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Item 1A. Risk Factors

2026-06-24 compared with 2025-06-25 · 213 added, 172 removed, 285 unchanged (57% of the section changed)

Investing in our common stock involves risk.

You should carefully consider the risks and uncertainties described below, together with all of the other information set forth in this Annual Report on Form 10-K and documents incorporated by reference herein, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial Statements and related notes, before making a decision to invest in our common stock.

Investing in our common stock involves risk and our future results may be affected by a number of factors over which we have little or no control.

You should carefully consider the risks and uncertainties described below, together with all of the other information set forth in this Form 10-K and documents incorporated by reference herein, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial Statements and related notes, before making a decision to invest in our common stock.

The discussion in this Item 1A contains forward-looking statements discussed above.

The risks and uncertainties described below may not be the only ones we face.

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Macroeconomic Risks

Geopolitical issues, conflicts, governmental actions, including the imposition of tariffs, changes in laws, regulations, and policies, and other global events could adversely affect our results of operations and financial condition.

Such factors and conditions can create trade restrictions, increase tariff costs, increase prices for raw materials and components used in our products, increase the cost of sales, decrease demand for our products, increase cost of compliance, cause material business interruptions, or have other implications on our business operations.

Additionally, such issues, actions, conflicts, or sanctions may significantly devalue various global currencies and have a negative impact on economies in geographies in which we do business.

These impacts could reduce profitability and could have a material adverse effect on our results of operations and financial condition if they escalate into geographies in which we do business, manufacture our products, or obtain raw materials and components for production.

During fiscal 2025, our business, operations, and financial results have been impacted by the changing United States import tariff laws and the resulting reactions of other countries.

Our complex manufacturing processes in the United States, which generate approximately 80 percent of our manufactured output, rely on direct components and inputs from over 40 countries.

China has been the greatest source for semiconductor type components, including LEDs, printed circuit boards, and other integrated circuits.

United States tariff rates on these imports can range from 10 percent to much higher levels, with proposed or applied rates as high as 170 percent for certain items of Chinese origin.

In addition to higher costs due directly to tariffs, some of our suppliers may be subject to tariffs in their supply chain that they will pass on to us, or alternative suppliers are increasing and charging higher prices or may not have the capacity and reliability needed, which also could result in higher prices paid by us.

In addition, some countries, like Canada, are imposing retaliatory tariffs on United States goods, which increases our cost to export United States-made displays into Canada.

Although we can mitigate some of the additional tariff costs through pricing to customers or by shifting manufacturing location, changing suppliers, or redesigning for available lower cost and/or lower tariffed components, we may not be able to avoid additional costs, increase prices to customers to completely compensate for the tariffs, or timely mitigate the cost impacts of the changing global tariff structure.

These rates and market dynamics have been changing dynamically and frequently which makes future costs and impacts for tariff related factors indeterminable.

In addition, our competitors have near-shored production or import into the United States under favorable exemptions not available to us which can create a competitive imbalance.

Changes in trade policies and the imposition of tariffs, have affected, and may continue to affect, our results of operations and financial condition.

During fiscal 2025 and fiscal 2026, our business, operations, and financial results were impacted by changes in United States import tariff policies and the resulting responses from other countries.

Our complex manufacturing processes in the United States, which generate approximately 80 percent of our manufactured output, rely on components and inputs sourced from over 40 countries.

China has historically been a significant source of semiconductor-related components, including LEDs, printed circuit boards, and other integrated circuits.

In addition, certain jurisdictions, including Canada, have imposed or may impose retaliatory tariffs on United States-origin goods, increasing the cost of exporting our products into those markets.

United States tariff rates on these imports have ranged from approximately 10 percent to significantly higher levels, with certain proposed or applied rates substantially exceeding these levels.

While certain U.S.

tariffs have been struck down by the courts, the United States has subsequently announced additional new tariffs on virtually all nonexempt imports, and the U.S.

tariff rate remains elevated.

