Item 1A. Risk Factors.
Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal period ended October 31, 2024, and Part II, Item IA, “Risk Factors” in our Quarterly Reports on Form 10-Q for the fiscal periods ended January 31, 2025 and April 30, 2025, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock, including certain risks.
Item 5. Other Information
Trading Plans
During the fiscal quarter ended July 31, 2025, the following trading plans were adopted or terminated by our directors or officers, as applicable:
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| Name & Title | | Date of Adoption / Termination | | Character of Trading Arrangement(1) | | Aggregate Number of Shares of Common Stock to be Purchased/Sold Pursuant to Trading Arrangement | | Duration of Plan(2) |
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| Jeremy Cox | | Terminated June 26, 2025 | | Rule 10b5-1
Trading Arrangement | | Up to 100,392 shares to be sold | | September 12, 2024-June 30, 2026 |
| Senior Vice President, Controller and Chief Tax Officer |
| Jeremy Cox | | Adopted June 27, 2025 | | Rule 10b5-1
Trading Arrangement | | Up to 119,287 shares to be sold | | December 9, 2025-June 1, 2026 |
| Senior Vice President, Controller and Chief Tax Officer |
| Maeve Culloty | | Adopted June 26, 2025 | | Rule 10b5-1
Trading Arrangement | | Up to 49,442 shares to be sold | | December 11, 2025- June 5, 2026 |
| Executive Vice President, President and CEO, HPE Financial Services |
| Phil Mottram | | Adopted June 26, 2025 | | Rule 10b5-1
Trading Arrangement | | Up to 143,699 shares to be sold | | December 9, 2025- June 5, 2026 |
Executive Vice President, GM, Intelligent Edge(3) |
| Fidelma Russo | | Adopted June 25, 2025 | | Rule 10b5-1
Trading Arrangement | | Up to 256,350 shares to be sold | | December 11, 2025- June 12, 2026 |
| Executive Vice President, General Manager, Hybrid Cloud and Chief Technology Officer |
(1) Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), as amended (the “Rule”).
(2) Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” only permits transactions after the indicated duration start date and, in any case, upon expiration of the applicable mandatory cooling-off period under the Rule, and until the earlier of the indicated duration end date or completion of all sales contemplated in the Rule 10b5-1 Trading Arrangement.
(3) Phil Mottram, Executive Vice President, General Manager of Intelligent Edge ceased being a Section 16 reporting person on July 2, 2025 in connection with the Merger.
Exchange Act Section 13(r) Disclosure
The following disclosure is being made under Section 13(r) of the Exchange Act:
On March 2, 2021, the U.S. Secretary of State designated the Russian Federal Security Service (“FSB”) as a party subject to the provisions of U.S. Executive Order No. 13382 issued in 2005 (“Executive Order 13382”). On the same day, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) updated General License 1B (“General License 1B”) which generally authorizes U.S. companies to engage in certain licensing, permitting, certification, notification, and related transactions with the FSB as may be required for the importation, distribution, or use of information technology products in the Russian Federation. Our local Russian subsidiary (“HPE Russia”) may be required to engage with the FSB as a licensing authority and to file documents. There are no gross revenues or net profits directly associated with any such dealings by HPE with the FSB and all such dealings are explicitly authorized by General License 1B. We plan to continue these activities as required to support our orderly and managed wind down of our Russia operations.
On April 15, 2021, the U.S. Government issued an executive order on Blocking Property with Respect to Specified Harmful Foreign Activities of the Government of the Russian Federation (“Executive Order 14024”), implementing additional U.S. sanctions against the Russian government and against Russian actors that threaten U.S. interests, including certain technology companies that support the Russian Intelligence Service. The U.S. Secretary of the Treasury designated Pozitiv Teknolodzhiz, AO (“Positive Technologies”) under Executive Order 14024 and Executive Order 13382. HPE Russia had dealings with Positive Technologies prior to its designation. Following the sanctions designation, HPE Russia immediately initiated procedures to terminate its relationship with Positive Technologies. HPE does not plan to engage in any further
transactions with this entity, except wind down activities that are authorized by OFAC going forward. HPE Russia continues to have blocked property associated with Positive Technologies. No action will be taken unless and until a license is received from OFAC authorizing collection of the property. There are no identifiable gross revenues or net profits associated with HPE’s activities related to Positive Technologies for this reporting period.
Based on HPE’s current internal review, during the period of approximately December 2021 to May 2022, Hewlett-Packard Limited (“HPL”), a UK subsidiary of HPE, issued sales orders for certain software, hardware, and related support service agreements to a UK distributor. In connection with these orders, HPE delivered certain products to that UK distributor in or around January 2022 and entered into four support service agreements between May 2022 and July 2022. The ultimate end customer in these arrangements was Persia International Bank PLC (“Persia International”), a UK entity that OFAC designated as a blocked entity pursuant to Executive Order 13224. Subsequent to these arrangements, HPE has had no direct or indirect dealings with Persia International. The gross revenue from these transactions was approximately £28,129.84 (approximately $34,055.50). HPE is unable to accurately calculate the net profit from such activities. HPE and its affiliates have placed each of these contracts in blocked status and do not intend to engage in any further transactions involving Persia International, whether pursuant to these contracts or otherwise.
For a summary of our revenue recognition policies, see “Revenue Recognition” described in Note 1, “Overview and Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8 of Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.
