DATA I/O CORP 10-Q

Item 1. Financial Statements DATA I/O CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands, except share data) (UNAUDITED) March 31, 2026 December 31, 2025 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 5,707 $ 7,901 Trade accounts receivable, net of allowance for credit losses of $ 29 and $ 29 , respectively 2,394 2,841 Inventories 6,148 5,710 Other current assets 725 799 TOTAL CURRENT ASSETS 14,974 17,251 Property, plant and equipment – net 700 807 Other assets 1,950 2,118 TOTAL ASSETS $ 17,624 $ 20,176 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 1,252 $ 1,227 Accrued compensation 653 958 Deferred revenue 1,495 1,464 Other accrued liabilities 2,273 1,328 Income taxes payable 4 4 TOTAL CURRENT LIABILITIES 5,677 4,981 Deferred foreign income tax 250 250 Operating lease liabilities 1,235 1,411 Long-term other payables - 20 STOCKHOLDERS’ EQUITY Preferred stock - Authorized, 5,000,000 shares, including 200,000 shares of Series A Junior Participating Issued and outstanding, none - - Common stock, at stated value - Authorized, 30,000,000 shares Issued and outstanding, 9,394,422 shares as of March 31, 2026 and 9,391,922 shares as of December 31, 2025 24,126 24,062 Accumulated deficit ( 14,144 ) ( 10,974 ) Accumulated other comprehensive income (loss) 480 426 TOTAL STOCKHOLDERS’ EQUITY 10,462 13,514 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 17,624 $ 20,176 See notes to consolidated financial statements 3 Table of Contents DATA I/O CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (UNAUDITED) Three Months Ended March 31, 2026 2025 Net sales $ 3,250 $ 6,176 Cost of goods sold 1,641 2,988 Gross margin 1,609 3,188 Operating expenses: Research and development 1,291 1,515 Selling, general and administrative 3,462 2,050 Total operating expenses 4,753 3,565 Operating income (loss) ( 3,144 ) ( 377 ) Non-operating income (loss): Interest income 15 38 Foreign currency transaction gain (loss) ( 41 ) ( 22 ) Total non-operating income (loss) ( 26 ) 16 Income (loss) before income taxes ( 3,170 ) ( 361 ) Income tax (expense) benefit - ( 21 ) Net income (loss) $ ( 3,170 ) $ ( 382 ) Basic earnings (loss) per share $ ( 0.34 ) $ ( 0.04 ) Diluted earnings (loss) per share $ ( 0.34 ) $ ( 0.04 ) Weighted-average basic shares 9,393 9,238 Weighted-average diluted shares 9,393 9,238 See notes to consolidated financial statements 4 Table of Contents DATA I/O CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) (UNAUDITED) Three Months Ended March 31, 2026 2025 Net income (loss) $ ( 3,170 ) $ ( 382 ) Other comprehensive income (loss): Foreign currency translation gain (loss) 54 126 Comprehensive income (loss) $ ( 3,116 ) $ ( 256 ) See notes to consolidated financial statements 5 Table of Contents DATA I/O CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands, except share amounts) (UNAUDITED) Accumulated and Other Total Common Stock Accumulated Comprehensive Stockholders' Shares Amount Deficit Income (Loss) Equity Balance at December 31, 2024 9,236,040 $ 23,475 $ ( 5,738 ) $ ( 111 ) $ 17,626 Stock awards issued, net of tax withholding 1,759 ( 3 ) - - ( 3 ) Issuance of stock through: ESPP 1,932 6 - - 6 Share-based compensation - 174 - - 174 Net income (loss) - - ( 382 ) - ( 382 ) Other comprehensive income (loss) - - - 126 126 Balance at March 31, 2025 9,239,731 $ 23,652 $ ( 6,120 ) $ 15 $ 17,547 Balance at December 31, 2025 9,391,922 $ 24,062 $ ( 10,974 ) $ 426 $ 13,514 Stock options exercised - Stock awards issued, net of tax withheld 2,500 ( 13 ) - ( 13 ) Issuance of stock through: ESPP - - - - Share-based compensation 77 - - 77 Net income (loss) - - ( 3,170 ) - ( 3,170 ) Other comprehensive income (loss) - - - 54 54 Balance at March 31, 2026 9,394,422 $ 24,126 $ ( 14,144 ) $ 480 $ 10,462 6 Table of Contents DATA I/O CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (UNAUDITED) For the Three Months Ended March 31, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ ( 3,170 ) $ ( 382 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 115 127 Equipment transferred to cost of goods sold - 9 Share-based compensation 77 174 Net change in: Trade accounts receivable 447 132 Inventories ( 438 ) 409 Other current assets 74 ( 182 ) Accounts payable and accrued liabilities 673 ( 12 ) Deferred revenue 31 ( 160 ) Other long-term liabilities ( 204 ) ( 254 ) Deposits and other long-term assets 168 248 Net cash provided by (used in) operating activities ( 2,227 ) 109 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant and equipment ( 8 ) ( 56 ) Cash provided by (used in) investing activities ( 8 ) ( 56 ) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of common stock, less payments for shares withheld to cover tax ( 13 ) 2 Cash provided by (used in) financing