Exhibit 99.1

            , 2026

Dear Resideo Technologies, Inc. (“Resideo”) Stockholder:

On July 30, 2025, we announced our intention to separate our company into two independent, publicly traded companies. Completion of the separation will create (i) a leading building products manufacturer focused on residential controls and sensing solutions that maximize comfort, help to ensure safety and deliver cost savings and value to homeowners and businesses and (ii) a global specialty distributor, named ADI Global Distribution Inc. (“ADI”), which focuses on professionally installed low-voltage products, including security and audio-visual solutions, serving commercial and residential markets through an omnichannel go-to-market platform. Following the separation, each company is expected to benefit from enhanced strategic and management focus with improved operational agility, tailored capital structure and capital allocation strategies in line with each company’s growth strategy, improved investor alignment with each company’s value proposition, and the ability for investors to separately value each company based on its strategic, operational and financial characteristics.

ADI will be comprised of Resideo’s existing ADI Global Distribution business and certain other assets and liabilities that Resideo is expected to contribute to ADI prior to the separation. As a stand-alone entity, ADI is expected to (i) pursue growth strategies designed to extend its position as a leading industry player, deepen differentiation from competitors and improve our financial profile, and (ii) maintain a balanced capital allocation policy focused on organic growth investments, disciplined deleveraging over time as well as targeted acquisitions.

As a standalone business, Resideo will continue to seek to expand its leading positions across attractive product categories serving critical home systems. Resideo is focused on creating differentiated products and will look to utilize its channel strength and trusted brands to deliver value to homeowners and professionals. Resideo’s strategy is supported by long-term secular tailwinds and the opportunities to expand geographically and into adjacent categories to drive revenue growth, while maintaining strong margins and cash flow generation.

The separation will provide current Resideo common stockholders with ownership interests in both Resideo and ADI. The separation will be in the form of a pro rata distribution of 100% of the outstanding shares of ADI common stock to current Resideo common stockholders. Each Resideo common stockholder will receive           share(s) of ADI common stock for each share of Resideo common stock held on           , 2026 (the “record date” for the distribution).

You do not need to take any action to receive the shares of ADI common stock to which you are entitled as a Resideo common stockholder. You also do not need to pay any consideration or surrender or exchange the shares of Resideo common stock for such shares of ADI common stock to which you are entitled. ADI intends to apply to list its common stock on the New York Stock Exchange under the symbol “ADIG.” Following the distribution, Resideo will continue to trade on the New York Stock Exchange under the symbol “REZI.”

The distribution is intended to be tax-free to current Resideo common stockholders for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. You should consult your own tax advisor as to the particular consequences of the distribution to you, including the applicability and effect of any U.S. federal, state and local and non-U.S. tax laws.

I encourage you to read the information statement, which is being provided to all Resideo common stockholders who held shares of Resideo common stock on the record date. The information statement describes the separation and the distribution in detail and contains important business and financial information about ADI.

We believe the separation is a significant and exciting step in our company’s history, and we remain committed to working on your behalf to continue to build long-term stockholder value.

Sincerely,

Jay Geldmacher

President, Chief Executive Officer and Director

Resideo Technologies, Inc.

            , 2026

Dear Future ADI Global Distribution Inc. (“ADI”) Stockholder:

We are excited to welcome you as a future stockholder of ADI. We are proud of our heritage and are committed to harnessing our experienced management team, talented employees, outstanding brand and strong industry position to continue our record of strong performance.

ADI is a global specialty distributor of professionally installed low-voltage products serving commercial and residential markets through an omnichannel go-to-market platform. Within North America, ADI is a market-leading distributor in the professionally installed security, fire/life safety and audio-visual product categories. ADI generated revenues of $4.8 billion during the year ended December 31, 2025 with over 100,000 customers via our omnichannel go-to-market platform leveraging e-commerce and an integrated network of over 200 locations spanning 17 countries.

As a stand-alone company, we expect to (i) pursue growth strategies designed to extend our position as a leading industry player, deepen differentiation from competitors and improve our financial profile, and (ii) maintain a balanced capital allocation policy focused on organic growth investments, disciplined deleveraging over time as well as targeted acquisitions.

Our outstanding team has a strong Resideo legacy and seeks to make continuous improvement part of everything we do.

I personally invite you to learn more about ADI and our strategic initiatives by reading the accompanying information statement. We intend to apply to list our common stock on the New York Stock Exchange under the symbol “ADIG.” With our strong foundation derived from Resideo, ADI is set up well for what we believe will be our best days to come.

Sincerely,

Robert Aarnes

President and Chief Executive Officer

ADI Global Distribution Inc.

Information contained herein is subject to completion or amendment. A registration statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

Preliminary and Subject to Completion, dated May 11, 2026

INFORMATION STATEMENT

ADI Global Distribution Inc.

Common Stock

(par value $0.001 per share)

This information statement is being furnished in connection with the distribution on a pro rata basis by Resideo Technologies, Inc. (“Resideo”) to its common stockholders of 100% of the outstanding shares of common stock of ADI Global Distribution Inc. (the “Spin-Off”), a wholly-owned subsidiary of Resideo, that will hold, directly or indirectly, the assets and liabilities associated with Resideo’s ADI Global Distribution business (“ADI” or the “Company”).

For each share of Resideo common stock held of record by you as of the close of business on      , 2026, the record date for the distribution, you will receive             share(s) of ADI common stock. You will receive cash in lieu of any fractional shares of ADI common stock that you would have received after application of the above ratio. Resideo will distribute its shares of our common stock in book-entry form, which means that we will not issue physical stock certificates.

The distribution agent will not distribute any fractional shares of our common stock. The distribution is intended to qualify as tax-free to Resideo common stockholders for U.S. federal income tax purposes, except for any cash received in lieu of fractional shares.

Approval from Resideo common stockholders is not required for the distribution. Therefore, you are not being asked for a proxy, and you are requested not to send Resideo a proxy, in connection with the distribution. You do not need to pay any consideration, exchange or surrender your existing shares of Resideo common stock or take any other action to receive your shares of ADI common stock.

Holders of Resideo preferred stock will not be entitled by virtue of their Resideo preferred stock to receive shares of our common stock in the Spin-Off and instead will exchange a portion of the Resideo preferred stock they currently hold for shares of ADI preferred stock. In connection with the Spin-Off, we expect certain terms of the Resideo preferred stock to be amended to be consistent with the terms of the ADI preferred stock described herein. Specifically, we expect the lock-up period applicable to the Resideo preferred stock to be extended to match the Lock-Up Period applicable to the ADI preferred stock, and that Resideo’s right, in certain circumstances, to convert or redeem the Resideo preferred stock will not be exercisable until after the expiration of the Lock-Up Period. As a result, following the Spin-Off, shares of ADI preferred stock and Resideo preferred stock are expected to have substantially similar rights, preferences and privileges and qualifications, limitations and restrictions. The amount of Resideo preferred stock exchanged for ADI preferred stock and the conversion prices of the Resideo preferred stock and ADI preferred stock will be based on the relative equity values of Resideo and ADI as have been determined by the Board of Resideo, in consultation with the holders of Resideo preferred stock. See “Description of Capital Stock—Preferred Stock” and “Certain Relationships and Related Person Transactions—Exchange Agreement, Shareholders Agreement and ADI Preferred Stock Exchange” for more information on the ADI preferred stock.

No trading market for our common stock currently exists. We expect, however, that a limited trading market for our common stock, commonly known as a “when-issued” trading market, will develop as early as three trading days prior to the distribution date, and we expect “regular-way” trading of our common stock will begin on the first trading day after the distribution date. ADI intends to apply to have its common stock authorized for listing on the New York Stock Exchange (the “NYSE”) under the symbol “ADIG.” Following the distribution, Resideo will continue to trade on the NYSE under the symbol “REZI.”

In reviewing this information statement, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 13.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities. The date of this information statement is           , 2026.

A Notice of Internet Availability of Information Statement Materials containing instructions describing how to access this information statement was first mailed to Resideo common stockholders on or about          , 2026. This information statement will be mailed to Resideo’s common stockholders who previously elected to receive a paper copy of Resideo’s materials.

TABLE OF CONTENTS

Presentation of Information

Unless otherwise indicated or the context otherwise requires, references in this information statement to:

Certain percentages and other figures provided and used in this information statement may not add up to 100.0% due to the rounding of individual components.

On July 30, 2025, Resideo announced its intention to separate its ADI Global Distribution business from the remainder of its businesses. On           , 2026, the Resideo Board approved the distribution of 100% of our issued and outstanding shares of common stock on the basis of       share(s) of our common stock for each share of Resideo common stock held as of the close of business on      , 2026, the record date for the distribution.

As of              , 2026, Resideo had 500,000 outstanding shares of Resideo preferred stock. Holders of Resideo preferred stock will not be entitled by virtue of their Resideo preferred stock to receive shares of our common stock in the Spin-Off and will instead, substantially concurrently with the Spin-Off, exchange a portion of the Resideo preferred stock they currently hold for shares of ADI preferred stock. In connection with the Spin-Off, we expect certain terms of the Resideo preferred stock to be amended to be consistent with the terms of the ADI preferred stock described herein. Specifically, we expect the lock-up period applicable to the Resideo preferred stock to be extended to match the Lock-Up Period applicable to the ADI preferred stock, and that Resideo’s right, in certain circumstances, to convert or redeem the Resideo preferred stock will not be exercisable until after the expiration of the Lock-Up Period. As a result, following the Spin-Off, shares of ADI preferred stock and Resideo preferred stock are expected to have substantially similar rights, preferences and privileges and qualifications, limitations and restrictions. The amount of Resideo preferred stock exchanged for ADI preferred stock and the conversion prices of the Resideo preferred stock and ADI preferred stock will be based on the relative equity values of Resideo and ADI as have been determined by the Resideo Board, in consultation with the holders of Resideo preferred stock. As a result, immediately following the Spin-Off,       shares of Resideo preferred stock will remain issued and outstanding,      shares of Resideo preferred stock will be cancelled and       shares of ADI preferred stock will be issued and outstanding. All accrued and unpaid dividends on Resideo preferred stock will be paid in cash immediately prior to the ADI preferred stock exchange and the aggregate liquidation preference of the preferred stock of Resideo and ADI immediately after the Spin-Off will equal the total liquidation preference (defined as the Accumulated Amount in the Resideo Certificate of Designations) of the Resideo preferred stock immediately prior to the Spin-Off. The shares of Resideo preferred stock that remain outstanding will continue to have the same rights, preferences and privileges and qualifications, limitations and restrictions set forth in Resideo’s public filings with the SEC except as otherwise specified in this information statement. See “Description of Capital Stock—Preferred Stock” and “Certain Relationships and Related Person Transactions—Exchange Agreement, Shareholders Agreement and ADI Preferred Stock Exchange” for more information on ADI preferred stock.

Immediately following the Spin-Off, the CD&R Group will beneficially own shares of our common stock and ADI preferred stock, which, taken together on an as-converted basis, represent approximately         % of our total voting power. As a result, the CD&R Group may have the indirect ability to influence our policies and operations, including through its ability to designate up to two directors to our board of directors, and its interests as a preferred equity holder may diverge from, or even conflict with, the interests of the other holders of our common stock. See “Risk Factors—The CD&R Group will hold a significant equity interest in our business and may exercise influence over us, including through its ability to designate up to two directors to our Board, and its interests as a preferred equity holder may diverge from, or even conflict with, the interests of the other holders of our common stock.”

Basis of Presentation

We have historically operated as a part of Resideo and have no operating history as a standalone company. As a result, separate combined financial statements have not historically been prepared. Our historical combined financial statements included elsewhere in this information statement were prepared on a “carve-out” basis in connection with the expected Spin-Off and have been derived from Resideo’s historical accounting records. The combined financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and Resideo’s historical accounting policies. These combined financial statements do not purport to reflect what the financial position, results of operations, comprehensive income or cash flows would have been had the Company operated as a separate, stand-alone entity during the periods presented. Refer to Note 1. Description of the Business and Basis of Presentation to the combined financial statements included elsewhere in this information statement for additional information.

Our historical combined statements of operations include expense allocations for certain corporate expenses provided by Resideo on a centralized basis, including, but not limited to corporate executives, finance, legal, audit, mergers and acquisitions, human resources, information technology, insurance, employee benefits, and other expenses that are either specifically identifiable or clearly applicable to us. These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis using an applicable measure of operating income, headcount or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by us during the periods presented.

Certain related-party transactions between the Company and Resideo have been included in our historical combined financial statements included elsewhere in this information statement. Additionally, we are jointly and severally liable for Resideo’s debt and were jointly and severally liable for Resideo’s obligations under the Indemnification Agreement prior to the termination thereof on August 13, 2025. See “Certain Relationships and Related Person Transactions” as well as Note 9. Long-Term Debt, Note 10. Indemnification Agreement and Note 16. Related Party Transactions to the combined financial statements included elsewhere in this information statement for additional information.

Non-GAAP Financial Data

All financial information presented in this information statement is derived from the combined financial statements of the Company included elsewhere in this information statement. All financial information presented in this information statement has been prepared in U.S. Dollars in accordance with GAAP, except for the presentation of the following non-GAAP financial measures: Adjusted net income, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted free cash flow.

We present Adjusted net income, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted free cash flow in this information statement because we believe such measures provide investors with additional supplemental information to measure our performance. Please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for an explanation on why we use these non-GAAP financial measures, their definitions and their limitations. Because of their limitations, these non-GAAP financial measures are not intended as alternatives to U.S. GAAP measures as indicators of our operating performance and should not be considered as measures of cash available to us to invest in the growth of our business or that will be available to us to meet our obligations. We compensate for these limitations by using these non-GAAP financial measures along with other comparative tools, together with GAAP measures, to assist in the evaluation of operating performance.

For more information on the use of Adjusted net income, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted free cash flow and reconciliations to the nearest GAAP measures, see “Summary Historical and Unaudited Pro Forma Combined Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.”

Market, Industry and Other Data

Unless otherwise indicated, information contained in this information statement concerning our industry and the markets in which we operate, including our general expectations, market position and market opportunity, is based on information from third-party sources and management estimates. Our management estimates are derived from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge, which we believe to be reasonable. Our management estimates have not been verified by any independent source. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information statement. In addition, assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors.” These and other factors could cause future performance to differ materially from our assumptions and estimates. Forecasts and other forward-looking information with respect to industry, business, market and other data are subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this information statement. See “Cautionary Statement Concerning Forward-Looking Statements” for more information.

This information statement also includes references to our “Net Promoter Score” or “NPS”, which we use to measure our customers’ brand loyalty and satisfaction, and can range from -100 to +100. Responses were collected in 2025 as part of quarterly, non-overlapping customer surveys conducted by management of over 3,300 customers. Responses were collected from 0, Not Likely, to 10, Very Likely. Customers who responded 6 or lower are considered detractors, those who responded 7 to 8 passives and those who responded 9 or 10 promoters. Our NPS was calculated by using the standard methodology of subtracting the percentage of customers who were detractors from the percentage of customers who were promoters. Customers who declined to answer are excluded from the calculation. While NPS benchmarking can vary significantly by industry, we believe this method is substantially consistent with how businesses across our industry typically calculate their NPS.

Trademarks and Trade Names

The name and mark, ADI, and other trademarks, trade names and service marks of the Company appearing in this information statement are our property or, as applicable, licensed to us, or, as applicable, are the property of Resideo. The name and mark, Resideo, and other trademarks, trade names and service marks of Resideo appearing in this information statement are the property of, or have been licensed to, Resideo. This information statement also contains additional trade names, trademarks and service marks belonging to other companies. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

 QUESTIONS AND ANSWERS ABOUT THE SEPARATION AND DISTRIBUTION

 

Breakdown of FY2025 Revenue by Product Category and Region

 

By Product Type	By Region

 

Our History

 

ADI traces its roots to the Alarm Device Manufacturing Company (“ADEMCO”), founded in 1929 by Maurice Coleman in New York. ADEMCO became a leading maker of intrusion and life safety devices through the mid-20^th century. In 1963, ADEMCO was acquired by the Pittsburgh Railway Company, which renamed itself Pittway in 1967 as it diversified around security and related businesses. In 1988 Pittway formed ADEMCO Distribution Inc. to better distribute its growing security portfolio, an operation that later evolved into ADI.

 

In February 2000, Honeywell International acquired Pittway bringing ADI under the Automation & Control segment. The business operated for almost two decades within Honeywell before becoming a part of Resideo upon its spin-off in October 2018. Since then, ADI has grown organically, while also executing a focused M&A strategy to broaden adjacencies, add services and expand regional coverage. Between 2020 and 2023, ADI executed six acquisitions, deepening category expertise and expanding customer reach into the professional AV, residential AV and data communications categories.

