nLIGHT (LASR) Risk Analysis

Provisions of our certificate of incorporation and bylaws could depress the trading price of our common stock by acting to discourage, delay or prevent a change in our control or management that our stockholders may deem advantageous. Among other things, our certificate of incorporation and bylaws: - permit our board of directors to issue up to five million shares of preferred stock, with any rights, preferences and privileges as they may designate;- provide that the authorized number of directors may be changed only by resolution of our board of directors;- provide that all vacancies on our board of directors may only be filled by our board of directors and not by stockholders;- divide our board of directors into three classes;- provide that a director may only be removed from our board of directors by the stockholders for cause;- require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and may not be taken by written consent;- provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and meet specific requirements as to the form and content of a stockholder's notice;- prohibit cumulative voting;- provide that special meetings of our stockholders may be called only by the chairman of our board of directors, our chief executive officer (or president, in the absence of a chief executive officer) or by our board of directors; and - provide that stockholders will be permitted to amend our certificate of incorporation and our bylaws only upon receiving at least two-thirds of the total votes entitled to be cast by holders of all outstanding shares then entitled to vote generally in the election of directors, voting together as a single class. In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any "interested" stockholder for a period of three years following the date on which the stockholder became an "interested" stockholder. Likewise, because our principal executive offices are located in Washington, the anti-takeover provisions of the Washington Business Corporation Act may apply to us under certain circumstances. These provisions prohibit a "target corporation" from engaging in any of a broad range of business combinations with any stockholder constituting an "acquiring person" for a period of five years following the date on which the stockholder became an "acquiring person."

The trading price of our common stock has been and is likely to continue to be volatile. Factors that could cause fluctuations in the trading price of our common stock include the following: - price and volume fluctuations in the overall stock market from time to time, and the trading volume of our stock;- changes in operating performance, stock market valuations and volatility in the market prices of other technology companies generally, or those in our industry in particular;- actual or anticipated quarterly variations in our results of operations or growth rate or those of our competitors;- announcements by us or our competitors of acquisitions, new products, significant contracts, commercial relationships or capital commitments;- manufacturing, labor or supply interruptions;- developments with respect to intellectual property rights;- our ability to obtain regulatory approvals or develop and market new and enhanced products on a timely basis;- commencement of, or our involvement in, litigation;- major changes in our board of directors, management or key personnel;- changes in governmental regulations or defense-related spending and budgets;- actual or perceived privacy, data protection or cybersecurity breaches or incidents;- actual or perceived future sales or repurchases of our common stock or other securities;- failure of financial analysts to maintain coverage of us, changes in financial estimates by any analysts who follow our company or our failure to meet these estimates or the expectations of investors;- public health crises, geopolitical events and macroeconomic conditions;- fluctuations in the values of companies perceived by investors to be comparable to us;- the financial projections we may provide to the public, any changes in or failure to meet these projections; and - general economic conditions and slow or negative growth of related markets. The stock market in general, and market prices for the securities of technology companies like ours in particular, have from time to time experienced volatility that often has been unrelated to the operating performance of the underlying companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our operating performance, which might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. In several recent situations when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit against us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management and materially adversely affect our results of operations.