What changed in this filing

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Item 1A. Risk Factors

2025-12-29 compared with 2024-12-30 · 129 added, 67 removed, 1008 unchanged (16% of the section changed)

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by fire, power shortages, nuclear power plant accidents and other industrial accidents, terrorist attacks and other hostile acts, ransomware

and other cybersecurity attacks , labor disputes, public health issues, including pandemics such as the COVID-19 pandemic,

and other events beyond our control.

Global climate change is resulting in certain types of natural disasters, such as droughts, floods,

hurricanes and wildfires, occurring more frequently or with more intense effects.

Such events can make it difficult or impossible for

us to manufacture and deliver products to our customers, create delays and inefficiencies in our supply and manufacturing chain, and

result in slowdowns and outages to our product and service offerings, and negatively impact consumer spending and demand in affected

Following an interruption to our business, we can require substantial recovery time, experience significant expenditures to resume

operations, and lose significant sales.

and other cybersecurity attacks, labor disputes, public health issues, including pandemics such as the COVID-19 pandemic, and other events

beyond our control.

Global climate change is resulting in certain types of natural disasters, such as droughts, floods, hurricanes, and

wildfires, occurring more frequently or with more intense effects.

Such events can make it difficult or impossible for us to manufacture

and deliver products to our customers, create delays and inefficiencies in our supply and manufacturing chain, and result in slowdowns

and outages to our product and service offerings, and negatively impact consumer spending and demand in affected areas.

interruption to our business, we can require substantial recovery time, experience significant expenditures to resume operations, and

lose significant sales.

operations are also subject to the risks of industrial accidents at our suppliers and contract manufacturers.

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new innovative products to grow revenues, (iii) raised approximately $12.5 million in net proceeds through our May 2024 equity financing,

and anticipate an additional $5 to $10 million when the Series B warrants are exercised, and (iv) subsequent to the balance sheet date

has effected a 60:1 and a 35:1 reverse stock split on our common stock to remain trading on the Nasdaq Capital Markets, and improve our

ability to potentially raise capital through equity offerings that we may use to satisfy debt.

In the event additional capital is raised

through equity offerings and/or debt is satisfied with equity, it may have a dilutive effect on our existing stockholders.

Company believes these plans if successful, would be sufficient to meet the capital demands of our current operations for at least the

next twelve months, there is no guarantee that we will succeed.

Overall, there is no guarantee that cash flow from our existing or future

operations and any external capital that we may be able to raise will be sufficient to meet our working capital needs.

The Company currently

does not have adequate cash or available liquidity/available capacity on our lines of credit to meet our long-term needs and our above

plans in the short term may prove to be inadequate to continue as a going concern.

Thus, despite our cash on hand, our ability to draw

on our credit line, or changes to our pricing models, and other safeguards, we may be unable to meet our obligations as they become due

over the next twelve months beyond the issuance date .

raised an additional $5.7 million subsequent to the balance sheet date and anticipate an additional $2.4 million when the remaining Series

B warrants are exercised, (iv) raised approximately $1.2 million in net proceeds from our May 2025 equity offering and an additional

$4.0 million in December 2025, and (v) has effected a 60:1, 35:1, and a 15:1 reverse stock splits on our common stock to remain trading

on the Nasdaq Capital Markets, and improve our ability to potentially raise capital through equity offerings that we may use to satisfy

In the event additional capital is raised through equity offerings and/or debt is satisfied with equity, it may have a dilutive

effect on our existing stockholders.

While the Company believes these plans if successful, would be sufficient to meet the capital demands

of our current operations for at least the next twelve months, there is no guarantee that we will succeed.

Overall, there is no guarantee

that cash flow from our existing or future operations and any external capital that we may be able to raise will be sufficient to meet

our working capital needs.

The Company currently does not have adequate cash or available liquidity/available capacity on our lines of

credit to meet our long-term needs and our above plans in the short term may prove to be inadequate to continue as a going concern.

despite our cash on hand, our ability to draw on our credit line, or changes to our pricing models, and other safeguards, we may be unable

to meet our obligations as they become due over the next twelve months beyond the issuance date.

is no guarantee that cash flow from operations and/or debt and equity financings will provide sufficient capital to meet our expansion

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shareholders of $28.1 million in 2025, $7.2 million in 2024,

and $13.0 million in 2022.

$9.2 million in 2023, and $13.0 million in 2022.

We have an accumulated deficit of $99.4 million as of September 30, 2025.

We expect to continue to incur significant

product development, sales and marketing and administrative expenses.

As a result, we will need to generate significant revenues to achieve

profitability.

We cannot be certain that we will achieve profitability in the future or, if we achieve profitability, to sustain it.

If we do not achieve and maintain profitability, the market price for our common stock may decline, perhaps substantially.

to continue to incur significant product development, sales and marketing and administrative expenses.