 

In June 2024, Resideo acquired the Snap One business (“Snap One”) for approximately $1.4 billion and combined ADI’s scale and leadership in professionally-installed low voltage products distribution with Snap One’s strong position and offerings in residential AV, including the innovative Control4 smart home automation platform used in more than 500,000 homes and businesses and the OvrC cloud-based remote management platform empowering more than 60,000 professional installers with cloud-based configuration, project deployment and remote support capabilities. Together, ADI and Snap One provide integrators an increased selection of both third-party products and exclusive brand offerings.

 

Industry Overview

 

ADI has a global reach in low-voltage specialty distribution across four interrelated product categories: (i) security, (ii) audio-visual (residential AV and professional AV), (iii) fire/life safety and (iv) data communications, with an increasingly convergent landscape with professionals installing across multiple categories. ADI’s largest geography by revenue is North America where management estimates these four product categories represented a large and growing total addressable industry (“TAI”) of approximately $65 billion in 2025, with security and fire/life safety representing approximately 15%, residential AV representing approximately 10%, professional AV representing approximately 50% and data communications representing approximately 25%. Drivers of demand by product category include:

 

●

Security (represents greater than 50% of total revenue for fiscal year 2025): Demand is driven by growing sophistication of physical and cyber security threats and increased concerns around crime and asset protection, each of which continues to drive adoption and increased security spend across commercial and residential markets. This growth is further augmented by faster tech-led refresh cycles—AI/cloud upgrades in video surveillance, cloud/mobile credentials expanding access control and modernization of intruder alarms. With a well-known brand in North America despite broadline distributors continuing to gain traction with large commercial projects through bundled offerings, management believes ADI is the leading specialty distributor in security, being strongest in the small and midsize business (“SMB”) commercial and residential segments, while select distribution competitors maintain a stronger presence in enterprise grade installations.

  

RISK FACTORS

You should carefully consider the risks and uncertainties described below, together with the information included elsewhere in this information statement. The risks and uncertainties described below are those that we have identified as material but are not the only risks and uncertainties facing us. These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect us and our securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. Our business is also subject to general risks and uncertainties that affect many other companies, such as market conditions, economic conditions, geopolitical events, changes in laws, regulations or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or other disruptions of expected business conditions. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, including our results of operations, liquidity and financial condition.

Risks Relating to Our Business

We operate in highly competitive markets that are continually evolving, and we may not be able to attract new customers or retain existing customers.

We operate in a highly competitive, continually evolving environment, and we compete directly with global, national, regional and local providers of our products, services and solutions, including distributors, manufacturers, service and software providers, retailers and online commerce providers. The most significant competitive factors we face are: the reputation of our Company, the demand for the third-party and exclusive branded products we sell; service and price; product availability; speed and accuracy of delivery; customer and technical support; customer relationships, product performance; reliability and warranty; meeting evolving customer expectations for e-commerce; ease of installation; and sales and marketing programs. In addition to current competitive factors, there have been, and in the future there may be, new market entrants with nontraditional businesses, new business, distribution and customer service models or disruptive technologies and products. We may face competitive pressures from changing consumer preference for simple do-it-yourself solutions rather than adopting professionally installed solutions. In addition, retail outlets, including online commerce, may increase their participation in wholesale distribution markets. To remain competitive, we will need to invest continually in our distribution networks, products and services development, e-commerce technology and experience and marketing. We may not have sufficient resources to continue to make such investments and we may be unable to maintain our competitive position. Our ability to effectively compete and attract new customers and retain existing customers will depend on, among other items, the perceived value and quality of our products, consumer demand for distributed low voltage products, the elasticity of our price increases, our ability to offer new and relevant products, our ability to invest adequately in e-commerce related technologies and deliver e-commerce experiences that meet our customer’s evolving expectations and the effectiveness of our marketing efforts. We may also lose loyal customers to our competitors if we are unable to meet consumer demand in a timely manner. In all such situations, our ability to attract and retain customers could be adversely affected, which could adversely affect our business, financial condition, results of operations and cash flows.

Our offerings are primarily distributed and delivered through our omnichannel platform to a network of professional contractors, installers, and integrators, as well as select online merchants. If retail outlets, including online commerce platforms, increase their presence in wholesale distribution markets, or if customers increasingly purchase our products through these channels rather than through us, our business may be unable to effectively compete, which could adversely affect our business, financial condition, results of operations and cash flows.

Weakness in the economy, market trends and other conditions affecting the profitability and financial stability of our customers, our supply chain and our logistics network could negatively impact our sales growth, costs and results of operations.

Economic, political and industry trends affect our business environment. In particular, our business is affected by the performance and activity of the global new construction and the repair and remodel construction industries. Similarly, the slowing of the housing market may result in reduced demand for the products we distribute. These and other industries and markets we serve have demand that is sensitive to the production activity, capital spending and demand for products and services of our customers. The ongoing uncertainty and volatility in the global macroeconomic environment have affected, and could continue to affect, our visibility toward future performance. While supply chain, trade dynamics and logistics continued to normalize over 2025, uncertainties remain in 2026 including the potential for changes in inflation and interest rates, tariffs, increased labor costs, availability of labor, and reduced consumer spending due to softening labor markets, elevated mortgage rates, unfavorable foreign currency impacts, global conflicts and shifts in energy policies. Many of our customers operate in markets that are subject to fluctuations resulting from market uncertainty, trade and tariff policies, costs of goods sold, supply shortages or reduced availability of raw materials, components and finished goods; capacity constraints or delays at suppliers, third-party contract manufacturers, component vendors and other suppliers, ports and logistics hubs, currency exchange rates, interest rate fluctuations, government spending and government shutdowns, economic downturns, recessions, foreign competition, offshoring of production, oil and natural gas prices, information system outages or cyber incidents, geopolitical developments, labor shortages, work stoppages, natural or human induced disasters, extreme weather, disruptions to transportation infrastructure and networks, outbreaks of pandemic disease, inflation, deflation and a variety of other factors beyond our control. Any of these factors could cause customers to idle, delay purchases, reduce production levels or experience reductions in the demand for their own products or services. Similarly, certain of these factors have in the past, and could in the future, impact our supply chain and logistics network and could cause shipment delays, backlogs, longer lead times and higher transportation, import and export costs.

Any of these events could also reduce the volume of products and services these customers purchase from us or impair the ability of our customers to make full and timely payments and could cause increased pressure on our pricing and terms of sale. Accordingly, a significant or prolonged slowdown in economic activity in the U.S. or any other major world economy, or a segment of any such economy, could negatively impact our sales and results of operations.

Any of these factors could similarly impact our supply chain and logistics network and could cause shipment delays, backlogs, longer lead times and higher transportation, import and export costs. See “Risks Relating to Our Business—Disruptions to our supply chain, logistics network, and fulfillment centers, and reliance on third-party contract manufacturers could impair our ability to meet demand and increase our costs.”

Any of these events could also reduce the volume of products and services these customers purchase from us or impair the ability of our customers to make full and timely payments and could cause increased pressure on our pricing and terms of sale. Accordingly, a significant or prolonged slowdown in economic activity in the U.S. or any other major world economy, or a segment of any such economy, could negatively impact our sales and results of operations.

Enhanced tariff, import/export restrictions, or other trade barriers along with recent judicial developments may have an adverse impact on global economic conditions. 

We are subject to certain laws and regulations affecting our international operations which, among other things, provide certain preferential duties and tariffs for qualifying imports subject to compliance with the applicable rules of origin and other requirements. There have been, and continue to be, uncertainties with respect to the global economy and trade relations between the U.S. and other countries globally. Implementation of more restrictive trade policies, barriers, or market access policies, or the renegotiation of existing U.S. trade agreements or trade agreements of other countries where we sell or procure large quantities of products and services or procure supplies and other materials incorporated into our products could negatively impact our business, results of operations, cash flows and financial condition. Various modifications to global tariffs, sanctions, and other trade measures have introduced uncertainty in global markets that could adversely affect the business of our customers and suppliers, which could in turn negatively impact our net revenue, cash flows, and results of operations.

In 2025 and 2026, the Trump administration implemented or announced tariffs and other trade actions against certain products and countries where we manufacture, source or sell goods including China, Vietnam, the European Union, Mexico, Canada, Malaysia and Taiwan. In February 2026, the U.S. Supreme Court issued its opinion that the tariffs imposed by the U.S. government under the International Emergency Economic Powers Act (“IEEPA”) were unauthorized, but other tariff types continue to be in effect including newly enacted tariffs under Section 122 of the 1974 Trade Act. Certain of these tariffs and duties increased the costs of some of our imported products and services, resulted in higher freight and logistics expenses and supplier surcharges, and impacted our pricing, sourcing, and inventory strategies. In response to tariffs, we have taken mitigating measures including negotiating decreases with our suppliers, and passing along incurred costs to customers. Although, in the aggregate, the impact to date has not been material to our business, results of operations, or financial condition, if tariffs or duties are expanded or increased, or interpreted by a court or governmental agency to apply to more of our products, this could disrupt our supply chain and lead times, significantly and materially increase product costs, compress margins and adversely affect our business, operating results and financial condition. In addition, the U.S. government has adopted, and may continue to adopt, enforcement postures regarding import classifications, country of origin standards and access to exclusions, which could result in increased tariffs or duties on our products.

In addition, the U.S. federal government and certain states, as well as other foreign governments including the United Kingdom and European Union, have imposed certain restrictions on the licensing, use, and import and export of certain surveillance, networking, telecommunications and other equipment manufactured by certain of our suppliers based in China for our business, which may require us to find additional sources of end user products and result in higher costs. We have in the past had inquiries and claims from the U.S. federal government and a U.S. state Attorney General regarding sales of certain Chinese made products in the U.S., which inquiries and litigation could impact our business reputation.

The continuing adoption or expansion of trade restrictions, the occurrence of a trade war or other governmental action related to tariffs or trade agreements or policies has the potential to adversely impact demand for our products, including as a result of higher consumer prices due to such trade restrictions, and may adversely impact our costs, our customers, our suppliers and the U.S. economy, which in turn could have a material adverse effect on our business, operating results and financial condition.

Challenges in forecasting demand and managing working capital and inventory may negatively affect our cash flow, margins and overall financial performance.

Accurate forecasting and disciplined management of inventory, receivables and payables are essential to our performance. Variability in customer demand, channel mix and macroeconomic conditions—together with uncertainty in the volume, timing and type of orders we receive across channels—can make forecasting difficult, and prior growth rates or trends may not be predictive of future results. If our assumptions prove inaccurate or we fail to adjust promptly, we may incur excess, obsolete or insufficient inventory, experience stock-outs or make suboptimal purchasing and production decisions, leading to lower revenue, decreased gross margins, higher carrying and storage costs, increased customer acquisition and retention costs and reduced cash conversion. Additionally, fluctuations in foreign exchange rates and interest rates, supplier price inflation, changes in vendor payment terms and credit risk or collection delays on receivables can affect inventory costs, the value and timing of receivables, and the cost of debt, which may impair working capital efficiency, liquidity, and our ability to fund operations and growth initiatives. Any of these factors could adversely affect our business, financial condition, results of operations and prospects.

Disruptions to our supply chain, logistics network, and fulfillment centers, and reliance on third-party contract manufacturers could impair our ability to meet demand and increase our costs.

Our operations are exposed to supply chain and logistics risks, including shortages or reduced availability of raw materials, product components and finished goods; capacity constraints or delays at suppliers, third-party contract manufacturers, component vendors and other suppliers, ports and logistics hubs or our inability to obtain necessary raw materials and product components, production equipment, or replacement parts; labor disputes, strikes, lockouts or shortages; pandemics or other public health events; natural disasters and extreme weather; disruptions to transportation infrastructure and networks; geopolitical events such as war, civil unrest or terrorism; information system outages or cyber incidents at our or our third-party partners’ facilities or systems; and price inflation in materials, freight and other inputs. These events can lead to shipment delays, backlogs, longer lead times, and higher transportation, import and export costs. Alternative sources or routes may not be available on favorable terms, and our third-party contract manufacturers, component vendors, other suppliers, and shipping and logistics partners may experience delays, capacity constraints, financial distress or insolvency, labor disruptions, or information system outages that impede their performance and our ability to serve customers. Resulting product shortages or delivery delays could cause us to be unable to obtain particular products or sufficient quantities of such products, miss customer delivery schedules, lose sales and market share, incur penalties or expedited freight costs, suffer a competitive disadvantage, and harm our reputation, which in turn could adversely affect our business, operating results and financial condition.

In addition, we rely upon a network of warehouses, stores, and other fulfillment centers to effectively fulfill our orders. If we do not optimize, operate, and manage the expansion capacity of our warehouse fulfillment centers successfully and efficiently, this could result in a disruption to our ability to deliver our products, excess or insufficient fulfillment capacity, an increase in costs or impairment charges or harm our business in other ways. In addition, if we do not have sufficient fulfillment capacity or experience a problem fulfilling orders in a timely manner, our customers may experience delays in receiving their purchases, which could harm our reputation and our relationship with our customers, and our business, results of operations, cash flows, and financial condition.

With respect to our exclusive branded products, we rely on a limited number of third-party contract manufacturers to manufacture most of our products and components, and in many cases, one of these manufacturers is our only source for a particular product or product family. Our reliance on contract manufacturers to produce many of our products reduces our control over the assembly process, exposing us to risks, including reduced control over quality assurance, production costs and product supply. Quality control problems, such as the use of materials and delivery of products that do not meet our quality control standards and specifications or comply with applicable laws or regulations, could harm our brand and business or cause end user dissatisfaction. Quality control problems could also result in regulatory action, such as restrictions on importation, products of inferior quality or product stock outages or shortages, harming our sales and creating inventory write-downs for unusable products. In addition, any failure in the proper functioning of embedded firmware and software and the uninterrupted integration with third-party products on which our exclusive brand products and services rely on may harm our brand, operations and business. These risks are heightened because a significant portion of our net revenue comes from exclusive branded products. In the fiscal years ended December 31, 2025 and 2024, approximately 18% and 12% of our net revenue, respectively, were from sales of our exclusive branded products.

Currency exchange rate fluctuations and financial counterparty risks may adversely affect our results.

We are exposed to risks associated with the effects of changes in currency exchange rates as changes in the relative fair values of currencies occur from time to time and may, in some instances, have a material impact on our operations. Approximately 18% and 19% of our 2025 and 2024 net revenue, respectively, was derived outside the U.S., and we expect sales to non-U.S. customers to continue to represent a similar portion of our consolidated net revenue. A significant amount of our expected payment obligations, including pursuant to the tax matters agreement, and our anticipated debt obligations will be denominated in U.S. dollars, which exposes us to foreign exchange risk. We also translate assets, liabilities, revenue, and expenses denominated in non-U.S. dollar currencies into U.S. dollars for our combined financial statements based on applicable exchange rates. Consequently, fluctuations in the value of the U.S. dollar compared to other currencies may have a significant impact on the value of these items in our combined financial statements, even if their value has not changed in their original currency. We do not currently hedge against our currency exposure, though in the future we may choose to.

Loss of key suppliers could decrease sales, profit margins and earnings.

Products supplied by our ten largest third-party product suppliers in 2025 and 2024 accounted for approximately 47% and 49% of our revenue by dollar volume for the respective period. We are party to distribution agreements with these suppliers, with an average term of 3 years as of December 31, 2025. Our standard distribution agreement is not terminable for convenience, requires our suppliers to provide at least 60 days’ written notice of any price increase and provides for volume rebates and prompt payment discounts. In connection with our supplier agreements, we enter into purchase obligations with certain suppliers on occasion. As of December 31, 2025, we had purchase obligations of $78 million, with $78 million payable within 12 months. A significant change in the terms or conditions of sale from a significant supplier has in the past affected and could in the future negatively affect our operating margins, revenues, and/or the level of capital required to fund our operations. The loss of, or a substantial decrease in the availability of, products from any of our key suppliers, a supplier’s change in sales strategy to reduce its reliance on distribution channels, the loss of key preferred supplier agreements or disruptions in a key supplier’s operations could have a material adverse effect on our business. Although we believe our relationships with our key suppliers are strong, they could change their strategies as a result of a change in control, expansion of their direct sales force, changes in the marketplace or other factors beyond our control, including a key supplier becoming financially distressed or experiencing operational or business disruptions, which could materially affect our supply chain, increase our costs or disrupt our ability to deliver products to our customers in a timely and cost-effective manner. 

We are subject to the economic, political, regulatory, foreign exchange and other risks of international operations.