activities ( 13 ) 2 Increase (decrease) in cash and cash equivalents ( 2,248 ) 55 Effects of exchange rate changes on cash 54 104 Cash and cash equivalents at beginning of period 7,901 10,326 Cash and cash equivalents at end of period $ 5,707 $ 10,485 Supplemental disclosure of cash flow information: Cash paid during the period for: Income taxes $ - $ 21 See notes to consolidated financial statements 7 Table of Contents DATA I/O CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Data I/O Corporation (“Data I/O”, “We”, “Our”, “Us”, the “Company”) is a global market leader for advanced programming, security deployment, security provisioning and associated Intellectual Property (“IP”) protection and management solutions used in electronics manufacturing with flash memory, microcontrollers, and flash memory-based intelligent devices as well as secure element devices, authentication devices and secure microcontrollers. Customers for our programming system products are located around the world, primarily in Asia, Europe and the Americas. Our manufacturing operations are currently located in Redmond, Washington, United States and Shanghai, China. We prepared the financial statements as of March 31, 2026 and March 31, 2025, according to the rules and regulations of the Securities and Exchange Commission ("SEC"). These statements are unaudited but, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to present fairly the results for the periods presented. The balance sheet at December 31, 2025, has been derived from the audited financial statements at that date. We have condensed or omitted certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America according to such SEC rules and regulations. Operating results for the three months ended March 31, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. Significant Accounting Policies These financial statements should be read in conjunction with the annual audited financial statements and the accompanying notes included in our Form 10-K for the year ended December 31, 2025 (filed with the SEC on April 16, 2026). There have been no changes to our significant accounting policies described in the Annual Report that have had a material impact on our unaudited condensed consolidated financial statements and related notes. Revenue Recognition Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606) provides a single, principles-based, five-step model to be applied to all contracts with customers. It generally provides for the recognition of revenue in an amount that reflects the consideration to which the Company expects to be entitled, net of allowances for estimated returns, discounts or sales incentives, as well as taxes collected from customers when control over the promised goods or services are transferred to the customer. We expense contract acquisition costs, primarily sales commissions, for contracts with terms of one year or less and will capitalize and amortize incremental costs with terms that exceed one year. During the current and prior period quarters, the impact of capitalization of incremental costs for obtaining contracts were immaterial. We exclude sales, use, value added, some excise taxes and other similar taxes from the measurement of the transaction price. We recognize revenue upon transfer of control of the promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. We have determined that our programming equipment has reached a point of maturity and stability such that product acceptance can be assured by testing at the factory prior to shipment. These systems are standard products with published product specifications and are configurable with standard options. The evidence that these systems could be deemed accepted was based upon having standardized factory production of the units, results from batteries of tests of product performance to our published specifications, quality inspections and installation standardization, as well as past product operation validation with the customer and the history provided by our installed base of products upon which the current versions were based. We enter into arrangements with multiple performance obligations that arise during the sale of a system that could include hardware, software, services and support and extended maintenance components. We allocate the transaction price of each element based on the relative selling price of each performance obligation. For hardware, we determine our best estimate of selling price based on an expected cost-plus-a-margin approach. For the service and support performance obligations, we estimate the standalone selling price using the adjusted market assessment approach, which considers observable market pricing, discounting practices, and prices charged for