As a result, we will need to generate

significant revenues to achieve profitability.

We cannot be certain that we will achieve profitability in the future or, if we achieve

profitability, to sustain it.

If we do not achieve and maintain profitability, the market price for our common stock may decline, perhaps

substantially.

Company is exposed to credit risk, market risk, and fluctuations in the value of its investment portfolio.

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our obligations under outstanding indebtedness.

of September 30, 2024, our total indebtedness was approximately $21.05 million, including notes payable of $12.4 million, revolving

line of credit of $3.1 million, mortgage payable of $3.3 million, bank loans of $2.2 million, and $0.05 million of PPP loans.

comparison, as September 30, 2023, our total indebtedness was approximately $24.4 million, including notes payable of $18.1 million,

mortgage payable of $3.4 million, vendor financed purchase of $0.7 million, bank loans of $1.3 million, and $0.9 million of PPP

For 2024 and 2023 approximately $7.9 million and $14.5 million, respectively, of such debt is classified as current.

substantial debt could have important consequences, including the following:

(i) a substantial portion of our cash flow from

operations may be dedicated to the payment of principal and interest on indebtedness, thereby reducing the funds available for

operations, future business opportunities and capital expenditures;

(ii) our ability to obtain additional financing for working

capital, debt service requirements and general corporate purposes in the future may be limited;

(iii) we may face a competitive

disadvantage to lesser leveraged competitors;

(iv) our debt service requirements could make it more difficult to satisfy other

financial obligations;

and (v) we may be vulnerable in a downturn in general economic conditions or in our business and we may be

unable to carry out activities that are important to our growth .

of September 30, 2025, our total indebtedness was approximately $16.8 million, including notes payable of $8.5 million, revolving line

of credit of $3.2 million, mortgage payable of $3.2 million, and bank loans of $1.9 million.

By comparison, as of September 30, 2024,

our total indebtedness was approximately $21.05 million, including notes payable of $12.4 million, revolving line of credit of $3.1 million,

mortgage payable of $3.3 million, bank loans of $2.2 million, and $0.05 million of PPP loans.

For 2025 and 2024 approximately $12.1 million

and $7.9 million, respectively, of such debt is classified as current.

This substantial debt could have important consequences, including

the following:

(i) a substantial portion of our cash flow from operations may be dedicated to the payment of principal and interest on

indebtedness, thereby reducing the funds available for operations, future business opportunities and capital expenditures;

(ii) our ability

to obtain additional financing for working capital, debt service requirements and general corporate purposes in the future may be limited;

(iii) we may face a competitive disadvantage to lesser leveraged competitors;

(iv) our debt service requirements could make it more difficult

to satisfy other financial obligations;

and (v) we may be vulnerable in a downturn in general economic conditions or in our business

and we may be unable to carry out activities that are important to our growth.

ability to make scheduled payments of the principal of, or to pay interest on, or to refinance our indebtedness depends on and is subject

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on terms that are reasonable in light of current market conditions.

Related to Our Investment in Digital Assets

value of our digital asset holdings is highly volatile and may decline significantly.

have invested in digital assets, primarily Solana (SOL), which we hold and stake for potential yield.

These holdings are subject to significant

risks, including extreme price volatility, regulatory uncertainty, technological vulnerabilities, and liquidity constraints.

decline in value or impairment could adversely affect our financial condition, results of operations, and stock price.

assets, including SOL, have experienced extreme price volatility.

The market price of SOL is influenced by factors beyond our control,

such as market sentiment, speculative trading, adoption rates, and global economic conditions.

A significant decline in SOL’s price

could result in substantial losses or impairment charges, negatively impacting our balance sheet, liquidity, and financial results.

volatility in cryptocurrency markets has led to rapid and severe price drops, and there is no assurance that our holdings will appreciate

or maintain value.

digital assets are subject to risks associated with staking and the Solana network.

stake our SOL holdings to earn rewards, exposing us to additional risks, including slashing penalties for validator misconduct, network

downtime, or illiquidity during unstaking periods.

The Solana network has historically experienced outages and congestion, which could

disrupt staking operations, reduce rewards, or temporarily prevent access to our assets.

Concentration among validators on Solana may

also heighten centralization risks, making the network vulnerable to attacks or failures.

developments could adversely affect our digital asset holdings.

Cryptocurrencies,

including SOL, face evolving and uncertain regulation in the U.S.

and globally.

Changes in laws, SEC classifications (e.g., as securities),

tax treatment, or enforcement actions could restrict trading, staking, custody, or require registration/compliance we cannot meet.

rulings (e.g., ongoing SEC scrutiny of Solana-related products) could impair liquidity, trigger forced sales at unfavorable prices, or

result in losses.