Our international revenue represented approximately 18% and 19% of our net revenue for the years ended December 31, 2025 and 2024, respectively. A significant amount of our exclusive branded products are sourced from third-party contract manufacturers located in Asia. In addition, some of our research and development, IT support, software and e-commerce development, customer support and operations and other engineering occurs outside the United States. Our international geographic footprint subjects us to many risks including but not limited to: exchange control regulations; wage and price controls; antitrust/competition regulations; environmental regulations; employment regulations; foreign investment laws; monetary and fiscal policies and protectionist measures that may prohibit acquisitions or joint ventures, establish local content requirements or impact trade volumes; import, export and other trade restrictions (such as embargoes); tariffs; violations by our employees of anti-corruption laws (despite our efforts to mitigate these risks); changes in regulations regarding transactions with state-owned enterprises; nationalization of private enterprises; natural and manmade disasters, hazards and losses; backlash from foreign labor organizations related to our restructuring actions; violence; civil and labor unrest; acts of terrorism; global conflicts; product-related regulatory requirements including certifications, standards and building codes; regulations relating to personal and non-personal data, privacy, artificial intelligence and cybersecurity regulations; and our ability to hire and maintain qualified staff and maintain the safety of our employees in these regions. See “Risks Relating to Legal and Regulatory Matters—Failure to comply with the broad range of standards, laws and regulations in the jurisdictions in which we operate may result in exposure to substantial disruptions, costs and liabilities.”

Furthermore, certain non-U.S. entities and assets that are part of our Spin-Off from Resideo may not be transferred prior to the Spin-Off because the entities or assets, as applicable, are subject to foreign government or third-party approvals that we may not receive prior to the Spin-Off. Such approvals may include, but are not limited to, approvals to merge or demerge, to form new legal entities (including obtaining required registrations and/or licenses or permits), and to transfer assets and/or liabilities. It is currently anticipated that all material transfers will occur without delays beyond the closing of the distribution, but we cannot offer any assurance that such transfers will ultimately occur or not be delayed for an extended period of time. To the extent such transfers do not occur prior to the distribution, under the separation agreement, the economic benefits and burdens of owning such assets and/or entities will, to the extent reasonably possible and permitted by applicable law, be provided to the Company.

Current global conflicts and potential conflicts have created substantial uncertainty in the global economy, including sanctions and penalties imposed on certain countries from several governments. We are unable to predict the impact that these actions will have on the global economy or on our financial condition, results of operations and cash flows as of the date of these financial statements.

Our success depends on our ability to maintain the value and reputation of our brand. Failure to achieve and maintain a high level of product and service quality could damage our reputation with customers and negatively impact our results.

We have developed strong and trusted brands that have contributed to the success of our business and we believe our continued success depends on our ability to maintain and grow the value of our brands. Maintaining, promoting and positioning our brands and reputation will depend on, among other factors, the success of our product offerings, product safety, quality assurance, marketing and merchandising efforts, our continued focus on delivering innovative and compelling low voltage products to our customers, e-commerce technology and experience, the proper functioning and versioning of embedded firmware, software, as well as the uninterrupted integration with third-party products and our ability to provide a consistent, high-quality consumer experience.

An important element of our overall strategy is the success and growth of our exclusive brands across various categories and products, with a focus on improved end user interfaces and digital platform enhancements. If we are unable to execute on this growth strategy, our margins and results of operations could be adversely affected. We rely on third-party manufacturers to supply exclusive branded products for our business and a significant percentage of these exclusive branded products are sourced from manufacturers located in Asia. Any potential or perceived quality issues, product defects, recalls, counterfeiting, safety incidents, or failures to meet evolving regulatory or customer requirements could damage our brand, increase warranty and service costs, or result in product liability claims. Furthermore, customers may prefer third-party branded alternatives or resist transitions to our exclusive branded products, and competitive responses may require increased promotional activity, pricing concessions, or investment in channel incentives, each of which could reduce expected profitability. Our growth strategy also depends on continued investment in, and adoption of, our end user interfaces and digital platforms. These initiatives include e-commerce capabilities, digital tools, data analytics, and omnichannel integration designed to improve customer engagement, accelerate product discovery, and enhance attach rates and mix.

Product and service quality issues could result in a negative impact on customer confidence in our company, our products and our brand image. We rely on qualified installers and integrators to sell and install many of our products and services for end users and if our solutions are not properly installed, they may fail to operate as intended which could adversely impact our reputation and consumer confidence in our products and services and otherwise expose us to financial liability and adversely affect our business, results of operations and financial condition. If the products we distribute do not meet applicable legal and safety standards or our customers’ expectations regarding safety or quality, or if the products we distribute are improperly designed, manufactured, packaged or labeled, or are otherwise alleged to cause harm or injury, they may be subject to recall and we may experience increased warranty costs or lost sales and increased costs and exposure to legal, financial and reputational risks including litigation and government enforcement action, as well as product liability claims. Any negative publicity, regardless of its accuracy, could have an adverse effect on our business. Brand value is based on perceptions of subjective qualities, and any incident that erodes the loyalty of our customers, suppliers or manufacturers, including changes to our products or packaging, failure of embedded firmware, software, or the uninterrupted integration with third-party products, adverse publicity or a governmental investigation, litigation or regulatory enforcement action, could significantly reduce the value of our brand and adversely affect our business, financial condition, results of operations and prospects.

We may from time to time pursue acquisitions. Our business may be adversely affected if we cannot consummate acquisitions on satisfactory terms, or if we cannot effectively integrate acquired companies or assets.

We may from time to time in the future pursue and consummate acquisitions of companies or assets. Our ability to consummate any future acquisitions will be partially dependent upon the availability of suitable acquisition candidates at favorable prices and upon advantageous terms and conditions. We may not be able to find suitable acquisition candidates to purchase or may be unable to acquire on economically acceptable terms or to receive necessary regulatory approvals or support.

The consummation of any particular acquisition may depend, in part, on our ability to raise the capital necessary to fund such acquisition which may not be available to us at all or on economically advantageous terms. In addition, if we consummate an acquisition, our capitalization and results of operations may change significantly. Future acquisitions could result in gross and/or operating income dilution, the incurring of additional debt or equity issuances and contingent liabilities and an increase in interest and amortization expenses or periodic impairment expenses related to goodwill and other intangible assets and significant charges relating to integration costs.

We may not be successful in effectively identifying all risks of an acquired business, integrating the acquired business or technology into our existing business or realizing the benefits expected at acquisition. Our due diligence may fail to identify all of the liabilities or challenges of an acquired business, product, software, service or technology, including issues related to intellectual property, product quality or product or software architecture, regulatory compliance practices, revenue recognition or other accounting practices or employee, customer or supplier issues. We may not be able to achieve expected operational synergies or savings, or any growth targets identified in acquisition diligence. The successful integration of future acquisitions may also require substantial attention from our senior management and the management of the acquired business, which could decrease the time that they have to manage our existing portfolio, attract customers and develop new products and services or attend to other acquisition opportunities.

Risks Relating to Information Technology, Intellectual Property and Data Security and Privacy

We rely on a dependable IT infrastructure and network operations that have adequate cybersecurity functionality.

The efficient operation of our business requires substantial investment in technology infrastructure systems, including enterprise resource planning systems, information systems, supply chain management systems, digital commerce systems, other third-party bolt-on systems critical to support operations and connected solutions platforms and network operations and systems. The failure to acquire, implement, maintain, and upgrade these systems has previously, and may in the future, impact our ability to respond effectively to changing customer expectations, manage our business, scale our solutions effectively, disrupt our ability to fulfill customer orders, or impact our customer service levels, which has in the past, and may in the future, put us at a competitive disadvantage and negatively impact our business, results of operations, financial condition and cash flows. We have experienced delays in certain aspects of the implementation of certain ADI enterprise systems; while we have resolved concerns to date related to the system implementation, we may not be able to successfully implement or consolidate all systems without delays related to resource constraints or additional challenges with the critical implementation process. While we have in the past experienced interruptions of service in our enterprise systems, none of these have been material to date. In addition, in connection with our acquisition of the Snap One business, we are in the process of consolidating and integrating our ADI and Snap One enterprise applications and e-commerce platforms. In connection with certain upgrades to our technology infrastructure systems or acquisitions, we have encountered, and may continue to encounter in the future, concerns and challenges in the implementation and consolidations of IT infrastructure systems, digital experience and e-commerce platforms, including delays related to resource constraints and complexities in the critical implementation process, which have temporarily impacted, and may in the future temporarily impact, our customer service levels and overall performance of our IT infrastructure. Repeated or prolonged interruptions of service, due to cyber threats or problems with our systems or third-party technologies, such as that experienced globally by virtue of the Jira data exfiltration in June 2025, could have a significant negative impact on our reputation and our ability to sell products and services. Our business, results of operations, financial condition and cash flows may be adversely affected if our information systems fail, become unavailable for prolonged periods of time, are corrupted or do not allow us to transmit accurate information. Failure to properly or adequately address these issues, including the failure to fund backups, upgrades and improvements to our systems, could impact our ability to perform necessary business operations, which could adversely affect our reputation, competitive position, business, results of operations, financial condition and cash flows. Our ability to keep our business operating is highly dependent on the proper and efficient operation of our and third-party data centers, networks and data backup systems.

Our IT and engineering systems contain sensitive information, including personal data, trade secrets and other proprietary information. In addition, our connected products potentially expose our business and customers to cybersecurity threats. As a result, we have experienced and may in the future be subject to systems interruption, data corruption, data loss and service and product failures, not only resulting from the failures of our products or services but also from the failures of third-party service providers, natural disasters, power shortages or terrorist attacks, and cyber or other security threats. There is no assurance that the comprehensive security measures we have put in place to protect our IT and engineering systems, services and products against unauthorized access and disclosure of personal data or confidential or trade secret information will be effective in every case.

We have experienced, and expect to continue to experience, cybersecurity threats and incidents, none of which, to our knowledge, have been material to date. The potential consequences to any of our connected solutions platforms, data centers or network operations and systems resulting from a material cyber or other security incident such as a successful ransomware attack or malicious publication of confidential information, trade secrets or personal data include financial loss, reputational and brand impact, negative media coverage, loss of stockholder value, loss of customers, litigation with third parties, including class-action litigation, regulatory investigations, audits or other enforcement actions, theft of intellectual property, fines, regulatory reporting for data breaches and increased cyber and other security protection and remediation costs due to the increasing sophistication and proliferation of threats, which in turn could adversely affect our competitiveness, business, financial condition, results of operations and cash flows. In addition, damages, fines and claims arising from such incidents may not be covered by, or may exceed the amount of, any insurance available or may not be insurable.

Our future results and growth are partly dependent upon our ability to develop, maintain and protect our intellectual property.

As of December 31, 2025, we owned approximately 97 worldwide active patents and 25 pending patent applications. We rely on a combination of trademarks, trade names, trade secrets, patents, copyrights and other proprietary rights, as well as contractual arrangements, including licenses, to establish, maintain and protect our intellectual property rights. Many of our exclusive branded products attribute significant value to their brand names. See “Risks Relating to Our Business—We operate in highly competitive markets that are continually evolving, and we may not be able to attract new customers or retain existing customers.” These rights may not prevent competitors from developing similar products or limit challenges to our intellectual property rights. Failure to protect our intellectual property rights or defend against infringement claims could adversely affect our business, financial condition and results of operations.

Our industry experiences significant intellectual property litigation, and we have in the past and could in the future become involved in costly and lengthy litigation involving patents or other intellectual property rights which could adversely affect our business. We have received allegations of patent infringement from third parties, including both operating companies and non-practicing entity patent holders, as well as communications from customers requesting indemnification for allegations brought by third parties. These allegations have resulted in patent litigation relating to certain of our products and may continue to result in new litigation. These proceedings have in the past and could in the future result in financial liability, harm our ability to compete and divert our management’s time and attention. Furthermore, our ability to enforce our intellectual property rights in emerging markets may be limited by legal or practical considerations that have not historically affected our business in markets with more established intellectual property protection systems. We are also monitoring the risk of inadvertent intellectual property rights infringement introduced by evolving technologies such as generative AI. Often, we receive offers to license patents for our use. We believe that we will be able to access any necessary rights through licensing, cross-licensing or other mutually beneficial arrangements, although to the extent we are required but unable to enter into such arrangements on acceptable economic terms, it could adversely impact us, requiring us to take specific actions including ceasing using, selling or manufacturing certain products, services or processes or incurring significant costs and time delays to develop alternative technologies or re-design products.

Our intellectual property rights may not be sufficient to permit us to take advantage of some business opportunities. As a result, we may be required to change our plans or acquire necessary intellectual property rights, which could be costly. Our operations depend in part upon third-party technologies, software and intellectual property. Failure to renew contracts with existing providers or licensors of technology, software, intellectual property or connectivity solutions, or to contract with other providers or licensors on commercially acceptable terms or at all, as well as any failure by such third-party provider to provide such technology solutions, may adversely impact our business, financial condition, results of operations and cash flows.

We have in the past relied, and may in the future rely, on AI technologies internally for business purposes and in our products and services. The regulatory framework for AI technologies is rapidly evolving as many federal, state, and foreign government bodies and agencies have introduced or are currently considering additional laws and regulations; to the extent any such laws or regulations apply to our business, or existing laws and regulations are interpreted in ways that would affect the use of AI technologies in our business, we may need to implement additional standards or practices to remain compliant and the operation of our business could be adversely affected.

We have in the past relied, and may in the future rely, on AI technologies internally for business purposes and in the products and services we develop. These technologies are complex and rapidly evolving and building them may require significant investment in infrastructure and personnel with no assurance that we will realize the desired or anticipated benefits. In addition, certain of our products and services may rely on AI technologies, which are complex, subject to increasing litigation and regulatory scrutiny, and may have errors or inadequacies that are not easily detectable. The regulatory framework for AI technologies and automated decision-making is changing rapidly. There are significant risks involved in utilizing AI technologies, machine learning, data analytics and similar tools that collect, aggregate and analyze data or inputs in connection with our business and no assurance can be provided that the usage of such AI technologies will enhance our business or assist our business in being more efficient or profitable. It is possible that new laws and regulations will be adopted in the United States and in non-United States jurisdictions, or that existing laws and regulations may be interpreted in ways that would affect the operation of our products and services and the way in which we use AI technologies. We may not be able to adequately anticipate or respond to these evolving laws and regulations, and, to the extent we expand our business to more jurisdictions, we may need to adjust our offerings in certain jurisdictions if applicable legal frameworks are inconsistent across jurisdictions. The cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations.

The use of third-party and proprietary AI technologies in search, software development and system design, among other functions, in our business may expose us to risks as the intellectual property ownership, license rights, and other legal rights, including copyright, may not been fully interpreted by U.S. or foreign courts or been fully addressed by legislation. For example, it may be challenging to ascertain whether the authors of the original software had sufficient rights to support our usage of the tools, data and models underlying such software. In addition to intellectual property risks, the use of this software may exacerbate other risks, including cybersecurity and privacy risks and other rights issues. This could adversely affect our reputation and expose us to legal liability as well as contractual or regulatory risk. Additionally, our reliance on AI technologies could pose ethical concerns and lead to a lack of human oversight and control, which could have negative implications for our customers’ experience and our reputation.

Within our operations, employees leverage AI, including generative AI technologies, to accelerate the creation of new features and reduce overall development time. While these technologies can enhance efficiency, they also present potential intellectual property and privacy risks. Confidential information or trade secrets may inadvertently be disclosed through generative AI interactions, and there is a risk that third-party intellectual property could be inadvertently embedded in AI-generated results. There is also a risk of incorrect, biased or unethical outputs, which can harm our reputation and competitive position and result in regulatory scrutiny or legal liability.

Our products also utilize AI technologies to offer richer insights and more relevant notifications to our customers. For example, our video solutions use AI technologies to identify people, animals, packages and other objects. We believe it is necessary to support these capabilities to remain competitive in the smart home marketplace. Customers may reject AI-powered solutions over fears that their personal data, video footage or usage patterns could be misused or inadequately protected. Our competitors or other third parties may incorporate AI into their products more quickly or successfully than us, which could impair our ability to compete effectively and adversely affect our results and operations. Additionally, there is no guarantee that AI-based features will succeed commercially or even prove technically feasible in all scenarios. AI technologies may generate false alerts or fail to detect real events, undermining customer trust and potentially damaging our reputation.

As the use of AI becomes more prevalent, we anticipate that it will continue to present new or unanticipated ethical, reputational, technical, operational, legal, competitive, and regulatory issues, among others. We expect that our gradual incorporation of AI in our business may require additional resources, including the incurrence of additional costs, to develop and maintain our products and services to minimize potentially harmful or unintended consequences, to comply with applicable and emerging laws and regulations, to maintain or extend our competitive position, and to address any ethical, reputational, technical, operational, legal, competitive, or regulatory issues that may arise as a result of any of the foregoing. Further, a number of aspects of intellectual property protection in the field of AI are currently under development and there is uncertainty and ongoing litigation in different jurisdictions as to the degree and extent of protection warranted for AI and relevant system input and outputs.