comparable standalone arrangements. For software maintenance performance obligations, we determine our best estimate of selling price based on observable standalone sales of annual software maintenance renewals. Revenue is recognized on the system based on shipping terms, software based on delivery, services based on completion of work, and software maintenance and extended warranty support ratably over the term of the agreement, typically one year. 8 Table of Contents We record deferred revenue as any non-refundable amounts that are primarily related to prepayments from customers, which is recognized as revenue as or when the performance obligations are satisfied. We have elected the practical expedient to omit disclosure of the amount of the transaction price allocated to remaining performance obligations for contracts with an expected contract length of one year or less. When we license software separately, we recognize revenue upon the transfer of control of the software, which is generally upon shipment, provided that only inconsequential performance obligations remain on our part and substantive acceptance conditions, if any, have been met. We recognize revenue when there is an approved contract that both parties are committed to perform, both parties’ rights have been identified, the contract has substance, collection of substantially all the consideration is probable, the transaction price has been determined and allocated over the performance obligations, the performance obligations including substantive acceptance conditions, if any, in the contract have been met, the obligation is not contingent on resale of the product, the buyer’s obligation would not be changed in the event of theft, physical destruction or damage to the product, the buyer acquiring the product for resale has economic substance apart from us and we do not have significant obligations for future performance to directly bring about the resale of the product by the buyer. We establish a reserve for sales returns based on historical trends in product returns and estimates for new items. Payment terms are generally 30 to 60 days from shipment. We transfer certain products out of service from their internal use and make them available for sale. The products transferred are typically our standard products in one of the following areas: service loaners, rental or test units; engineering test units; or sales demonstration equipment. Once transferred, the equipment is sold by our regular sales channels as used equipment inventory. These product units often involve refurbishing and an equipment warranty and are conducted as sales in our normal and ordinary course of business. The transfer amount is the product unit’s net book value, and the sale transaction is accounted for as revenue and cost of goods sold. The following table represents our revenues by major categories: Three Months Ended Net sales by type March 31, 2026 March 31, 2025 (as Revised) (in thousands) Platform Sales $ 625 $ 3,054 Adapter Sales 1,520 1,943 Software and Services Sales* 1,105 1,179 Total $ 3,250 $ 6,176 * includes service and parts sales associated with equipment service contracts The Company identified an error in the prior‑year disaggregated revenue amounts. As a result, the 2025 revenue by major category amounts have been revised. The correction did not impact the Company’s previously reported consolidated balance sheets, statements of operations, comprehensive income (loss), or statements of cash flows. See: Note 12 for additional information regarding the revision of prior‑period disaggregated revenue amounts. 9 Table of Contents Share-Based Compensation All share-based compensation awards are measured based on estimated fair values on the date of grant and recognized as compensation expense on the straight-line method. Our share-based compensation is reduced for estimated forfeitures at the time of grant and revised as necessary in subsequent periods if actual forfeitures differ from those estimates. Income Tax Income taxes for U.S. and foreign subsidiary operations are computed at current enacted tax rates, less tax credits using the asset and liability method. Deferred taxes are adjusted both for items that do not have tax consequences and for the cumulative effect of any changes in tax rates from those previously used to determine deferred tax assets or liabilities. Tax provisions include amounts that are currently payable, changes in deferred tax assets and liabilities that arise because of temporary differences between the timing of when items of income and expense are recognized for financial reporting and income tax purposes, and any changes in the valuation allowance caused by a change in judgment about the realization of the related deferred tax assets. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized. On July 4, 2025, the One Big Beautiful Bill Act (Act) was signed into law. The Act makes permanent key elements of the Tax Cuts and Jobs Act, including 100 percent bonus depreciation, domestic research cost expensing, increases the AMIC to 35 percent from 25 percent and modifications to the international tax framework. The Act includes multiple effective dates, with certain provisions effective in 2025 and others phased in through 2027. We continue to evaluate the impact of the Act's provisions that will take effect in future years. As a result of this legislation, the Company is deducting its domestic Section 174A expenditures beginning in the 2025 taxable year. New Accounting Pronouncements – Standards Issued and Not Yet Implemented In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation (Subtopic 220-40),” which requires disclosure of specific information about costs and expenses within relevant expense captions on the face of the income statement. This standard is effective for the Company’s annual reporting period beginning January 1, 2027, and interim reporting periods beginning January 1, 2028. Early adoption is permitted. The Company is currently evaluating the effects of adopting this new accounting guidance. NOTE 2 – INVENTORIES Inventories are stated at the lower of cost or net realizable value. Adjustments are made to standard cost, which approximates actual cost on a first-in, first-out basis. We estimate reductions to inventory for obsolete, slow-moving, excess and non-salable inventory by reviewing current transactions and forecasted product demand. We evaluate our inventories on an item-by-item basis and record inventory adjustments accordingly. Inventories consisted of the following components: March 31, 2026 December 31, 2025 (in thousands) Raw material $ 3,011 $ 2,912 Work-in-process 1,881 1,661 Finished goods 1,256 1,137 Inventories $ 6,148 $ 5,710 10 Table of Contents NOTE 3– PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment consisted of the following components: March 31, 2026 December 31, 2025 (in thousands) Leasehold improvements $ 361 $ 356 Equipment 4,053 4,242 Sales demonstration equipment 1,031 1,029 5,445 5,627 Less accumulated depreciation 4,745 4,820 Property, plant and equipment, net $ 700 $ 807 NOTE 4 – OTHER ACCRUED LIABILITIES Other accrued liabilities consisted of the following components: March 31, 2026 December 31, 2025 (in thousands) Lease liability - short term $ 698 $ 690 Product warranty 515 517 Sales return reserve 32 32 Other taxes 21 60 Severance accrual 973 - Other 34 29 Other accrued liabilities $ 2,273 $ 1,328 During the three months ended March 31, 2026, the Company recorded approximately $ 1.0 million of employee-related costs associated with a workforce reduction in its Germany operations. These costs consisted primarily of severance and related employee termination benefits, as well as legal and other costs incurred in connection with the workforce reduction. As of March 31, 2026, accrued liabilities related to these termination benefits were approximately $ 973,000 , which are expected to be paid within the next twelve months. The changes in our product warranty liability at for the three months ending March 31, 2026 and year ended December 31, 2025 are as follows: March 31, 2026 December 31, 2025 (in thousands) Product warranty liability, beginning balance $ 517 $ 350 Net expenses 978 576 Warranty claims ( 978 ) ( 576 ) Accrual revisions ( 2 ) 167 Product warranty liability, ending balance $ 515 $ 517 11 Table of Contents NOTE 5 – OPERATING LEASE COMMITMENTS We have commitments under non-cancellable operating leases and other agreements, primarily for factory and office space, with initial or remaining terms of one year or more as of March 31, 2026, are as follows: March 31, 2026 (in thousands) 2026 (remaining) $ 585 2027 700 2028 433 2029 369 2030 - And Thereafter - Total 2,087 Less imputed interest ( 154 ) Total operating lease liabilities $ 1,933 For the largest lease component, the Company has three facilities with our headquarters and primary engineering and operational functions located in Redmond, Washington. Our two subsidiary facilities in Munich, Germany and Shanghai, China provide extended worldwide sales, service, engineering and operation services. The components of our lease expense for the three months ended March 31, 2026, include facility related operating lease costs of $ 189,000 , and short-term lease costs of $ 7,800 . In the prior year, components of our lease expense for the three months ended March 31, 2025, include facility related operating lease costs of $ 182,000 , and short-term lease costs of $ 9,500 . There were no new operating