Shifts in tariffs, trade agreements, import and export restrictions, trade sanctions, sector-specific trade barriers, and other governmental trade actions, whether enacted by the United States or other countries, especially those instituted in significant markets or markets where our significant customers or suppliers are located, and the associated uncertainty of long-term trade policies, could impact our sales volume, sales price, and production and other costs.

Changes in trade policies may also cause disruptions to material sourcing and availability, global supply chains and logistics, and access to end markets.

Additionally, changes in U.S.

trade policy and associated responses from trading partners may create shifts in global market dynamics, disrupt the long-term planning process for governments and private

enterprises, and result in continued global financial market volatility.

The impact of these changes in trade policies and the resulting trade and market uncertainty could have a negative impact on our results of operations.

Following the invalidation of certain tariff actions, the Company has submitted, and will continue to submit, tariff recovery claims through the U.S.

Customs and Border Protection (“CBP”) Commercial Accounting Program and Enforcement process seeking a refund of tariffs paid pursuant to the International Emergency Economic Powers Act (“IEEPA”).

The amount, timing, and realization of any refund or credit remains uncertain and subject to CBP review.

In addition to direct tariff costs, our suppliers have incurred tariff-related costs in their own supply chains and the uncertainty of the tariff landscape continues to make these tariff-related costs volatile.

Many of our supplies have passed these tariff-related costs to us and these costs may increase in the future.

Alternative suppliers may charge higher prices or may not have sufficient capacity or reliability, which could further increase our costs or disrupt supply.

While we seek to mitigate these impacts through pricing actions, changes in manufacturing locations, supplier diversification, and product redesign, we may not be able to fully offset increased costs or implement such changes on a timely basis.

Tariffs and trade policies are expected to continue to evolve, and the United States, other countries, and international trade bodies may institute new tariffs or more restrictive trade policies or remedies.

As a result, we may face additional uncertainties and adverse impacts on our business, financial condition, and results of operations.

In addition, competitors may benefit from manufacturing or sourcing strategies, including near-shoring or alternative supply chain structures, or may qualify for tariff exemptions or more favorable trade treatment that are not available to us, which could place us at a competitive disadvantage.

Impacts on our business include, but are not limited to:

• increases in raw material input costs for specific tariffs or changes in the availability of components;

• our inability to plan effective and cost efficient supply chain structures for the changing tariff landscape, causing increases in costs to operate our business and thus lower profitability;

• hesitancies or delays by customers in placing orders due to the uncertainty of tariff rates and their impact on the economy;

• charging higher prices than our competitors, creating competitive disadvantages and loss of business

(i) increased raw material and component costs due to tariffs or supply constraints;

(ii) disruptions in the availability of components;

(iii) challenges in planning and optimizing our global supply chain, leading to increased operating costs and reduced profitability;

(iv) delays or reductions in customer orders due to economic uncertainty or tariff-related pricing impacts;

and (v) the need to increase prices, which may reduce demand or adversely affect our competitive position.

Global conflicts could adversely impact our business and financial results.

Geopolitical tensions or conflicts in regions where we conduct business, including the Middle East, may result in delays in customer decision-making, project timing, or order activity, and could reduce or disrupt demand in affected markets.

To date, we have not experienced material disruptions from certain regional conflicts;

however, ongoing uncertainty may negatively impact customer demand, project timing, or execution in these regions in future periods, and may also restrain shipping routes, cause increases in inflation, or result in cyberattacks.

We cannot predict the extent to which these factors may affect our business, financial condition, or results of operations.

Our business is sensitive to global economic conditions, including recessions, inflation, and interest rate fluctuations.

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restricted credit;

poor liquidity;

reduced liquidity;

reduced corporate profitability;

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In addition, these demand fluctuations may reduce our ability to effectively utilize our capacity and negatively impact our results of operations.