Risks Relating to Legal and Regulatory Matters

Failure to comply with the broad range of standards, laws and regulations in the jurisdictions in which we operate may result in exposure to substantial disruptions, costs and liabilities.

Applicable laws and regulations impose complex, stringent and costly compliance activities, including but not limited to environmental, health and safety protection standards and permitting, labeling, and other requirements regarding, among other things, electronic and wireless communications, air emissions, wastewater discharges, the use, handling and disposal of hazardous or toxic materials, remediation of environmental contamination, product regulatory regulations and standards such as electronic emissions, radio and other communications regulations, and product safety, communications regulations, producer responsibility and sustainability laws including those mandating disclosure requirements for e-waste, packaging, emissions and batteries, anti-money-laundering and anti-corruption, taxation, trade, import and export, antitrust and competition law concerns, data security, data transfers, data protection and data privacy, consumer protection and regulations regarding labor, employment and benefits matters. We may also be affected by future standards, laws or regulations, including those imposed in response to cybersecurity, artificial intelligence, energy, decarbonization, climate change, product functionality, geopolitical, corporate social responsibility, data privacy, accuracy of third-party product data information, new types of online advertising, telecommunications regulations, product safety and liability risks or similar concerns. We expect that the growth of our business may depend on our development of new technologies in response to such regulations and laws. These standards, laws or regulations may further impact our costs of operation, the sourcing of raw materials and the manufacture, design, redesign and distribution of our products and place restrictions and other requirements on the products and services we can sell. The net revenue and margins of our business are directly impacted by government regulations, including safety, performance, and product certification regulations, particularly those driven by customer demands, as well as changes in trade agreements, tariffs and environmental and energy efficiency standards. We have in the past been, and may in the future be, subject to various claims, including legal and regulatory claims arising in the normal course of business. Such claims may include without limitation employment and benefits, product recall, personal injury, network security, consumer law, breaches of or other non-compliance with cybersecurity, artificial intelligence, data transfers, data protection, data privacy or advertising and marketing regulations, or property damage claims resulting from the use of our products, services or solutions, as well as exposure to hazardous materials, contract disputes or intellectual property disputes. The actual costs of resolving legal claims may be substantially higher or lower than the level of insurance coverage we hold and/or the amounts accrued for such claims or may be excluded from coverage. In the event of unexpected future developments, it is possible that the ultimate resolutions of such matters could be unfavorable.

Various laws and regulations as well as contracts we have entered into with third parties apply to the collection, processing, transfer, disposal, disclosure, and security of personal data and other types of regulated data, including obligations concerning clear, accurate, and transparent data use practices and advertising that is not misleading.

We cannot predict with certainty the outcome of litigation matters, government proceedings or other contingencies and uncertainties.

In the ordinary course of business, we may make certain commitments, including representations, warranties and indemnities relating to current and past operations and issue guarantees of third-party obligations. We have in the past and may in the future be subject to various lawsuits, investigations or disputes arising out of the conduct of our business, including matters relating to public disclosure and reporting, commercial transactions, government contracts, competition and consumer law claims, product liability, marketing, prior acquisitions and divestitures, compliance with laws, labor and employment, employee benefit plans, intellectual property and the environment, health and safety. We have incurred, and may continue to incur, significant costs in connection with some or all of these matters.

While we maintain or may otherwise have access to insurance for certain risks, certain risks may be excluded and the amount of our insurance coverage may not be adequate to cover the total amount of all insured claims, legal fees, costs and liabilities and we may have to satisfy high insurance retentions. The incurrence of significant liabilities for which there is no or insufficient insurance coverage (or where there is available insurance but high retention levels) could adversely affect our liquidity and financial condition, results of operations and cash flows.

Risks Relating to the Spin-Off and Our Relationship with Resideo

We have no history of operating as a separate, publicly traded company, and our historical and pro forma financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.

The historical information about us in this information statement refers to our businesses as operated by and integrated with Resideo, and our historical and pro forma financial information included in this information statement is derived from the combined financial results and accounting records of Resideo. The unaudited pro forma combined financial results included in this information statement are presented for informational purposes only and are not necessarily indicative of what our actual financial condition or results of operations would have been had the Spin-Off been completed on the dates indicated. The assumptions used in preparing the pro forma financial information may not prove to be accurate and other factors may affect our financial condition or results of operations. Accordingly, the historical and pro forma financial information included in this information statement does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during the periods presented or those that we will achieve in the future primarily as a result of the factors described below:

Other significant changes may occur in our cost structure, management, financing and business operations as a result of operating as a company separate from Resideo. For additional information about the past financial performance of our businesses and the basis of presentation of the historical combined financial statements and the unaudited pro forma combined financial results of our businesses, please refer to the sections entitled “Unaudited Pro Forma Combined Financial Statements,” “Summary Historical and Unaudited Pro Forma Combined Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the combined financial statements and accompanying notes included elsewhere in this information statement.

Following the Spin-Off, we could incur substantial additional costs and experience temporary business interruptions.

We have historically operated as part of Resideo, and Resideo has provided us with various corporate functions. Following the Spin-Off, Resideo will not provide us with assistance other than those described under “Certain Relationships and Related Person Transactions.” These services do not include every service that we have received from Resideo in the past, and Resideo is only obligated to provide the transition services for limited periods following completion of the Spin-Off. Following the Spin-Off and the cessation of any transition services agreements, we will need to provide internally or obtain from unaffiliated third parties the services we will no longer receive from Resideo. We may be unable to replace these services in a timely manner or on terms and conditions as favorable as those we receive from Resideo, and we may incur substantially higher costs than currently anticipated as a result of the transition.

In connection with the separation into two public companies, each of Resideo and ADI will indemnify each other for certain liabilities. If we are required to pay under these indemnities to Resideo, our financial results could be negatively impacted. In addition, there can be no assurance that the Resideo indemnities will be sufficient to insure us against the full amount of liabilities for which Resideo will be allocated responsibility, or that Resideo’s ability to satisfy its indemnification obligation will not be impaired in the future.

Pursuant to the separation agreement and certain other agreements with Resideo, each party will agree to indemnify the other for certain liabilities, whether incurred prior to or after the Spin-Off, in each case for uncapped amounts, as discussed further in “Certain Relationships and Related Person Transactions.” Indemnities that we may be required to provide Resideo are not subject to any cap, may be significant and could negatively impact our business. Any amounts we are required to pay pursuant to these indemnification obligations and other liabilities could require us to divert cash that would otherwise have been used in furtherance of our operating business.

Further, third parties could also seek to hold us responsible for any of the liabilities that Resideo has agreed to retain, and there can be no assurance that the indemnity from Resideo will be sufficient to protect us against the full amount of such liabilities, or that Resideo will be able to fully satisfy its indemnification obligations.

In addition, Resideo’s insurance will not necessarily be available to us for liabilities associated with occurrences of indemnified liabilities prior to the Spin-Off, and in any event Resideo’s insurers may deny coverage to us for liabilities associated with certain occurrences of indemnified liabilities prior to the Spin-Off. Moreover, even if we ultimately succeed in recovering from Resideo or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses. Each of these risks could negatively affect our businesses, financial position, results of operations and cash flows.

If the distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, or if certain internal restructuring transactions do not qualify as transactions that are generally tax-free for applicable tax purposes, we, as well as Resideo and Resideo’s common stockholders, could incur significant U.S. federal income tax liabilities and, in certain circumstances, we could be required to indemnify Resideo for material amounts of taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement. We will also join Resideo’s tax matters agreement with Honeywell, which could require us to indemnify Honeywell for certain material taxes and other related amounts.

The distribution, together with certain related transactions, is intended to qualify as a tax-free “reorganization” under Sections 368(a)(1)(D) and 355 of the Code, and certain internal restructuring transactions are intended to qualify as tax-free for applicable tax purposes. It is a condition to the distribution that Resideo receive a private letter ruling from the IRS and/or an opinion of its outside tax advisors satisfactory to the Resideo board of directors and that such private letter ruling and/or opinion not be withdrawn, rescinded or materially modified; these are separate conditions that the Resideo board may waive in its sole discretion. The IRS private letter ruling and/or opinion will rely on facts, assumptions, representations, statements and undertakings by Resideo and us regarding, among other things, historical and future conduct; if any are inaccurate, incomplete, not satisfied or violated, Resideo may not be able to rely on the IRS private letter ruling and/or the opinion. Notwithstanding any IRS private letter ruling and/or opinion, an IRS audit could determine that the distribution or related transactions are taxable if any of the facts, assumptions, representations, statements or undertakings upon which the ruling or the opinion were based are not correct or have been violated, or if the IRS disagrees with any of the conclusions in the opinion, or for other reasons, including due to changes in facts or post-distribution actions (such as changes in stock ownership), and a court could sustain such a challenge. If the distribution or any related or internal restructuring transaction is taxable, Resideo and/or its stockholders, and we, could incur significant U.S. federal income tax liabilities; in addition, Resideo, we and our respective subsidiaries may incur material tax costs, including non-U.S. taxes, in connection with the reorganization transactions. For a discussion of the tax consequences of the distribution, together with certain related transactions, please refer to the section entitled “Material U.S. Federal Income Tax Consequences.”

Under the tax matters agreement, we generally must indemnify Resideo for taxes and related amounts resulting from (a) any inaccuracy or breach of our representations, covenants or undertakings in spin-off related agreements or in documents relating to the IRS ruling or tax opinion, (b) an acquisition of any portion of our equity securities or assets, whether by merger or otherwise and whether or not we participate in or facilitate the transaction, or (c) any other action or failure to act by us. For example, if we or our stockholders engage in transactions that result in a 50% or greater change (by vote or value) in ownership of our stock during the four-year period beginning two years before the spin-off, the spin-off would generally be taxable to Resideo under Section 355(e) (though not to Resideo common stockholders) unless established not to be part of a plan or series of related transactions. In that event, Resideo would recognize gain equal to the excess of the fair market value of our common stock distributed over Resideo’s tax basis in such stock, and we would generally be required to indemnify Resideo for the tax on such gain and related expenses. Any such liabilities and indemnification obligations could be material and could adversely affect our business, financial condition, cash flows and results of operations.

In addition, we will join the tax matters agreement that Resideo executed with Honeywell on October 19, 2018 (the “2018 TMA”) in connection with the separation of Resideo from Honeywell (the “Resideo Spin-Off”) and agree to become bound by the terms and conditions thereof as though an original party thereto. The 2018 TMA provides, among other things, that the joining party will be required to indemnify Honeywell for any taxes (and reasonable expenses) resulting from the failure of the Resideo Spin-Off and related internal transactions to qualify for their intended tax treatment under U.S. federal, state and local income tax law, as well as foreign tax law, where such taxes result from (a) breaches of covenants and representations made and agreed to in connection with the Resideo Spin-Off, (b) the application of certain provisions of U.S. federal income tax law to these transactions or (c) any other action or omission (other than actions expressly required or permitted by the related transaction agreements) that gives rise to these taxes. If Honeywell recovers amounts due from us that were attributable to Resideo’s business, we would need to seek to recover such amounts from Resideo.

For more information, please refer to the section entitled “Certain Relationships and Related Person Transactions—Agreements with Resideo” and “Certain Relationships and Related Person Transactions—Tax Matters Agreements.”

We may be affected by significant restrictions following the distribution, including on our ability to engage in certain desirable capital-raising, strategic or other corporate transactions, pursuant to the agreements we will enter into with Resideo, including the tax matters agreement.

Under current U.S. federal income tax law, a spin-off that otherwise qualifies for tax-free treatment can be rendered taxable to the parent corporation and its stockholders as a result of certain post-spin-off transactions, including certain acquisitions of shares or assets of the spun-off corporation. For example, a spin-off may result in taxable gain to the parent corporation under Section 355(e) of the Code if it were later deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, shares representing a 50 percent or greater interest (by vote or value) in the spun-off corporation. To preserve the tax-free treatment for U.S. federal income tax purposes of the distribution and certain related transactions, and in addition to our indemnity obligations described above, under the tax matters agreement that we will enter into with Resideo, we will be restricted from taking any action that prevents the distribution, together with certain related transactions, from being tax-free for U.S. federal income tax purposes. Under the tax matters agreement, for the two-year period following the distribution, we will be subject to specific restrictions on our ability to enter into certain acquisition, merger, liquidation, sale and stock redemption transactions with respect to our stock. Moreover, we will be subject to restrictions on discontinuing the active conduct of our trade or business, the issuance or sale of stock or other securities (including securities convertible into our stock but excluding certain compensatory arrangements) and sales of assets outside the ordinary course of business. Further, the tax matters agreement will impose similar restrictions on us and our subsidiaries that are intended to prevent certain transactions undertaken as part of the Reorganization Transactions from failing to qualify for their intended tax treatment. These restrictions may limit our ability to pursue certain strategic transactions or other transactions that we may believe to be in the best interests of our stockholders or that might increase the value of our business and may reduce our strategic and operating flexibility. In addition, under the tax matters agreement, we may be required to indemnify Resideo against any such tax liabilities as a result of the acquisition of our stock or assets, even if we do not participate in or otherwise facilitate the acquisition. For more information, please refer to the section entitled “Certain Relationships and Related Person Transactions—Agreements with Resideo” and “Certain Relationships and Related Person Transactions— Tax Matters Agreements.”

After the distribution, certain of our executive officers and directors may have actual or potential conflicts of interest because of their equity interest in Resideo.

Because of their current or former positions with Resideo, certain of our executive officers and directors may own equity interests in Resideo. Continuing ownership of shares of Resideo common stock and/or equity awards, as applicable, could create, or appear to create, potential conflicts of interest if we and Resideo face decisions that could have implications for both Resideo and us, after the Spin-Off. For example, potential conflicts of interest could arise in connection with the resolution of any dispute between Resideo and us regarding the terms of the agreements governing the distribution and the relationship with Resideo thereafter. These agreements include the separation agreement, transition services agreement, employee matters agreement, tax matters agreement, intellectual property matters agreement and any commercial agreements between the parties or their affiliates. Potential conflicts of interest may also arise out of any commercial arrangements that we may enter into with Resideo in the future. Our certificate of incorporation will provide that, subject to any contractual provision to the contrary, Resideo and its directors and officers will have no obligation to refrain from engaging in the same or similar business activities or lines of business as we do or doing business with any of our clients or customers. This could further exacerbate any conflicts of interest as neither Resideo nor any officer or director of Resideo will be liable to us or to our stockholders for breach of any fiduciary duty by reason of any of these activities.

As we will not have a non-competition agreement with Resideo, Resideo may compete directly with us, which may adversely affect our businesses.

We will not have a non-competition agreement with Resideo and Resideo will not be restricted from competing with us. If Resideo in the future decides to engage in the type of business we conduct, it may have a competitive advantage over us, which may cause our business, financial condition and results of operations to be materially adversely affected.

We may not achieve some or all of the expected benefits of the Spin-Off, and the Spin-Off may adversely affect our businesses.

We may not be able to achieve the full strategic and financial benefits expected to result from the Spin-Off, or such benefits may be delayed or not occur at all. The Spin-Off is expected to provide the following benefits, among others:

We may not achieve these and other anticipated benefits for a variety of reasons, including, among others:

If we fail to achieve some or all of the benefits expected to result from the Spin-Off, or if such benefits are delayed, our businesses, operating results and financial condition could be adversely affected.

In connection with the Spin-Off, we will enter into a series of transaction agreements which will allocate assets and liabilities, establish indemnification obligations and govern the provision of critical services between us and Resideo.

We will depend on a series of transaction agreements with Resideo following the Spin-Off, including the separation agreement, transition services agreement, employee matters agreement, tax matters agreement, intellectual property matters agreement, a commercial product purchase agreement and related reorganization documents. Our business could be adversely affected if we or Resideo do not perform these agreements as expected, if required consents are not obtained, or when such agreements expire.

While we believe these agreements reflect reasonable commercial terms, because they will be negotiated while we are a wholly-owned subsidiary of Resideo and before we have an independent board of directors and management team, the terms of such agreements may not reflect those that would have been obtained in negotiations with an unaffiliated third party, and we might have achieved more favorable terms in other circumstances. Prior to the distribution and separation, the Resideo board of directors will have the sole and absolute discretion to determine and change the terms of the Spin-Off, including the establishment of the record date for the distribution and the distribution date. These changes could be unfavorable to us. In addition, the Resideo board of directors, in its sole and absolute discretion, may decide not to proceed with the distribution at any time prior to the distribution date.

We will rely on Resideo to perform and pay amounts due under these agreements, including its indemnification obligations. If Resideo fails or is unwilling to perform, we could experience operational disruptions, incur unanticipated costs or losses, or be required to seek alternative arrangements on less favorable terms. For example, under the transition services agreement, we will rely on Resideo for certain corporate and shared services for a limited period. Even if Resideo does perform under the terms of the transition services agreement, these services may not fully meet our needs, our ability to change or reprice them will be limited, and, upon expiration, we may be unable to replace them on comparable terms, which could increase our costs or impair service quality. We will also be obligated to provide certain services to Resideo during the transition period, which could divert management attention and resources from our operations.

The transfer to us of contracts, permits and other assets contemplated by the separation agreement may require third-party or governmental consents or provide counterparties with rights that delay, condition or prevent transfer of such assets to us. In some cases, we and Resideo are joint beneficiaries of existing contracts and will need counterparties’ consent to split or assign relevant portions of the contracts. Counterparties may seek to terminate or renegotiate such arrangements on adverse terms or require credit support. If required consents are not obtained on a timely basis, we may not receive the intended benefits of the contracts and permits allocated to us under the separation agreement, and we may need to secure alternative arrangements that could be more costly or of lower quality, which could negatively affect our business, financial condition, results of operations and cash flows.

As these agreements expire, we will need to establish our own systems and services or third-party replacements. Implementing and transitioning to new systems and functions, including information technology, finance, tax, treasury, internal audit, investor relations and other corporate capabilities, is complex, time-consuming and costly. We may not complete these implementations or data transitions on schedule or at expected cost, and any failure or downtime in our systems or in the services Resideo provides during the transition could impair our ability to operate effectively, including paying suppliers and employees, executing transactions and timely performing administrative and financial processes, which could adversely affect our profitability. For more information on our transaction agreements with Resideo, please refer to the section entitled “Certain Relationships and Related Person Transactions.”

Our inability to resolve favorably any disputes that arise between us and Resideo with respect to our past and ongoing relationships may adversely affect our operating results.

Disputes may arise between Resideo and us in a number of areas relating to our ongoing relationships, including:

We may not be able to resolve potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party.

Resideo’s plan to separate into two independent, publicly traded companies is subject to various risks and uncertainties and may not be completed in accordance with the expected plans or anticipated timeline, or at all, and will involve significant time and expense, which could disrupt or adversely affect our business.

Resideo’s separation into two independent, publicly traded companies is complex in nature, and unanticipated developments or changes, including changes in the law, the macroeconomic environment, competitive conditions of Resideo’s markets, regulatory approvals or clearances, the uncertainty of the financial markets and challenges in executing the Spin-Off, could delay or prevent the completion of the proposed Spin-Off, or cause the Spin-Off to occur on terms or conditions that are different or less favorable than expected. Additionally, the Resideo board of directors, in its sole and absolute discretion, may decide not to proceed with the distribution at any time prior to the distribution date.

The process of completing the proposed Spin-Off has been and is expected to continue to be time- consuming and involves significant costs and expenses. The Spin-Off costs may be significantly higher than what we currently anticipate and may not yield a discernible benefit if the Spin-Off is not completed or is not well executed, or if the expected benefits of the Spin-Off are not realized. Executing the proposed Spin-Off will also require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing our business. Other challenges associated with effectively executing the Spin-Off include attracting, retaining and motivating employees during the pendency of the Spin-Off and following its completion; addressing disruptions to our supply chain, manufacturing, sales and distribution and other operations resulting from separating Resideo into two independent companies; and separating Resideo’s information systems.

As of the date of this information statement, we expect to have outstanding indebtedness at the closing of the Spin-Off of approximately $1.0 billion and the ability to draw additional indebtedness of $500 million under the committed revolving facility under the debt instruments that we expect to be in place upon consummation of the Spin-Off, and in the future we may incur additional indebtedness. This indebtedness could adversely affect our businesses and our ability to meet our obligations and pay dividends.

As of the date of this information statement, we expect to have outstanding indebtedness at the closing of the Spin-Off of approximately $1.0 billion, and have the ability to draw additional indebtedness of $500 million under the debt instruments that we expect to be in place upon consummation of the Spin-Off. See the section entitled “Description of Material Indebtedness.” This debt could have important, adverse consequences to us and our investors, including:

Our cash flow from operations may not be sufficient to service our outstanding debt or to repay the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to service or refinance our debt.

We may require additional capital in the future to finance our growth and development, upgrade and improve our distribution networks and further our marketing and sales activities, satisfy regulatory and environmental compliance obligations and national approvals requirements, fund acquisitions, pay ADI preferred stock dividends to the extent we choose to settle these dividends in cash and meet general working capital needs. If we incur additional debt, the risks described above could increase. In addition, incurrence of additional indebtedness may result in our failure to maintain credit ratings from independent rating agencies, would adversely affect our cost of capital and could adversely affect our liquidity and access to the capital markets. If our access to capital were to become constrained significantly, or if costs of capital increased significantly, due to lowered credit ratings, increased interest rates, prevailing business conditions, financial leverage, the volatility of the capital markets, decreased investor interest or other factors, our business, financial condition, results of operations and cash flows could be adversely affected and our ability to fund future development and acquisition activities could be impacted. In addition, our actual cash requirements in the future may be greater than expected. Our cash flow from operations may not be sufficient to service our outstanding debt or to repay the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to service or refinance our debt. See “Capitalization,” “Unaudited Pro Forma Combined Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity” and “Description of Material Indebtedness.”

The agreements governing our indebtedness will contain restrictions that may limit our flexibility in operating our business.

In connection with the Spin-Off, we expect to incur indebtedness in an aggregate principal amount of approximately $1.0 billion, which we expect to be governed by a credit agreement and an indenture. The terms of such indebtedness are subject to change and will be finalized prior to the closing of the Spin-Off. However, we expect the terms of such credit agreement and indenture to contain covenants that limit our ability to engage in specified types of transactions. These covenants may include restrictions on actions such as:

As a result of these restrictions, we may be limited in how we conduct our business and pursue our strategy, unable to raise additional debt financing to operate during general economic or business downturns or unable to compete effectively or to take advantage of new business opportunities. If market changes, economic downturns or other negative events occur, our ability to comply with these covenants may be impaired. A breach of any of these covenants could result in an event of default under the terms of our indebtedness, giving lenders or holders the right to accelerate the repayment of such debt, which could adversely affect our business, financial condition, results of operations and cash flows. To the extent we have granted collateral to secure the obligations under such indebtedness, the lenders or holders thereof could foreclose on such collateral. For additional information regarding the debt financing, please refer to the section entitled “Description of Material Indebtedness.”

Risks Relating to Our Common Stock and the Securities Market

We cannot be certain that an active trading market for our common stock will develop or be sustained after the Spin-Off, and following the Spin-Off, the stock price of our common stock may fluctuate significantly.

Prior to the completion of the Spin-Off, there has been no public market for our common stock. We anticipate that on or prior to the record date for the distribution, trading of shares of our common stock will begin on a “when-issued” basis and will continue through the distribution date. However, we cannot guarantee that an active trading market will develop or be sustained for our common stock after the Spin-Off, nor can we predict the prices at which shares of our common stock may trade after the Spin-Off. If an active trading market does not develop, you may have difficulty selling your shares of our common stock at an attractive price, or at all. In addition, we cannot predict the prices at which shares of our common stock may trade after the Spin-Off or whether the combined market value of share(s) of our common stock and one share of Resideo common stock will be less than, equal to or greater than the market value of one share of Resideo common stock prior to the distribution.

Until the market has fully evaluated Resideo’s businesses without ADI, the price at which each share of Resideo common stock trades may fluctuate more significantly than might otherwise be typical, even with other market conditions, including general volatility, held constant. Similarly, until the market has fully evaluated our business as a stand-alone entity, the prices at which shares of our common stock trade may fluctuate more significantly than might otherwise be typical, even with other market conditions, including general volatility, held constant. The increased volatility of our stock price following the distribution may have a material adverse effect on our business, financial condition and results of operations.

The market price of our common stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including:

Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These broad market fluctuations may adversely affect the trading price of our common stock.

There may be substantial and rapid changes in our stockholder base, which may cause our stock price to fluctuate significantly.

Many investors holding shares of Resideo common stock may hold that stock because of a decision to invest in a company with Resideo’s profile. Following the Spin-Off, the shares of ADI common stock held by those investors will represent an investment in a company with a different profile. This may not be aligned with a holder’s investment strategy and may cause the holder to sell the shares rapidly. As a result, the price of ADI common stock may decline or experience volatility as ADI’s stockholder base changes.

A significant number of shares of our common stock are or will be eligible for future sale and expected to be freely tradable without restriction, which may cause the market price of our common stock to decline.

Upon completion of the separation and distribution, ADI will have an aggregate of approximately       shares of common stock outstanding. Other than shares held by our affiliates, we expect that virtually all of those shares will be freely tradable without restriction or registration under the Securities Act. We are unable to predict whether large amounts of ADI common stock will be sold in the open market following the Spin-Off. We are also unable to predict whether a sufficient number of buyers of ADI common stock with demand for shares of ADI common stock will exist to purchase such shares of ADI common stock at attractive prices. It is possible that Resideo common stockholders will sell the shares of ADI common stock they receive in the distribution for various reasons. For example, such stockholders may not believe that ADI’s business profile or its level of market capitalization as an independent company fits their investment objectives. The sale of significant amounts of ADI common stock or the perception in the market that this will occur may lower the market price of ADI common stock.

If we are unable to implement and maintain effective internal control over financial reporting or disclosure controls and procedures in the future, investors may lose confidence in the accuracy and completeness of our financial reports and other market disclosures and the market price of our common stock may be negatively affected.

Our financial results previously were included within the combined results of Resideo, and we believe that our reporting and control systems were appropriate for those of subsidiaries of a public company.

However, we were not directly subject to the reporting and other requirements of the Exchange Act. As a result of the distribution, we will be directly subject to reporting and other obligations under the Exchange Act, including the requirements of Section 404 of the Sarbanes-Oxley Act, which will require annual management assessments of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm addressing these assessments. In addition, our independent registered public accounting firm will be required to express an opinion as to the effectiveness of our internal control over financial reporting. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating. In addition, under the Sarbanes Oxley Act, we will also be required to maintain effective disclosure controls and procedures, where previously such controls and procedures were included within Resideo. These reporting and other obligations will place significant demands on our management and administrative and operational resources, including accounting resources. We may not have sufficient time following the Spin-Off to meet these obligations by the applicable deadlines.

The process of designing, implementing and testing the internal control over financial reporting and disclosure controls and procedures required to comply with these obligations is time consuming, costly and complicated. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or to assert that our internal control over financial reporting or disclosure controls and procedures are effective or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could limit ADI’s ability to access the global capital markets and could have a material adverse effect on our business, financial condition, results of operations, cash flows or the market price of ADI securities.

Moreover, even if we were to conclude, and our auditors were to concur, that following the Spin-Off our internal control over financial reporting provided reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, because of its inherent limitations, internal control over financial reporting might not prevent or detect fraud or misstatements. This, in turn, could have an adverse impact on trading prices for shares of our common stock, and could adversely affect our ability to access the capital markets.

We cannot guarantee the payment of dividends on our common stock, or the timing or amount of any such dividends.

We have not yet determined whether or the extent to which we will pay any dividends on our common stock. The payment of any dividends in the future, and the timing and amount thereof, to our stockholders will fall within the discretion of our Board. The Board’s decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our then existing debt agreements, industry practice, legal requirements and other factors that the Board deems relevant. For more information, please refer to the section entitled “Dividend Policy.” Our ability to pay dividends will depend on our ongoing ability to generate cash from operations and on our access to the capital markets. We cannot guarantee that we will pay a dividend in the future or continue to pay any dividends if we commence paying dividends.

Your percentage ownership in us may be diluted in the future.

In the future, your percentage ownership in us may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including equity awards that we will be granting to our directors, officers and employees in connection with the Spin-Off. See the section entitled “Executive Compensation—Compensation Discussion and Analysis—Treatment of Outstanding Equity Awards Resulting from the Distribution.” As of the date of this information statement, the exact number of shares of our common stock that will be subject to such equity awards is not determinable, and, therefore, it is not possible to determine the extent to which your percentage ownership in us could be diluted as a result of the grant of such equity awards. In addition, it is anticipated that our Compensation Committee will grant additional equity awards to our employees and directors after the distribution, from time to time, under our equity compensation plans. These additional awards will have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock.

In addition, our certificate of incorporation will authorize us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as the Board generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, we could grant the holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences that we could assign to holders of preferred stock could affect the residual value of our common stock. Please refer to the section entitled “Description of Capital Stock” and to “Risks Relating to Our Common Stock and the Securities Market—The ADI preferred stock we expect to issue in connection with the Spin-Off will have rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stock and will reduce the relative voting power of the holders of our common stock.”

The ADI preferred stock we expect to issue in connection with the Spin-Off will have rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stock and will reduce the relative voting power of the holders of our common stock.

In connection with the Spin-Off, Resideo will enter into an exchange agreement (the “Exchange Agreement”) with the Preferred Stockholders providing for the exchange by the Preferred Stockholders of shares of Resideo preferred stock held by them for shares of ADI preferred stock. See “Certain Relationships and Related Person Transactions—Exchange Agreement, Shareholders Agreement and ADI Preferred Stock Exchange” and “Description of Capital Stock.” We have approved the ADI preferred stock exchange and CD&R Holdings as an “interested stockholder” for purposes of Section 203 of the DGCL such that, without limiting the standstill to which CD&R Holdings is subject, Section 203 of the DGCL will not be applicable to any business combination with CD&R Holdings.

The ADI preferred stock will rank senior to the shares of our common stock with respect to dividend rights and with respect to rights on liquidation, winding-up and dissolution. Holders of shares of ADI preferred stock will be entitled to cumulative dividends which are payable quarterly in arrears, will accrue on a daily basis from the issuance date of such shares and are payable at the Company’s option either (i) in cash or (ii) in kind (by adding the dividend to the Accumulated Amount (as defined in the ADI Certificate of Designations) of such shares), at a rate of 7.00% per annum, subject to adjustment as described elsewhere in this information statement and as set forth in the ADI Certificate of Designations a form of which has been attached as an exhibit to this information statement. Holders of ADI preferred stock are also entitled to receive certain dividends declared or paid on the Company common stock on an as-converted basis. No dividends will be payable to holders of shares of Company common stock unless the full dividends are paid at the same time to the holders of the ADI preferred stock. See “Certain Relationships and Related Person Transactions—Exchange Agreement, Shareholders Agreement and ADI Preferred Stock Exchange.”

Certain of the preferential rights belonging to the ADI preferred stock could result in divergent interests between the holders of the ADI preferred stock and our common stockholders. In addition, our obligations to pay regular dividends to the holders of the ADI preferred stock (which we may elect to pay in cash or in-kind) or the exercise of any of our optional redemption rights with respect to the outstanding ADI preferred stock could, if paid in cash, impact our liquidity and reduce the amount of cash available for working capital, capital expenditures, growth opportunities, acquisitions and other general corporate purposes.

The CD&R Group will hold a significant equity interest in our business and may exercise influence over us, including through its ability to designate up to two directors to our Board, and its interests as a preferred equity holder may diverge from, or even conflict with, the interests of the other holders of our common stock.

The CD&R Group will beneficially own shares of our common stock and ADI preferred stock, which, taken together on an as-converted basis, will represent approximately      % of our total voting power upon completion of the Spin-Off. As a result, the CD&R Group may have the indirect ability to influence our policies and operations. In addition, under the ADI Certificate of Designations, the CD&R Group is entitled to appoint up to two directors to our Board, subject to specified minimum ownership requirements. Both Nathan Sleeper and William Galvin are currently expected to serve as directors upon completion of the Spin-Off. With such representation on our Board, the CD&R Group has influence over the appointment of management and any action requiring the vote of our board of directors, including significant corporate action such as mergers and sales of substantially all of our assets. Additionally, for so long as the Preferred Stockholders own ADI preferred stock, certain matters will require the approval of the Preferred Stockholders, including: (1) amendments to our certificate of incorporation, the certificate of designations for the ADI preferred stock or our bylaws that would alter or change the terms or the powers, preferences, rights or privileges of the ADI preferred stock as to affect them adversely; (2) authorizing, creating, increasing the authorized amount of or issuing any class or series of equity securities that rank senior to or on par with the ADI preferred stock; (3) increasing or decreasing the authorized number of shares of ADI preferred stock; (4) amending certain debt financing documents to include limitations on our ability to accrue dividends on the preferred stock that are more restrictive in any material respect than those set forth in our existing debt financing documents; or (5) adopting any plan of liquidation or filing any voluntary petition for bankruptcy, receivership or any similar proceeding. The CD&R Group is in the business of making or advising on investments in companies, including businesses that may directly or indirectly compete with certain portions of our business. In addition, the CD&R Group may have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their overall equity investment and have a negative impact on holders of our common stock as a whole. See “Certain Relationships and Related Person Transactions—Exchange Agreement, Shareholders Agreement and ADI Preferred Stock Exchange.”

Certain provisions in our certificate of incorporation and bylaws, and of Delaware law, may prevent or delay an acquisition of our company, which could decrease the trading price of our common stock.

Our certificate of incorporation and bylaws will contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospective acquirers to negotiate with the Board rather than to attempt an unsolicited takeover not approved by the Board. These provisions include, among others:

In addition, because we have not chosen to be exempt from Section 203 of the DGCL, this provision could delay or prevent a change of control that our stockholders may favor. Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with a person that acquires, more than 15% of the outstanding voting stock of a Delaware corporation (an “interested stockholder”) shall not engage in any business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which the person became an interested stockholder, unless (i) prior to such time, the board of directors of such corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (ii) upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of such corporation at the time the transaction commenced (excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) the voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender or vote stock held by the plan); or (iii) on or subsequent to such time the business combination is approved by the board of directors of such corporation and authorized at a meeting of stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock of such corporation not owned by the interested stockholder.

We believe these provisions will protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with the Board and by providing the Board with more time to assess any acquisition proposal. These provisions are not intended to make our company immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that the Board determines is not in the best interests of our company and our stockholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

Our certificate of incorporation will provide for an exclusive forum in the Court of Chancery of the State of Delaware for certain disputes between us and our stockholders, and that the federal district courts of the United States will be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act.

Our certificate of incorporation will provide that: (i) unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have, or declines to accept, jurisdiction, the federal court for the District of Delaware) will be the sole and exclusive forum for any current or former stockholder (including a current or former beneficial owner) to bring: (A) any derivative action or proceeding brought on our behalf, (B) any action, suit or proceeding asserting a claim that is based upon a violation of a duty owed by any of our current or former directors, officers or stockholders to us or our stockholders, (C) any action, suit or proceeding asserting a claim against us, or any of our current or former directors, officers or stockholders arising pursuant to any provision of the DGCL (or any successor provision thereto), our certificate of incorporation or bylaws (as either may be amended from time to time), (D) any action, suit or proceeding asserting a claim related to or involving us that is governed by the internal affairs doctrine or (E) any action, suit or proceeding asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL; (ii) unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act; (iii) any person or entity purchasing or otherwise acquiring or holding any interest in shares of our capital stock will be deemed to have notice of and consented to these provisions; and (iv) failure to enforce the foregoing provisions would cause us irreparable harm, and we will be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions.

The choice of forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our current or former directors, officers, other employees, agents or stockholders, which may discourage such claims against us or any of our current or former directors, officers, other employees, agents or stockholders and result in increased costs for investors to bring such a claim. We believe these provisions may benefit us by providing increased consistency in the application of the DGCL and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums, and protection against the burdens of multi-forum litigation. While the Delaware courts have found similar choice of forum provisions to be facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in such provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. If a court were to find the choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, results of operations, financial condition and prospects.

The combined post-Spin-Off value of one share of Resideo common stock and       share(s) of ADI common stock may not equal or exceed the pre-distribution value of one share of Resideo common stock.

As a result of the Spin-Off, we expect the trading price of shares of Resideo common stock immediately following the Spin-Off to be different from the “regular-way” trading price of Resideo common stock immediately prior to the Spin-Off because the trading price will no longer reflect the value of ADI. There can be no assurance that the aggregate market value of one share of Resideo common stock and                share(s) of ADI common stock following the Spin-Off will be higher than, lower than or the same as the market value of a share of Resideo common stock if the Spin-Off did not occur.

General Risk Factors

We depend on the recruitment and retention of qualified personnel, and our failure to attract and retain such personnel could adversely affect our business, financial condition, results of operations and cash flows.

Our future performance is highly dependent upon the continued services of our employees and management who have significant industry expertise, including our IT, software, e-commerce operations, supplier management relations, engineering and design personnel and trained sales force. Our performance is also dependent on the development of additional personnel and the hiring of new qualified personnel for our operations. Competition for qualified personnel in our markets is intense; many locations in which we operate have seen competition for talent and increases in wages, and we may not be successful in attracting or retaining qualified personnel. While none of our U.S. employees are currently covered by a collective bargaining agreement, any attempt by our employees to organize a labor union could also result in increased legal and other associated costs. The loss of key employees, our inability to attract new qualified employees or adequately train employees or the delay in hiring key personnel could negatively affect our business, financial condition, results of operations and cash flows. Additionally, as part of Resideo, we have been able to leverage Resideo’s historical reputation, performance and brand identity to recruit and retain key personnel to run and operate our business. As an independent, publicly traded company, we will need to develop new strategies, and it may be more difficult for us to recruit or retain such key personnel.

Our effective tax rate will be affected by factors including changes in tax rules, and in the interpretation and application of those rules, in the countries in which we operate.

Our future results of operations could be adversely affected by changes in the effective tax rate as a result of changes to the various statutory tax rates and rules to which we are subject and other factors outside our control. Our tax expense includes estimates of tax reserves and reflects other estimates and assumptions, including assessments of our future earnings which could impact the valuation of our deferred tax assets. Changes in tax laws or regulations may adversely impact our provision for income taxes. In December 2022, the European Union (EU) approved a directive requiring member states to incorporate a 15% global minimum tax into their respective domestic laws effective for fiscal years beginning on or after December 31, 2023. In addition, several non-EU countries have proposed and/or adopted legislation consistent with the global minimum tax framework, such as Switzerland. Important details of these minimum tax developments are still to be determined and, in some cases, enactment and timing remain uncertain. Based on current legislation and available guidance, we do not anticipate the Pillar Two global minimum tax to have a material impact on our financial condition, results of operations, cash flows or effective tax rate in this fiscal year. The Company continues to assess the overall impact of potential changes as developments occur, consistent with our practice of monitoring all tax law changes.

If our critical accounting estimates are based on assumptions that change or prove to be incorrect, our results of operations could fall below the expectations of our investors and securities analysts, resulting in a decline in the trading price of our common stock.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our combined financial statements appearing elsewhere in this information statement. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates.” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses. Significant estimates and judgments involve: revenue recognition, including revenue-related reserves; legal contingencies; valuation of our common stock and equity awards; income taxes; and sales and indirect tax reserves. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the market price of our common stock.

Our ability to raise capital in the future may be limited and our failure to raise capital may limit our ability to invest in strategic priorities and grow our business.

In the future, we could be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business. We may sell common stock, convertible securities and other equity securities in one or more transactions at prices and in a manner as we may determine from time to time. If we sell any such securities in subsequent transactions, investors in our common stock may be materially diluted. New investors in such subsequent transactions could gain rights, preferences and privileges senior to those of holders of our common stock. Debt financing, if available, may involve restrictive covenants and could reduce our operational flexibility or ability to achieve or maintain profitability. Additionally, our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, resulting from increased volatility in the trading markets, or otherwise. If we cannot raise funds on acceptable terms, we may be forced to raise funds on undesirable terms, our business may contract or we may be unable to grow our business or respond to competitive pressures, any of which could have an adverse effect on our business, financial condition, results of operations and prospects.

If our goodwill, other intangible assets and long-lived assets become impaired, we may be required to record a significant charge to earnings.

We test, at least annually, the carrying value of goodwill for impairment, as discussed in Note 7. Goodwill and Other Intangible Assets, net to the combined financial statements included elsewhere in this information statement. We review other intangible assets and long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of the assets may not be recoverable. The estimates and assumptions about future results of operations and cash flows made in connection with the impairment testing could differ from future actual results. If the assumptions used in our analysis are not realized or if there was an adverse change in facts and circumstances, it is possible that an impairment expense may need to be recorded in the future. If the fair value of our reporting units falls below their carrying amounts because of reduced operating performance, market declines, changes in the discount rate or other conditions, expenses for impairment may be necessary. Any such expenses may have a material negative impact on our results of operations. While we were a part of Resideo, for the years ended December 31, 2025, 2024 and 2023, there were no material impairment expenses taken.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS 

Certain statements included in this information statement, in other documents we file with or furnish to the SEC, in our press releases, webcasts, conference calls, materials delivered to stockholders and other communications, are “forward-looking statements” within the meaning of the U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including, without limitation, statements regarding: the separation; expected future financial and operating performance of, and future opportunities for, the Company following the separation; anticipated benefits of the separation; the tax treatment of the separation; leadership of the Company following the separation; tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions, divestitures, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; the effects of the separation or the distribution, if consummated, on our business; growth, declines and other trends in markets we sell into, including the expected impact of trade and tariff policies; new or modified laws, regulations and accounting pronouncements; impact of climate-related events or transition activities; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; impact of changes to tax laws; general economic and capital markets conditions, including expected impact of inflation or interest rate changes; impact of geopolitical events and other hostilities; the timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that we intend or believe will or may occur in the future. Terminology such as “believe,” “anticipate,” “will,” “should,” “could,” “intend,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to the risks and uncertainties set forth under “Risk Factors.”

Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Forward-looking statements speak only as of the date of the information statement, document, press release, webcast, call, materials or other communication in which they are made (or such earlier date as may be specified in such statement). Except to the extent required by applicable law, neither Resideo nor we assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.

DIVIDEND POLICY

We have not yet determined the extent to which we will pay any dividends on our common stock. However, we expect that we will be required to make preferred dividend payments under the expected terms of our ADI preferred stock in cash or in-kind. The payment of any dividends on our common stock in the future, and the timing and amount thereof, is within the discretion of the Board. The Board’s decisions regarding the payment of dividends on our common stock will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our then existing debt agreements, industry practice, legal requirements and other factors that our Board deems relevant. Our ability to pay dividends on our common stock will depend on our ongoing ability to generate cash from operations and on our access to the capital markets. We cannot guarantee that we will pay a dividend on our common stock in the future or continue to pay any dividends on our common stock if we commence paying dividends on our common stock.

CAPITALIZATION 

The following table sets forth our cash and equivalents and capitalization as of December 31, 2025:

The following table sets forth our cash and cash equivalents and capitalization as of December 31, 2025, on a historical basis and a pro forma basis, to give effect to the Spin-Off and the transactions related to the Spin-Off as further described under “Unaudited Pro Forma Combined Financial Statements,” as if they occurred on December 31, 2025. The cash and cash equivalents and capitalization information in the following table may not necessarily reflect what our cash and cash equivalents and capitalization would have been had we been operating as a standalone company as of December 31, 2025. In addition, the information below is not indicative of our future cash and cash equivalents and capitalization.

This table should be read in conjunction with “Unaudited Pro Forma Combined Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our combined financial statements and notes thereto included elsewhere in this information statement.

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS 

The following unaudited pro forma combined financial statements (the “unaudited pro forma combined financial statements”) consist of an unaudited pro forma combined statement of operations for the year ended December 31, 2025 and an unaudited pro forma combined balance sheet as of December 31, 2025.

These unaudited pro forma combined financial statements were derived from the Company’s historical combined financial statements included elsewhere in this information statement. The pro forma adjustments give effect to the Spin-Off and related transactions described in the section of this information statement entitled “The Separation and Distribution.” The unaudited pro forma combined Statement of Operations for the year ended December 31, 2025 gives effect to the Spin-Off and related transactions as if they had occurred on January 1, 2025, the first day of fiscal 2025. The unaudited pro forma combined balance sheet gives effect to the Spin-Off and related transactions as if they had occurred on December 31, 2025, our latest statement of financial position date. References to the “Company” or “ADI” in this section and in the following unaudited pro forma combined financial statements and our combined financial statements included in this information statement shall mean Resideo’s ADI Global Distribution business and references to “Resideo” shall mean Resideo Technologies, Inc.

The unaudited pro forma combined financial statements have been prepared to reflect transaction accounting and autonomous entity adjustments to present the financial condition and results of operations as if we were a separate stand-alone entity. In addition, the unaudited pro forma combined financial statements include a presentation of management adjustments that management believes are necessary to enhance an understanding of the pro forma effects of the transaction. The unaudited pro forma combined financial statements give effect to the following transactions, which we refer to as the “Pro Forma Transactions”:

The unaudited pro forma combined financial statements were prepared in accordance with Article 11 of Regulation S-X.

The unaudited pro forma combined financial statements are subject to the assumptions and adjustments described in the accompanying notes.

In connection with the separation, we expect to enter into a separation agreement, tax matters agreement, transition services agreement, commercial product purchase agreement, employee matters agreement and other transaction and shareholder related agreements with Resideo, pursuant to which Resideo and we will provide to each other certain specified services on a temporary basis, including various information technology, financial and administrative services. The charges for the transition services are based on arm’s length terms. Any incremental costs expected to be incurred from the transition services agreement are reflected as an autonomous entity adjustment.

Our historical combined financial statements, which were the basis for the unaudited pro forma combined financial statements, were prepared on a carve-out basis and were derived from Resideo’s historical accounting records as we did not operate as a separate, independent company for the periods presented. Accordingly, such financial information reflects an allocation of certain corporate costs, such as corporate executives, finance, legal, audit, mergers and acquisitions, human resources, information technology, insurance, employee benefits, and other expenses that are either specifically identifiable or clearly applicable to ADI Global Distribution. We believe that the methods used to allocate expenses are reasonable; however, the allocations may not be indicative of actual expenses that would have been incurred had we operated as an independent, publicly traded company for the periods presented. See Note 16. Related Party Transactions to the audited combined financial statements included elsewhere in this information statement for further information on the allocation of corporate costs.

The unaudited pro forma combined financial statements are based upon available information and assumptions, including those described in the accompanying notes, that we believe are reasonable and supportable given the information and estimates available at this time. However, these adjustments are subject to change as the terms of the Spin-Off are finalized. The unaudited pro forma combined financial statements have been presented for informational purposes only. The pro forma information is not necessarily indicative of our results of operations or financial condition had the Spin-Off and the related transactions been completed on the dates assumed and should not be relied upon as a representation of our future performance or financial position as a separate public company.

The following unaudited pro forma combined financial statements should be read in conjunction with our historical combined financial statements and accompanying notes included elsewhere in this information statement and the sections of this information statement entitled “Capitalization,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Certain Relationships and Related Person Transactions,” and “The Separation and Distribution.” For factors that could cause actual results to differ materially from those presented in the unaudited pro forma combined financial statements, see “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors” included elsewhere in this information statement.

ADI Global Distribution

UNAUDITED PRO FORMA COMBINED BALANCE SHEET
($ and shares in millions, except per share amounts)

See the accompanying notes to the unaudited pro forma combined financial statements.

ADI Global Distribution

UNAUDITED PRO FORMA COMBINED STATEMENTS OF EARNINGS

($ and shares in millions, except per share amounts)

See the accompanying notes to the unaudited pro forma combined financial statements.

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

For further information regarding the historical combined financial statements, please refer to the combined financial statements included elsewhere in this information statement. The unaudited pro forma combined balance sheet as of December 31, 2025 and unaudited pro forma combined statements of operations for the year ended December 31, 2025, include adjustments related to the following ($ in millions):

Transaction Accounting Adjustments:

The table below summarizes adjustments to Cash and cash equivalents:

The table below summarizes the pro forma adjustment to long-term debt:

The table below summarizes the pro forma adjustment to accrued liabilities:

Interest expense was calculated utilizing an estimated weighted average interest rate of approximately 6.96% per annum. A 1/8 percent variance in the assumed interest rate on the floating rate indebtedness would change interest expense by $1 million for the year ended December 31, 2025.

In addition, this adjustment reflects the removal of allocated interest income related to cash flow hedges of $2 million and the removal of allocated losses on extinguishment of debt presented in Restructuring, impairment and extinguishment costs of $1 million which was attributed to the Company historically due to the Company being jointly and severally liable for these obligations, which is not expected to continue following the Spin-Off.

Autonomous Entity Adjustments:

Management Adjustments:

The Company has elected to present management adjustments to the pro forma financial information and included all adjustments necessary for a fair statement of such information. As a separate public company, ADI expects to incur incremental costs within certain corporate functions including finance, IT, legal, human resources and other general and administrative related functions. The Company received the benefit of economies of scale as a single operating and reportable segment within Resideo; however, in establishing these functions independently, the expenses are expected to be higher than the prior corporate allocation from Resideo reflected within our historical combined financial statements.

As a separate public company, ADI expects to incur certain costs in addition to those reflected in the autonomous entity adjustments and described above, including employee related costs, information technology system costs, corporate governance costs, including board of director compensation and expenses, audit and other professional services fees, annual report and proxy statement costs, SEC filing fees, transfer agent fees, consulting and legal fees and stock exchange listing fees. The Company expects to begin recognizing recurring costs at the date of the Spin-Off and one-time costs are expected to be incurred over a period of 12 to 24 months post-separation.

The Company estimated that it would incur approximately $51 million of incremental expense (including $28 million of total one-time expenses and $23 million of recurring costs) for the year ended December 31, 2025 as if the Spin-Off had occurred on January 1, 2025. These incremental expenses are in addition to the $7 million of allocated spin-related transaction expenses within the Combined Statement of Operations.

We estimated these additional dis-synergies of recurring and one-time expenses by assessing the resources and associated recurring costs each function (e.g., finance, information technology, human resources, etc.) will require to stand up and operate as part of a separate publicly traded company. We expect to address any required resources incremental to the services provided by Resideo under the transition services agreement as described in note (o) through additional hiring or incremental vendor and other third-party services spend.

The additional expenses have been estimated based on assumptions that our management believes are reasonable. However, actual additional costs that will be incurred could differ from these estimates and would depend on several factors, including the economic environment, results of contractual negotiations with third party vendors, ability to execute on proposed separation plans and strategic decisions made in areas such as selling and marketing, research and development, information technology and infrastructures. In addition, adverse effects and limitations including those discussed in the section entitled “Risk Factors” to this document may impact actual costs incurred. We may also decide to increase or reduce resources or invest more heavily in certain areas in the future, which may result in further differences between management’s estimates and actual costs incurred in the future.

These management adjustments include forward-looking information that is subject to the safe harbor protections of the Exchange Act. Please see “Cautionary Statement Concerning Forward-Looking Statements.” The tax effect has been determined by applying the respective statutory tax rates to the aforementioned adjustments in jurisdictions where valuation allowances were not required.

For the year ended December 31, 2025:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations is intended to help readers understand the results of our operations and financial condition for the three years ended December 31, 2025, December 31, 2024 and December 31, 2023, and it should be read in conjunction with our combined financial statements and related notes and other financial information included elsewhere in this information statement.

ADI has historically operated as a part of Resideo; consequently, stand-alone financial statements have not historically been prepared. The accompanying combined financial statements have been derived from Resideo’s historical accounting records, including the historical cost basis of assets and liabilities comprising ADI, as well as the historical revenues, direct costs and allocations of indirect costs attributable to the operations of ADI, using the historical accounting policies applied by Resideo. These combined financial statements do not purport to reflect what the financial position, results of operations, comprehensive income or cash flows would have been had ADI operated as a separate, stand-alone entity during the periods presented. As a result, the discussion of our historical results is not necessarily indicative of the results that may be expected in the future.

In addition to historical combined financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this information statement, particularly in “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements.”

Overview and Business Trends

ADI is a global specialty distributor of professionally installed low-voltage products serving commercial and residential markets through an omnichannel go-to-market platform. Within North America, ADI is the market-leading distributor in the professionally installed security, fire/life safety and audio-visual product categories. We offer over 500,000 products from more than 1,000 suppliers across key specialty low-voltage categories with strong proximity to our customers with a large network of store locations. ADI sells primarily to professional installers, dealers and integrators. Our global customer base of over 100,000 professionals spans independent contractors, regional and national systems integrators and low-voltage specialists installing security, fire/life safety, AV and data communications products.

Our omnichannel go-to-market platform is underpinned by a digital experience designed to deepen customer engagement and broaden our reach. We combine an extensive third-party product portfolio and deep supplier relationships with a growing suite of exclusive brands and software-based services. These exclusive brands and services are designed to help our customers build stronger businesses, differentiate our offerings and improve the end user experience.

ADI Global Distribution is our sole operating and reportable segment based upon the information used by our chief operating decision maker (“CODM”) in evaluating the performance of our business and allocating resources and capital.

Key Factors Affecting Our Performance

We believe our performance and future success depends on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section entitled “Risk Factors.”

Continued Investment in Non-Residential and Commercial Building

Continued investment in non-residential buildings—whether new construction, repair, or remodel—drives demand for security, connectivity and workplace technology solutions. These products have become essential in modern workplaces and small businesses, and our future growth depends in part on our ability to continue to leverage the investment in non-residential buildings and expand our capabilities in a cost-effective way.

Continued Investment in Residential Building

In our primary North American market, demand for new homes continues to outpace supply. To the extent that such construction continues to accelerate, we expect homes to incorporate more connected technologies for smarter living, fueling demand for professionally installed home technology solutions. Disruptions in the housing market can affect our business if builders encounter difficulties that lead to a decrease in the number of homes they can build and sell or if demand for homes decreases altogether.

Increased Sales of Existing Homes and Renovation Projections

Home sales and repair and remodel projects often serve as catalysts for technology upgrades and installations. While current activity remains below recent historical levels, any rebound in these areas represents a significant opportunity for renewed demand. Any such future opportunity depends on our ability to capitalize on any such growth through disciplined investment in our product portfolio and our omnichannel go-to-market platform.

Increasingly Rapid Technology Replacement Cycles

The rapid adoption of cloud-based solutions and ongoing software innovation are shortening product upgrade cycles. This shorter product lifetime has led to a growing trend of replacing and renovating technology across multiple categories. Our ability to continually invest in digital innovation and to benefit from these shorter product cycles through disciplined capital management could impact our future growth.

Increasing Competition

The regions and industries we serve are highly competitive. We face significant competition from a wide range of companies, including large, diversified companies with broad geographic footprints, as well as smaller, more specialized companies. Our business strength is predicated on our continued delivery of innovative products and services through a single omnichannel go-to-market platform. In order to compete in this environment, we allocate resources to drive innovation in our portfolio through new product launches and extend our global presence so that we can meet expected demand.

Continuing Impacts of Macroeconomic Conditions

Our financial performance is influenced by macroeconomic factors underlying end user in the new construction and the repair and remodel construction industries, new home sales, existing home sales, employment rates, interest rates and bank lending standards, rising prices and inflation, impact of tariffs, and supply chain dynamics that can be influenced by geopolitics. The ongoing uncertainty and volatility in the global macroeconomic environment have affected, and could continue to affect, our visibility toward future performance. While supply chain, trade dynamics and logistics continued to normalize over 2025, uncertainties remain in 2026, including the potential for changes in inflation and interest rates, tariffs, increased labor costs, availability of labor, and reduced consumer spending due to softening labor markets, elevated mortgage rates, unfavorable foreign currency impacts, global conflicts and shifts in energy policies. We typically source around a quarter of our products from Mexico which are currently exempt from tariffs under the USMCA or specific commodity exceptions. Tariff impacts related to imported products that are not subject to the USMCA or another exception may be impacted by the new tariff surcharge of at least 10%. We will continue to take actions intended to address the cost impact of any tariffs that affect our business.

In light of the volatility of the global macroeconomic landscape, we employ a variety of strategies aimed at addressing uncertainties like tariffs, inflation, supply chain, labor costs and reduced consumer spend. For example, when macroeconomic conditions result in customer demand shifting away from a certain product category, we reallocate our internal resources and goods purchased towards product categories with consistent or growing demand. Further, our diverse portfolio of product offerings helps guard against volatility as we can thoughtfully deploy our sales and marketing efforts to align with shifting consumer demand profiles and macroeconomic trends. We also regularly assess our supply chain practices, logistics networks and cost profiles of our products to reduce inefficiencies and maintain agility in the face of volatility and other macroeconomic factors.

Separation and Distribution

On July 30, 2025, Resideo announced its intention to separate its ADI Global Distribution business from the remainder of its businesses. On           , 2026, the Resideo Board approved the distribution of    shares of our common stock on the basis of share(s) of our common stock for each share of Resideo common stock held as of the close of business on           , 2026, the record date for the distribution.

Resideo intends to execute the separation through a tax-free pro rata distribution to Resideo common stockholders of shares of common stock of ADI. As part of the separation, Resideo and its subsidiaries expect to conduct an internal reorganization to transfer ADI and its associated assets and liabilities to ADI. Following the distribution, Resideo common stockholders will own 100% of the outstanding shares of our common stock, and ADI will be a separate public company from Resideo.

For a further discussion of the conditions pursuant to the separation agreement and the risks and uncertainties associated with the separation and distribution, refer to the following sections of the information statement, “The Separation and Distribution” and “Risk Factors.”

Relationship with Resideo

Prior to the completion of the distribution, we are a wholly-owned subsidiary of Resideo, and all of our outstanding shares of common stock are owned by Resideo. Following the separation and distribution, we and Resideo will operate separately, each as a public company. Historically, we have relied on Resideo to manage certain of our operations and provide certain services, the costs of which have historically been either allocated or directly billed to us. Historical costs for such services may not necessarily reflect the actual expenses we would have incurred, or will incur, as an independent company.

In connection with the Spin-Off, we intend to enter into the separation agreement and certain other agreements with Resideo, including a transition services agreement, an employee matters agreement, a tax matters agreement, an intellectual property matters agreement and a commercial product purchase agreement. See “Certain Relationships and Related Person Transactions—Agreements with Resideo.” We generally expect to be able to utilize Resideo’s services for a transitional period following the Spin-Off before we replace these services over time with services supplied either internally or by third parties, as Resideo is only obligated to provide the transition services for limited periods following completion of the Spin-Off.

The expenses for the services we will receive from Resideo initially and then internally or by third parties may vary from the historical costs directly billed and allocated to us for the same services. Addressing the needs that arise from becoming a stand-alone company will require significant resources, including time and attention from our senior management and others throughout ADI. We will continue to monitor potential separation dis-synergies and we anticipate incurring certain one-time and ongoing costs associated with creating our own capabilities, as further discussed below. As discussed below, we are jointly and severally liable for certain third-party debt instruments and other obligations to which Resideo is a party. Accordingly, a portion of these obligations and the related expenses have been allocated to the Company for the periods presented. These outstanding debt obligations are not expected to transfer to ADI in connection with the Spin-Off. As a result, our actual long-term liability balances upon completion of the Spin-Off are expected to differ from the amounts reflected in the historical combined financial statements. All amounts reflected in our combined financial statements reflect estimated allocations. Refer to Note 9. Long-Term Debt and Note 10. Indemnification Agreement to combined financial statements. Refer to the sections entitled “Unaudited Pro Forma Combined Financial Statements” and “Description of Material Indebtedness” for a description of the indebtedness we expect to be in place upon consummation of the Spin-Off.

Future Stand-Alone Company Expenses

As a result of the Spin-Off, we will become subject to the requirements of the federal and state securities laws and stock exchange requirements. We will have to establish additional procedures and practices as a stand-alone public company. As a result, subsequent to the separation, we will incur additional one-time and non-recurring expenses consisting primarily of employee-related costs, costs to establish certain stand-alone functions and information technology systems and other transaction-related costs. Additionally, we will incur incremental costs that arise from becoming a stand-alone public company, including costs related to external reporting, internal audit, treasury, investor relations, board of directors and officers, and stock administration, as well as costs from expanding the services of existing functions, such as information technology, finance, supply chain, human resources, legal, tax, facilities, branding, security, government relations, community outreach and insurance. In line with our long-term cost strategy, we will continue to look for operational cost improvement opportunities as a stand-alone company by utilizing our lean culture and innovative technologies to drive lower costs and increased productivity levels across our business and corporate functions.

Refer to “Unaudited Pro Forma Combined Financial Statements” for additional details.

Results of Operations

This section of the information statement discusses the years ended December 31, 2025, December 31, 2024 and December 31, 2023 and year-over-year comparisons of these periods.

The following table represents results of operations on a combined basis for the periods indicated:

Net Revenue

2025 compared to 2024

Net revenue for the year ended December 31, 2025 was $4,784 million, an increase of $587 million, or 14.0%, as compared to the same period in 2024, primarily due to $446 million of revenue from the acquisition of Snap One, $66 million from higher sales volumes, $64 million from favorable price and mix shift, and $18 million from favorable currency exchange rates.

2024 compared to 2023

Net revenue for the year ended December 31, 2024 was $4,197 million, an increase of $628 million, or 17.6%, as compared to the same period in 2023, primarily due to $553 million of revenue from the acquisition of Snap One, $98 million from higher volumes and favorable foreign currency fluctuations of $4 million. The increase was partially offset by an unfavorable price impact of $31 million.

Gross Profit

2025 compared to 2024

Gross profit for the year ended December 31, 2025 was $1,065 million, an increase of $214 million, or 25.1%, as compared to 2024, and gross margin was 22.3% for the year ended December 31, 2025, up 200 basis points (“bps”) from the prior year. The increase in gross margin was primarily driven by favorable impacts from the acquisition of Snap One of 150 bps and favorable pricing and mix impacts of 100 bps, partly offset by increased freight and duties of 20 bps, and volume impact of 10 bps.

2024 compared to 2023

Gross profit for the year ended December 31, 2024, was $851 million, an increase of $183 million, or 27.4%, as compared to 2023, and gross margin was 20.3% for the year ended December 31, 2024, up 160 bps from the prior year. The increase in gross margin was primarily driven by favorable impacts from the acquisition of Snap One of 230 bps, partly offset by net impacts from competitive pricing pressure and unfavorable business mix of 60 bps, and freight and duties of 10 bps.

Selling, General and Administrative Expenses

2025 compared to 2024

Selling, general and administrative expenses for the year ended December 31, 2025 were $752 million, an increase of $154 million, or 25.8%, as compared to the same period in 2024. The increase was driven mainly by $109 million of incremental operating expenses from the Snap One acquisition, $41 million of inflationary impacts and investment in the business, and $4 million of unfavorable foreign currency exchange rates.

2024 compared to 2023

Selling, general and administrative expenses for the year ended December 31, 2024 were $598 million, an increase of $144 million, or 31.7%, as compared to the same period in 2023. The increase was driven mainly by $141 million of incremental operating expenses from the Snap One acquisition, and $20 million of inflationary impacts and investment in the business. This increase was partially offset by lower employee expenses of $13 million from prior restructuring efforts due to operating expense reduction initiatives.

Intangible Asset Amortization

2025 compared to 2024

Intangible asset amortization for the year ended December 31, 2025 was $95 million, an increase of $40 million as compared to the same period in 2024. The increase was primarily due to additional amortization expense of $36 million associated with the new intangibles acquired in the Snap One acquisition, and $4 million higher amortization primarily related to an increase in capitalized software development.

2024 compared to 2023

Intangible asset amortization for the year ended December 31, 2024 was $55 million, an increase of $42 million as compared to the same period in 2023. The increase was primarily due to additional amortization expense of $41 million associated with the new intangibles recorded in purchase accounting as a result of the Snap One acquisition.

Transaction Related Expenses

2025 compared to 2024

Transaction related expenses for the year ended December 31, 2025 were $16 million, a decrease of $29 million as compared to the same period in 2024. The decrease in costs is primarily due to a $36 million decrease in expenses related to integration costs for the Snap One acquisition, offset by $7 million of expenses incurred in connection with the ADI Spin-Off including third-party advisory, consulting, legal and other incremental separation-related costs.

2024 compared to 2023

Transaction related expenses for the year ended December 31, 2024 were $45 million, an increase of $45 million as compared to the same period in 2023. These costs were attributable to third-party diligence, legal and other third-party advisor fees and integration related costs that were incurred in connection with the Snap One acquisition.

Restructuring, Impairment and Extinguishment Costs

2025 compared to 2024

Restructuring, impairment and extinguishment costs for the year ended December 31, 2025 were $9 million, a decrease of $13 million, or 59.1% compared to 2024, primarily due to fewer restructuring actions.

2024 compared to 2023

Restructuring, impairment and extinguishment costs for the year ended December 31, 2024 were $22 million, an increase of $9 million, or 69.2%, as compared to the same period in 2023. The increase primarily reflects higher restructuring expenses of $14 million related to initiatives undertaken in connection with the Snap One acquisition, and $1 million of allocated debt extinguishment costs associated with Resideo’s multiple credit agreement amendments during the year. This increase was partially offset by a $6 million decrease in impairment expenses recorded in 2023.

Research and Development Expenses

2025 compared to 2024

Research and development expenses for the year ended December 31, 2025 were $39 million, an increase of $22 million compared to 2024. The $22 million increase was primarily due to the full-year inclusion of the acquisition of Snap One, including both employee compensation and third-party professional service costs.

2024 compared to 2023

Research and development expenses for the year ended December 31, 2024 were $17 million, up from $0 for the same period in 2023. The expenses resulted from new research and development activities obtained as part of the Snap One acquisition, including both employee compensation and third-party professional service costs.