International restrictions could further limit market access.

face cybersecurity, custody, and theft risks with our digital assets.

assets are vulnerable to hacking, theft, fraud, or loss due to private key compromises or platform breaches.

While we use secure custody

methods, no system is foolproof.

A cybersecurity incident could result in partial or total loss of holdings, with limited or no recovery

options (unlike traditional assets with insurance).

Network-level attacks on Solana could also indirectly affect our assets.

accounting, and liquidity risks associated with digital assets could impact our financial reporting.

ASU 2023-08, we measure SOL at fair value with changes in net income, increasing earnings volatility.

Fair value relies on exchange prices,

which may be manipulated or illiquid.

Limited trading venues or counterparty failures could hinder sales at desired prices/times, affecting

liquidity needs.

digital asset strategy may distract management or fail to deliver expected benefits.

resources to managing/staking digital assets diverts attention from core operations.

If the strategy underperforms or markets decline,

it could harm shareholder value without offsetting benefits.

risks are in addition to general cryptocurrency market risks.

Our holdings are not core to operations but could materially impact finances

if risks materialize.

Related to our Business

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operating results are sensitive to raw material and resale product availability, quality, and cost

seek to have many sources of supply for each of our major requirements in order to avoid significant dependence on any one or a few suppliers.

However, the supply of materials or other items could be disrupted by natural disasters, international trade tariffs, wars, pandemics,

disputes and or other events.

Despite market price volatility for certain requirements and materials pricing pressures at some of our

businesses, the raw materials and various purchased components needed for our products have generally been available in sufficient quantities.

seek to have many sources of supply for each of our major requirements in order to avoid significant dependence on any single or a few

However, the supply of materials or other items could be disrupted by natural disasters, international trade tariffs, wars,

pandemics, disputes and or other events.

Despite market price volatility for certain requirements and materials pricing pressures at

some of our businesses, the raw materials and various purchased components needed for our products have generally been available in sufficient

In some instances, lead times have extended beyond normal due to logistic delays and labor shortages occurring globally.

products, however, require the use of raw materials that are available from only a limited number of regions around the world, are available

from only a limited number of suppliers, or may be subject to significant fluctuations in market prices.

Our results of operations may

be adversely affected if we have difficulty obtaining these raw materials, our key suppliers experience financial difficulties, the quality

of available raw materials deteriorates, or there are significant price increases for these raw materials.

Our inability to recover increased

costs through increased sales prices could have an adverse impact on our results of operations.

For periods in which the prices for these

raw materials rise, we may be unable to pass on the increased cost to our customers, which would result in decreased sales margins for

the products in which they are used.

For periods in which prices for these raw materials decline, we may be required, as has occurred

in the past, to write down our inventory carrying cost of these raw materials and products.

Depending on the extent of the difference

between market price and our carrying cost, the write-down could have a significant adverse effect on our results of operations.

Some of our products, however, require the use of raw materials that are available from only a limited number of regions around the world,

are available from only a limited number of suppliers, or may be subject to significant fluctuations in market prices.

Our results of

operations may be adversely affected if we have difficulty obtaining these raw materials, our key suppliers experience financial difficulties,

the quality of available raw materials deteriorates, or there are significant price increases for these raw materials.

Our inability

to recover increased costs through increased sales prices could have an adverse impact on our results of operations.

For periods in which

the prices for these raw materials rise, we may be unable to pass on the increased cost to our customers, which would result in decreased

sales margins for the products in which they are used.

For periods in which prices for these raw materials decline, we may be required,

as has occurred in the past, to write down our inventory carrying cost of these raw materials and products.

Depending on the extent of

the difference between market price and our carrying cost, the write-down could have a significant adverse effect on our results of operations.

resell products manufactured by other component and interconnect product manufacturers.

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B Warrants as of this date became approximately 3,652,206.

May 29, 2025, the Company completed an underwritten public offering of common stock.

At the time, the Company had 248,166 Series A Warrants

and 3,318,556 Series B Warrants outstanding at an exercise price of $3.1488.

According to the terms of the Series A and Series B warrants,

in the event of a public offering, the exercise price resets to the lower of (i) the public offering price, or (ii) the lowest VWAP during

the period commencing five (5) consecutive trading days commencing on the republic offering effective date and the number of warrants

are adjusted as to keep the aggregate value of the warrants then outstanding remains unchanged.

a result of the 1 for 15 reverse stock split we completed on September 29, 2025 the exercise price of approximately 1,392,381 Series

A Warrants were reset to $5.304 and 14,363,882 Series B Warrants were reset to $5.304 based on the lowest VWAP over the course of the

five day trading period and the new amount of Series A Warrants as of this date became approximately 49,108, and the new amount of Series

B Warrants as of this date became approximately 1,519,782.

adjustments to the Series A Warrants and Series B Warrant exercise price and number of warrants may occur if we complete any additional

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors