certain conditions identified at the signing of the Tower Portfolio Transaction with respect to certain sites.
We cannot guarantee when or if these or other conditions will be satisfied or that the Tower Portfolio Transaction will be successfully completed.
In addition, as part of the Tower Portfolio Transaction, EIP Holdings IV, LLC, an affiliate of Everest Infrastructure Partners, Inc.
(“Everest”) has agreed to provide payment and assume the management of certain sites (the “Managed Sites”), for which we will have one year following the closing to remedy any Managed Site conditions, or we will be required to repay the transaction proceeds related to such sites.

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Gone since FY2024

We are highly dependent on our information technology (“IT”) systems for the operation of our network, our facilities, delivery of services to our customers and the compilation of our financial results.
These attacks do not always target data specific to our business but often seek access to the data from market participants in more lucrative industries.
Disruptions in our networks and the unavailability of our services or our inability to efficiently and effectively complete necessary technology or systems upgrades, or conversions could lead to a loss of customers, damage to our reputation and violation of the terms of our licenses and contracts with customers.
We may be required to expend significant resources to protect our IT and operational networks and may need to expend additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures arising from operational and security risks.
These failures could also lead to significant negative publicity, and we may be subject to litigation, regulatory penalties and financial losses.
Network outages could have a material adverse effect on our business and can be caused by a myriad of incidents, including aging or faulty infrastructure, natural disasters, and third-party outages, such as power loss or subsea cable outage.
In addition, our aging network exposes us to increased energy consumption and costs may expose us to additional cybersecurity risks as we maintain out-of-date software to maintain these systems.
We may not be able to adequately fund the maintenance and replacement of this infrastructure on a basis timely enough to avoid material outages, accurately predict equipment failure rates, or be able to locate replacement parts or spares to repair existing equipment due to its age.
Due to the rural and island locations of our networks, our energy costs tend to be high, and due to the nature of our network on average can be higher than those of our competitors operating in the same markets.
We are working to shut down certain energy-inefficient parts of our network, such as our copper plants in Guyana, but rising energy costs may offset any efficiencies gained.
While generator backups are in place where blackouts are common, generators run on costly fuel which contributes to higher energy costs.
Notwithstanding the significant investments that are being made in the US Virgin Islands and in Guyana to upgrade the country's power network, there is no guarantee that the local governments will be able to stabilize the electric infrastructure in the future.
Any network outage could negatively impact our operations, including the provision of service to our customers, and could result in adverse effects to our financial condition and reputation.
Such events may materially disrupt and adversely affect our business operations.
We rely on a limited number of key suppliers and vendors.
If these suppliers experience interruptions, price increases due to tariffs, including those imposed or that may be imposed by the new US administration, or higher inflation, or other problems delivering equipment to us on a timely and cost-effective basis, our subscriber or revenue growth and operating results could suffer significantly.
A large portion of our equipment is sourced, directly or indirectly, from outside the United States.
Major changes in tax policy or trade relations, such as the disallowance of tax deductions for imported products or the imposition of higher tariffs or duties on imported products imposed or that may be imposed by the new US administration , could also adversely affect our business, results of operations, effective income tax rate, liquidity and net income.
We do not currently maintain “key person” life insurance on any of our key employees and none of the executives at our parent company have executed employment agreements requiring a specified period of service.
We are reliant on government funding to execute on the FCC’s Remove and Replace program.
The FCC’s governmental restrictions on the procurement of equipment from certain vendors has resulted in a costly network replacement build in our western United States operations that is funded in part by the FCC’s Replace and Remove Program.
In July 2022, the FCC approved our eligible subsidiaries’ participation in the program but also announced that the total amount of approved costs for which reimbursement was sought by all applicants was far in excess of the amount appropriated by Congress.
In December 2024 this program was fully funded for reimbursement to the Company of up to approximately $517 million.
See US Telecom Segment – Mobility Services –Replace and Remove Program.
Companies that were awarded funding must complete the removal, replacement, and disposal of Covered List equipment and services in their networks within a specified project completion deadline.
However, delays due to factors such as supply-chain issues, delayed approval of reimbursement requests, the underfunding of the program, and other external circumstances could prevent our subsidiaries from meeting these timelines.
We cannot predict whether and to what extent the fund administrator will approve our subsidiaries’ requests for the specific reimbursement of costs, whether we will obtain additional necessary extensions of the completion deadlines, or whether we can complete our participation in the program within the timelines set by the FCC.
Finally, there is a risk that the FCC may continue to enumerate requirements, change stated rules, or delay or withhold funding, including as result of changes to governmental policies and programs, including loans, grants, guarantees and other subsidies.
We are reliant on government funding which brings compliance obligations and risk of change in federal or state funding, including as a result of changes to governmental policies and programs.
In the western United States, we are using government awards to both enable our expanded carrier service initiative and grow the footprint of our network.
We receive federal and state universal service revenues to support our wireline operations in high-cost areas in Alaska, the US Virgin Islands, and in the western United States.
We receive US government funding and awards from numerous other sources, including E-rate, EACAM, RHC program, Tribal Broadband Connectivity, CAF II, RDOF, and state funding.
Administrative and operational expertise is required to meet the growing number of government award programs that we have been awarded.
For example, on May 8, 2024, we entered into a Consent Decree with the FCC Enforcement Bureau, regarding both the USAC and FCC Enforcement Bureau’s investigation with respect to our compliance with Rural Healthcare Program Rules in the 2017 year and agreed to (i) pay a settlement amount of approximately $6.3 million, and (ii) enter into a three-year compliance agreement in connection with Alaska Communication’s continued participation in the RHC Program.
While we believe that we are in material compliance with the Consent Decree and our ongoing RHC Program obligations, any violation of the Consent Decree or other compliance failures may result in additional penalties.
Further, there can be no assurance that we will continue to meet our various government obligations in a capital-efficient manner.
For example, if we fail to meet our buildout and service obligations, or if we require substantial additional capital expenditures to meet the obligations under the timeline required, or if the relevant government agencies reduce funding availability, our revenue, results of operations, and liquidity may be materially adversely impacted.
Finally, there is uncertainty regarding any future levels of these revenues, as the new US administration may choose to decrease or cease funding certain programs, and the constitutionality of the federal universal service program is currently under judicial review.
There can be no assurance that government support will continue at its current levels and decreases, losses, or disruptions in the funding of certain programs may have a materially adverse impact on our revenues.
Historically, we have funded our capital expenditures and transactional matters from a combination of cash on hand, cash from operations, and debt.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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