Indemnification Agreement Expense

2025 compared to 2024

Indemnification agreement expense for the year ended December 31, 2025 was $364 million, an increase of $285 million, or 360.8%, as compared to the same period in 2024. The increase was driven by an additional expense incurred in connection with the termination of the Indemnification Agreement with Honeywell. Refer to Note 10. Indemnification Agreement to the combined financial statements included elsewhere in this information statement for additional information.

2024 compared to 2023

Indemnification agreement expense for the year ended December 31, 2024 was $79 million, an increase of $12 million, or 17.9%, as compared to the same period in 2023. The increase was due to an increase in the amount allocated to the combined financial statements as a result of an increase in amounts estimated to be payable by Resideo under the Indemnification Agreement.

Other (Income) Expense, Net

2025 compared to 2024

Other (income) expense, net for the year ended December 31, 2025 was $2 million of income, an increase of $6 million, as compared to $4 million of expense for the same period in 2024. The change was driven primarily by a $6 million change in the impact of foreign exchange rate fluctuations during the year ended December 31, 2025.

2024 compared to 2023

Other expenses, net for the year ended December 31, 2024 were $4 million of expense, an increase of $9 million, as compared to $5 million of income for the same period in 2023. The change was driven primarily by the impact of foreign exchange rate fluctuations in the year ended December 31, 2024.

Interest Expense

2025 compared to 2024

Interest expense for the year ended December 31, 2025 was $50 million, an increase of $11 million, or 28.2% compared to 2024. The change was due to an increase in the total long-term debt by Resideo through additional borrowings related to the termination of the Indemnification Agreement and the resulting increase in the allocated debt and associated interest expense to the Company. Refer to Note 9. Long-term Debt to the combined financial statements included elsewhere in this information statement for additional information.

2024 compared to 2023

Interest expense for the year ended December 31, 2024 was $39 million, an increase of $7 million, or 21.9%, as compared to the same period in 2023. The change was due to an increase in the total long-term debt at Resideo through additional borrowings and the resulting increase in the allocated debt and associated interest expense to the Company. Refer to Note 9. Long-term Debt to the combined financial statements included elsewhere in this information statement for additional information.

Interest Income

2025 compared to 2024

Interest income for the year ended December 31, 2025 was $8 million, a decrease of $7 million, or 46.7%, as compared to the same period in 2024. The change was primarily due to a decrease of $4 million of allocated interest income related to interest rate swaps and $3 million lower interest on related party assets.

2024 compared to 2023

Interest income for the year ended December 31, 2024 was $15 million, a decrease of $3 million, or 16.7%, as compared to the same period in 2023. The change was primarily due to lower interest income on related party assets.

Provision for Income Tax

2025 compared to 2024

Provision for income tax for the year ended December 31, 2025 was $11 million, a decrease of $14 million, or 56.0%, as compared to the same period in 2024. The $14 million decrease in tax expense was primarily driven by $25 million of tax benefit associated with interest expense resulting from the Indemnification Agreement termination, partially offset by a $7 million dollar increase in tax expense from the increase in income before taxes and before the non-deductible costs incurred to terminate the Indemnification Agreement.

The effective tax rate for the year ended December 31, 2025 was (4.2)% as compared to 327.7% in the same period in 2024. The decrease was primarily driven by non-deductible costs incurred to terminate the Indemnification Agreement and the associated interest expense deduction. Excluding these costs, the effective tax rate for 2025 is approximately 29%.

2024 compared to 2023

Provision for income tax for the year ended December 31, 2024 was $25 million, a decrease of $25 million, or 50.0%, as compared to the same period in 2023. The decrease in income tax expense was primarily due to a decrease in income before taxes.

The effective tax rate for the year ended December 31, 2024 was 327.7% as compared to 43.8% in the same period in 2023. The increase was primarily driven by non-deductible indemnification costs, which materially distorted the effective tax rate. Excluding these costs, the effective tax rate for 2024 is approximately 31%.

Non-GAAP Financial Measures

In addition to the key operational metrics above and our financial results as reported under U.S. GAAP, we evaluate our operating performance using certain financial measures, including Adjusted net income, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted free cash flow, that are not defined by, or prepared in accordance with, U.S. GAAP. We refer to these measures as “non-GAAP” financial measures. These non-GAAP financial measures are supplemental measures of our performance that we believe help investors to better understand our financial condition and operating results and to analyze business trends by providing measures which management uses to evaluate operating performance. We use these non-GAAP financial measures, in addition to the corresponding U.S. GAAP financial measures, as important supplemental measures of our operating performance that exclude non-cash and other disclosed items that we believe are not indicative of our underlying business, core operating results and the overall health of our company. We believe the use of such non-GAAP financial measures assists investors in understanding the ongoing operating performance of the Company by presenting the financial results between periods on a more comparable basis. These non-GAAP measures should be considered only as supplements to, and should not be considered in isolation or used as a substitute for, financial information prepared in accordance with U.S. GAAP. We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance. In conjunction with our U.S. GAAP results, we use these non-GAAP measures to assess business performance, particularly when comparing performance to past periods. As such, we believe these measures are useful for investors because they facilitate a comparison of financial results from period to period.

Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to compensate for these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with U.S. GAAP. Readers should review the reconciliations below and should not rely on any single financial measure to evaluate our business. The reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures follow.

We believe that Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin, which are adjusted to exclude the effects of unique and/or non-cash items that are not closely associated with ongoing operations, provide management and investors with meaningful measures of our performance that increase the period-to-period comparability by highlighting the results from ongoing operations and the underlying profitability factors. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of revenue. We believe Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin provide management and investors with a more complete understanding of underlying operating results and trends of established, ongoing operations without the effect of charges that do not relate to the core operations of our business, such as the impact of acquisitions, the Indemnification Agreement and foreign currency impacts, as these activities can obscure underlying trends. We believe that Adjusted free cash flow is a useful measure of liquidity and an additional basis for assessing our ability to generate cash.

We believe these measures provide additional insight into how our businesses are performing by excluding certain disclosed items that we believe are not representative of our underlying business and operating performance. However, Adjusted net income, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted free cash flow should not be construed as inferring that our future results will be unaffected by the items for which the measures adjust.

The following table provides a reconciliation of net (loss) income, the most closely comparable GAAP financial measure, to Adjusted net income:

Adjusted Net Income

The following table provides a reconciliation of net (loss) income and net (loss) income margin, the most closely comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin:

Adjusted EBITDA and Adjusted EBITDA margin

The following table provides a reconciliation of net cash flows provided by operating activities, the most closely comparable GAAP financial measure, to Adjusted free cash flow:

Adjusted free cash flow

Capital Resources and Liquidity

As of December 31, 2025, total cash and cash equivalents were $124 million. The cash reflected on our combined balance sheets represents cash accounts legally owned by our subsidiaries and comprises both (a) bank accounts held by local jurisdictions that do not participate in centralized cash pooling arrangements, as well as (b) bank accounts that participate in centralized cash pooling arrangements and are owned by our subsidiaries.

Historically, Resideo has provided cash management and other treasury services to us, the effect of which is presented as Due to related parties – current, Due from related parties – non-current and Net parent investment in the combined financial statements included elsewhere in this information statement. Upon completion of the Spin-Off, we will cease participation in Resideo’s cash pooling process, effectively settle any outstanding related party loan arrangements and our cash and cash equivalents will be held and used solely for our own operations. As a result, our capital structure, long-term commitments and sources of liquidity are expected to change meaningfully from our historical practices. For additional detail regarding changes to our capital structure, see the sections entitled “Unaudited Pro Forma Combined Financial Statements” and “Description of Material Indebtedness” within this information statement.

Our future capital requirements will depend on many factors, including the rate of sales growth, market acceptance of our products, the timing and extent of research and development projects, potential acquisitions of companies or technologies, and the expansion of our sales and marketing activities. We may enter into acquisitions or strategic arrangements in the future, which also could require us to seek additional equity or debt financing. In connection with the Spin-Off, we plan to enter into new financing arrangements described in the section entitled “Description of Material Indebtedness.” In connection with the Spin-Off, we will also be issuing shares of ADI preferred stock which will include an obligation to pay regular dividends to the holders of the ADI preferred stock and will include a conversion feature as described in the section entitled “Description of Capital Stock—Preferred Stock.” Fulfilling our obligations to pay dividends or the exercise of any optional redemption rights with respect to the outstanding ADI preferred stock could, if paid in cash, impact our liquidity and reduce the amount of cash available for working capital, capital expenditures, growth opportunities, acquisitions, and other general corporate purposes. We believe our existing cash at the Spin-Off, cash flows generated from operations and access to capital markets will provide adequate resources to meet the needs of our current and planned operations.

To the extent our current liquidity is insufficient to fund future activities, we may need to raise additional funds, such as refinancing or securing new secured or unsecured debt, common or preferred equity, disposing of certain assets to fund our operations, and/or other public or private sources of capital. If we raise additional funds by issuing equity securities, the ownership of our existing stockholders will be diluted. The incurrence of additional debt financing would result in debt service obligations, and any future instruments governing such debt could provide for operating and financial covenants that could restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all. See “Risk Factors—General Risk Factors—Our ability to raise capital in the future may be limited and our failure to raise capital may limit our ability to invest in strategic priorities and grow our business.”

With respect to long-term debt of Resideo and the Indemnification Agreement liability, the Company has not historically made cash payments to third parties as such payments are made by Resideo and there is no expectation or requirement for the Company to be obligated to make payments of this nature in the future as the Indemnification Agreement (including the guarantee provided by ADI) has been terminated on August 13, 2025 and, in the case of the long-term debt of Resideo, ADI is not expected to continue to be an obligor or guarantor with respect to these obligations upon the closing of the Spin-Off.

Credit Agreement

A subsidiary of Resideo (the “Borrower”) is the borrower under multiple third-party debt instruments for which we are jointly and severally liable as a guarantor, along with other U.S. subsidiaries of the Borrower. For such arrangements, the Borrower’s long-term third-party debt has been allocated to the Company for each reporting period. The related interest expense, including the effects of the Borrower’s interest rate swaps and interest rate cap, and amortization of deferred financing costs have been allocated to the Company for the periods presented in this information statement. An allocated portion of the Borrower’s unrealized gains or losses on the swaps and interest rate cap were also included within the accumulated other comprehensive loss for all periods presented. The portion of the Borrower’s debt and debt-related items allocated to us is based on what we would reasonably expect to pay on behalf of our co-obligors.

In February 2021, the Borrower entered into an Amendment and Restatement Agreement with JPMorgan Chase Bank N.A. as administrative agent and certain other financial institutions as lenders and/or issuing banks (the “Amendment”), which amended and restated (and refinanced in full) the Borrower’s then existing Credit Agreement dated as of October 25, 2018 (as amended, amended and restated, supplemented or otherwise modified from time to time, including pursuant to the Amendment, the “Credit Agreement”). Pursuant to the Credit Agreement (after giving effect to the Amendment), the Borrower obtained $1.45 billion of senior secured financing, consisting of (i) $950 million of senior secured term B loans, maturing in February 2028 (the “2028 Term B Loans”) and (ii) a $500 million, five-year senior secured revolving credit facility (the “Revolving Credit Facility”).

In March 2022, the Credit Agreement was amended, pursuant to which the Borrower obtained an additional $200 million of 2028 Term B Loans.

In June 2023, the Credit Agreement was amended to replace the interest rate reference rate of LIBOR with the secured overnight financing rate (“SOFR”).

In May 2024, the Credit Agreement was amended to reprice the 2028 Term B Loans by (i) reducing the interest rate margin from 2.25% to 2.00%, (ii) eliminating the SOFR credit spread adjustment, (iii) reducing the SOFR floor from 0.50% to 0% and (iv) reinstating the call protection (which had previously expired) for six months post-amendment.

In June 2024, the Credit Agreement was amended, pursuant to which the Borrower obtained a new tranche of senior secured term B loans maturing in June 2031 in an aggregate principal amount of $600 million (the “2031 Term B Loans”).

In December 2024, the Credit Agreement was amended to reprice the 2028 Term B Loans and the 2031 Term B Loans by (i) reducing the interest rate margin from 2.00% to 1.75% and (ii) reinstating the call protection (which had previously expired) for six months post-amendment.

In August 2025, the Credit Agreement was amended, pursuant to which the Borrower obtained a new tranche of senior secured term B loans maturing in August 2032 in an aggregate principal amount of $1,225 million.

The Borrower has entered into certain interest rate swap agreements to effectively convert a portion of the variable-rate debt to fixed-rate debt.

Refer to Note 9. Long-Term Debt to the combined financial statements for a description of the Borrower’s debt obligations and the timing of future principal and interest payments.

Senior Notes

In August 2021, the Borrower issued $300 million in principal amount of 4.00% Senior Notes due in 2029 (the “Senior Notes due 2029”). The Senior Notes due 2029 are senior unsecured obligations of Resideo guaranteed by Resideo’s existing and future domestic subsidiaries, rank equally with all of Resideo’s senior unsecured debt and are senior to all of its subordinated debt.

In July 2024, the Borrower issued $600 million in aggregate principal of 6.50% Senior Notes due 2032 (the “Senior Notes due 2032”). The net proceeds from the Senior Notes due 2032 were used to repay $596 million principal amount of outstanding 2028 Term B Loans.

As of December 31, 2025, the Borrower was in compliance with all covenants related to the Credit Agreement, Senior Notes due 2029 and Senior Notes due 2032.

As of December 31, 2025, Resideo had $3,231 million of long-term debt outstanding under the Credit Agreement, Senior Notes due 2029 and Senior Notes due 2032, of which $18 million is due in the next 12 months.

Indemnification Agreement

Resideo separated from Honeywell in 2018, becoming an independently traded public company as a result of a pro rata distribution of Resideo’s common stock to the stockholders of Honeywell (“Resideo Spin-Off”). In connection with the Resideo Spin-Off, Resideo entered into the Indemnification Agreement for which we were jointly and severally liable along with other subsidiaries of Resideo until the termination thereof on August 13, 2025. Accordingly, a portion of Resideo’s historical obligations under the agreement, and the resulting termination discussed below, has been allocated to us for the periods presented. The related expenses have also been allocated to us for the periods presented. The portion of Resideo’s obligation and related items allocated to us is based on what we would have reasonably expected to pay on behalf of our co-obligors.

Pursuant to the Indemnification Agreement, Resideo had an obligation to make cash payments to Honeywell in amounts equal to 90% of Honeywell’s payments, which included amounts billed, with respect to certain environmental claims, remediation and, to the extent arising after the Resideo spin-off, hazardous exposure or toxic tort claims, in each case, including consequential damages (the “liabilities”) in respect to specified Honeywell properties contaminated through historical business operations prior to the Resideo spin-off (“Honeywell Sites”), including the legal and other costs of defending and resolving such liabilities, less 90% of Honeywell’s net insurance receipts relating to such liabilities, and less 90% of the net proceeds received by Honeywell in connection with (i) affirmative claims relating to such liabilities, (ii) contributions by other parties relating to such liabilities and (iii) certain property sales. The amount payable in respect of such liabilities arising in any given year was subject to a cap of $140 million. Indemnification Agreement expenses are presented within Indemnification Agreement expense in the combined financial statements included elsewhere in this information statement. As of December 31, 2025, no allocated portion of the liabilities related to the Indemnification Agreement is presented within the combined balance sheet as the agreement was terminated.

Refer to Note 10. Indemnification Agreement within the combined financial statements included elsewhere in this information statement for additional information.

Cash Flow Summary for the Years Ended December 31, 2025, 2024 and 2023

Our cash flows from operating, investing, and financing activities for the years ended December 31, 2025, 2024 and 2023, as reflected in the combined financial statements are summarized as follows:

Operating Activities

Net cash used for operating activities for the year ended December 31, 2025 was $(522) million, a decrease of $607 million compared to the $85 million cash provided by operating activities in the prior year. This change was primarily driven by an increase in cash outflows associated with allocated payments related to the Indemnification Agreement, including the termination payment in the year ended December 31, 2025. The cash outflow associated with the Indemnification Agreement in the year ended December 31, 2025 was $634 million which represented an increase in cash used of $581 million relative to the prior year. The remaining change of $26 million was driven by cash used for other working capital accounts, partially offset by income, excluding the impacts of the Indemnification Agreement, and non-cash add-backs.

Net cash provided by operating activities for the year ended December 31, 2024 was $85 million, a decrease of $18 million compared to the prior year. The decrease was primarily attributable to reductions of $9 million in operating lease liabilities and $12 million in deferred income tax liabilities, partially offset by a decrease in cash used for working capital accounts of $2 million.

Investing Activities

Net cash used for investing activities for the year ended December 31, 2025 was $(68) million, an increase of $50 million, compared to the prior year, primarily driven by a decrease of $201 million in loans made to related parties, partially offset by a decrease of $122 million in proceeds from related-party loan arrangements and an increase of $29 million in capital expenditures.