leases during the three months ended March 31, 2026. The Redmond, Washington headquarters facility lease runs to October 31, 2029, at approximately 20,460 square feet. The lease for the facility located in Shanghai, China runs to October 31, 2027, at approximately 19,400 square feet. The lease for the facility located near Munich, Germany runs to August 2027, at approximately 4,895 square feet. The following table presents supplemental balance sheet information related to leases as of March 31, 2026, and December 31, 2025: Balance at March 31, 2026 Balance at December 31, 2025 (in thousands) Right-of-use assets (Long-term other assets) $ 1,836 $ 2,005 Lease liability-short term (Other accrued liabilities) $ 698 $ 690 Lease liability-long term (Operating lease liabilities) $ 1,235 $ 1,411 NOTE 6 – OTHER COMMITMENTS We have purchase obligations for inventory and production costs as well as other obligations such as capital expenditures, service contracts, marketing, and development agreements. Arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure and approximate timing of the transaction. Most arrangements are cancelable without a significant penalty, and with short notice, typically less than 90 days. As of March 31, 2026, we had confirmed contracts with a commitment of approximately $ 596,000 to be paid within one year and $ 480,000 to be paid beyond one year. 12 Table of Contents NOTE 7 – CONTINGENCIES As of March 31, 2026, we were not a party to any legal proceedings or aware of any indemnification agreement claims, the adverse outcome of which in management’s opinion, individually or in aggregate, would have a material adverse effect on our results of operations or financial position. NOTE 8 – INCOME TAXES Income tax expense for the first quarter of 2026 and 2025 primarily related to foreign and minor state taxes. Benefit or provision for income taxes for the three months ended March 31, 2026, and 2025, was a provision of $ 0 and $ 21,000 , respectively, and the effective tax rates for these periods were 0 % and 5.82 %, respectively. The difference between our effective tax rates for the three months ended March 31, 2026 and 2025, and the U.S. statutory rate of 21 % was primarily attributable to the impact of a full valuation allowance on our net deferred tax assets, as well as foreign taxes. Our consolidated effective tax rate decreased for the three months ended March 31, 2026, compared to the same period in the prior year primarily due to operational results in the first quarter of 2026. NOTE 9 – EARNINGS PER SHARE Basic earnings per share is calculated based on the weighted average number of common shares outstanding during each period. Diluted earnings per share is calculated based on these same weighted average shares outstanding plus the effect of potential shares issuable upon assumed exercise of stock options based on the treasury stock method. Potential shares issuable upon the exercise of stock options are excluded from the calculation of diluted earnings per share to the extent their effect would be anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, 2026 March 31, 2025 (in thousands except per share data) Numerator for basic and diluted earnings (loss) per share: Net income (loss) $ ( 3,170 ) $ ( 382 ) Denominator for basic earnings (loss) per share: Weighted-average shares 9,393 9,238 Employee stock options and awards - - Denominator for diluted earnings (loss) per share: Adjusted weighted-average shares & assumed conversions of stock options 9,393 9,238 Basic and diluted earnings (loss) per share: Basic earnings (loss) per share $ ( 0.34 ) $ ( 0.04 ) Diluted earnings (loss) per share $ ( 0.34 ) $ ( 0.04 ) 13 Table of Contents The weighted average number of shares outstanding used to compute earnings (loss) per share included the following: Three Months Ended March 31, 2026 March 31, 2025 Restricted Stock Units 104,994 84,336 Performance Stock Units 18,081 16,180 Stock Options 685 - Options to purchase 200,000 and 200,000 shares were outstanding as of March 31, 2026 and 2025, respectively, but were excluded from the computation of diluted earnings per share for the periods then ended because the options were anti-dilutive. NOTE 10 – SHARE-BASED COMPENSATION For share-based awards granted, we have recognized compensation expense based on the estimated grant date fair value method. For these awards we have recognized compensation expense using a straight-line amortization method and reduced for estimated forfeitures. Three Months Ended March 31, 2026 March 31, 2025 (in thousands) Cost of goods sold $ 12 $ 25 Research and development 2 48 Selling, general and administrative 63 101 Total share-based compensation $ 77 $ 174 Equity awards granted during the three months ended March 