We rely on global supply chains, and inflationary pressures can increase our input costs faster than our ability to raise prices.

These could limit or eliminate our ability to sell our products or receive parts and components through our global supply chains and have a material adverse effect on our results of operations.

The rate of interest we pay on our asset-based lending facility with JPMorgan Chase Bank, N.A.

is correlated to the Standard Overnight Fund Rate (“SOFR”), which is determined by governmental policy decisions.

Increases in SOFR will increase the rate of any borrowing on this facility.

We rely on global supply chains, and inflationary pressures may increase our input costs faster than our ability to raise prices.

In addition, disruptions in global supply chains may limit our ability to obtain parts and components or increase the cost of those inputs.

These factors could have a material adverse effect on our results of operations.

The interest rates applicable to borrowings under our credit agreement with JPMorgan Chase Bank, N.A.

are based on variable rate benchmarks, including the Secured Overnight Financing Rate (“SOFR”), or alternative base rates, and are influenced by broader market conditions and monetary policy.

As a result, increases in these benchmark rates will increase the cost of borrowings under our credit facility.

In addition, we incur commitment fees on unused portions of our revolving credit facility, which may increase our overall financing costs.

Unexpected events, including natural disasters, weather events, wars, terrorist acts, and pandemics, may increase our cost of doing business or disrupt our operations.

We operate manufacturing operations in three locations in the United States, Brookings, South Dakota, Sioux Falls, South Dakota, and Redwood Falls, Minnesota, and we have production facilities in Ireland and China.

Unexpected events could result in damage to, and a complete or partial closure of, one or more of our manufacturing facilities, which could make it difficult to supply our customers with product and provide our employees with work, thereby adversely affecting our business, operating results, or financial condition.

Additionally, such events could disrupt our data centers or cloud-based infrastructure, potentially rendering critical computing processes and systems temporarily unavailable, which may impair our ability to operate effectively.

The occurrence of one or more unexpected events in the United States or in other countries may impact the operations of our suppliers and customers, may disrupt our operations and could create additional uncertainties, forcing customers to reduce, delay, or cancel already planned projects or cause our suppliers not to perform, resulting in parts and component shortages.

Additionally, we plan to open a new manufacturing facility in Saltillo, Mexico during fiscal 2027.

Unexpected events could result in damage to, and a complete or partial closure of, one or more of our manufacturing facilities, which could make it difficult to manufacture and deliver products to our customers, thereby adversely affecting our business, operating results, or financial condition.

Additionally, such events could disrupt our data centers or cloud-based infrastructure, or result in cybersecurity incidents, potentially rendering critical computing processes and systems temporarily unavailable, which may impair our ability to operate effectively.

Risks Related to Our Business and Industry

We depend on a single-source or a limited number of suppliers for our raw materials and components from countries around the world.

The loss, an interruption, or a material change in our business relationships with our suppliers or in global supply chain conditions can cause a disruption in our supply chains and a substantial increase in the costs of such raw materials and components.

The loss, interruption, or material change in our business relationships with our suppliers or in global supply chain conditions may result in a disruption in our supply chains and a substantial increase in the costs of such raw materials and components.

Geopolitical tensions can impact our ability to obtain key materials and components.

Such changes can result in extended lead times or supply changes, which could disrupt or delay our scheduled product deliveries to our end user customers and may result in the loss of sales and end user customers and cause harm to our sales, financial condition, and results of operations.

Such changes can result in extended lead times or supply changes, which could disrupt or delay our scheduled product deliveries to our customers and may result in lost sales and customer relationships and cause harm to our sales, financial condition, and results of operations.

The performance and financial condition of a supplier may cause us to alter our business terms with that supplier, cease doing business with that particular supplier, or change our sourcing practices.

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Our supply chain includes semiconductor-type components including LEDs, printed circuit boards, and other integrated circuits, which are sourced or packaged directly or indirectly primarily through suppliers in Taiwan or China.