31, 2026 and 2025 were as follows: March 31, 2026 March 31, 2025 Restricted Stock Units - 10,000 Performance Stock Units - - Employee Restricted Stock Units (“RSUs”) typically vest annually over three or four years and employee Non-Qualified stock options typically vest quarterly over four years and have a six-year exercise period. Non-employee director RSUs typically vest over the earlier of one year or the next annual meeting of shareholders and Non-Qualified stock options vest over three years and have a six-year exercise period. Performance Stock Units (“PSUs”) typically cliff vest at the end of the performance period and the performance metric for 2023 awards is cumulative revenue growth over the three-year period ending December 31, 2025, with a cumulative revenue threshold, target, and maximum performance measure. For 2024 awards, the performance metrics included revenue growth, EBITDA and project objective targets over the three-year period ending December 31, 2026. There were no Performance Stock awards granted in 2025 or 2026. 14 Table of Contents The remaining unamortized expected future share-based compensation expense and remaining amortization period associated with award grants of RSUs, PSUs and unvested options at March 31, 2026 and 2025 are: March 31, 2026 March 31, 2025 Unamortized future equity compensation expense (in thousands) $ 701 $ 1,237 Remaining weighted average amortization period (in years) 1.80 2.21 NOTE 11 – SEGMENT INFORMATION Data I/O operates as a single segment entity, to design, manufacture, and sell programming systems and services. We operate in three separate locations — Redmond, Washington; Shanghai, China; and Munich, Germany — these locations function as part of a single, integrated business and all operations are strategically aligned to support this objective. The accounting policies of the programming system segment are the same as those described in the summary of significant accounting policies. The measure of segment assets is reported on the balance sheet as total consolidated assets. Our Chief Operating Decision Maker (“CODM”) is the President/Chief Executive Officer who reviews the Company’s financial performance on a consolidated basis without distinguishing between different business lines or geographic areas for the purpose of making operating decisions, allocating resources and evaluating financial performance. Financial performance is assessed using operating results, actual net income vs. plan, balance sheet fluctuations, and other key performance indicators. Significant single segment expense categories that are provided to the CODM and included in the reported segment operating profits are outlined in the following table: Three Months Ended (in thousands) March 31, 2026 March 31, 2025 Net sales $ 3,250 $ 6,176 Cost of goods sold 1,641 2,988 Gross margin 1,609 3,188 Operating Expenses: Employee expenses 2,046 2,255 Customer acquisition costs 208 293 Professional and outside services 978 541 Occupancy costs (OPEX portion) 370 219 Depreciation & amortization 106 126 Other expense (income) 1,045 131 Total operating expenses 4,753 3,565 Operating income (loss) $ ( 3,144 ) $ ( 377 ) NOTE 12 – PRIOR PERIOD REVISION The Company identified an error in the prior‑year disaggregated revenue amounts of net sales by type. As such, the Company has revised the net sales by type for the quarter ended March 31, 2025. This correction affected only the disaggregation of net sales among Platform, Adapter, and Software and Services sales and did not impact the Company’s previously reported consolidated balance sheets, statements of operations, comprehensive income (loss), or statements of cash flows. While the total revenue was not affected, the Company has revised the presentation of net sales by type for the quarter ended March 31, 2025 to enhance comparability. Effect of Revision Net sales by type March 31, 2025 As Previously Reported Effect of Revision March 31, 2025 As Revised (in thousands) Platform Sales $ 3,317 $ ( 263 ) $ 3,054 Adapter Sales 1,963 ( 20 ) 1,943 Software and Services Sales* 896 283 1,179 Total $ 6,176 $ - $ 6,176 * includes service and parts sales associated with equipment service contracts NOTE 13 – SUBSEQUENT EVENTS Subsequent to quarter end, the Company entered into a definitive securities purchase agreement with institutional investors for aggregate gross proceeds of approximately $ 9.0 million, consisting of a combination of common stock, convertible debentures, and warrants. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second quarter of 2026. Nasdaq rules will limit the number of shares that may be issued upon conversion or exercise of the convertible debentures and warrants absent shareholder approval. 15 Table of Contents