Imports from China to the United States have been subject to increased import/export controls and tariffs.

Geopolitical tensions, governmental actions, and shipping disruptions can impact our suppliers’ ability to deliver components and raw materials.

Imports from China to the United States have been subject to increased import/export controls and tariffs, which may increase costs, limit availability of key components, or disrupt our supply chain.

Geopolitical tensions, tariff and trade controls, other governmental actions, and shipping disruptions can impact our suppliers’ ability to deliver components and raw materials.

An interruption from our suppliers of their supply of raw materials or components could affect our ability to manufacture our products until a new source of supply is located and, therefore, could have a material adverse effect on our business, financial condition, or results of operations.

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In order to reduce manufacturing lead times and plan for adequate component supply, from time to time, we may issue purchase orders or prepay for components and products that are non-cancelable and non-returnable.

In addition, we may purchase components and products that have extended lead teams to ensure adequate supply to support long-term customer demand and mitigate the impact of supply disruptions.

If we are unable to use all of the components we have purchased, we may have excess inventory or obsolescence, or increased inventory or carrying costs, which could have an adverse impact on our results of operation or financial condition.

In addition, we may purchase components and products that have extended lead times to ensure adequate supply to support long-term customer demand and mitigate the impact of supply disruptions.

We operate in highly competitive markets and face significant competition and pricing pressures.

If we are not able to continue to enhance existing products or are unable to keep up with the rapidly changing product developments and new technologies, or market and compete effectively in our new or enhanced products that respond to customer needs and preferences, we could lose market share and orders, which would negatively impact our results of operations.

The electronic display industry is characterized by ongoing product improvement, innovations, and development and low-cost competition.

If we are not able to continue to enhance existing products or are unable to keep up with the rapidly changing product developments and new technologies, or effectively market and compete with our new or enhanced products that respond to customer needs and preferences, we could lose market share and orders, which would negatively impact our results of operations.

The electronic display industry is characterized by ongoing product improvement, innovation, and development and low-cost competition.

We compete against products produced in foreign countries and the United States.

Our competitors may develop lower-cost or lower-featured products, may be willing to charge lower prices to increase their market share, bring new products to the market faster, or market new and unique product, service, and controller offerings.

Our competitors may develop lower-cost or lower-featured products, may be willing to charge lower prices to increase their market share, bring new products to the market faster, or offer new or differentiated products, services, and controller offerings.

Some competitors have more capital and other resources, which may allow them to take advantage of acquisition opportunities or adapt more quickly to changes in customer requirements.

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We may be unable to protect our intellectual property rights effectively, or we may infringe upon the intellectual property rights of others, either of which may have a material adverse effect on our operating results and financial condition.

We rely on a variety of intellectual property rights we use in our products and services.

We rely on a variety of intellectual property used in our products and services.

We may not be able to successfully preserve our intellectual property rights in the future, and these rights could be invalidated, circumvented, or challenged.

In particular, the laws of certain countries in which our products are sold do not protect our products and intellectual property rights to the same extent as the laws of the United States.

In particular, the laws of certain countries in which our products are sold do not protect our products and intellectual property to the same extent as the laws of the United States.

If litigation is necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others, such litigation could result in substantial costs and diversion of resources even if we ultimately prevail.

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We cannot control all of the various factors that might affect our suppliers’ timely and effective delivery of raw materials and components to our manufacturing facilities or the availability of freight capacity for us to deliver products to our customers.

In addition to increased costs, these factors could delay delivery of products, which may result in the assessment of liquidated damages or other contractual damages that could negatively impact our profits.

Our utilization of a complex supply chain for raw material and component imports and the global distribution of our products makes us vulnerable to many risks, including, among other things, shortages or delays because of work restrictions;

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Cost inflation in, and shortages of, raw materials, components, and related transportation and tariff costs can have a significant impact on our price competitiveness and/or ability to produce our products, which have caused and could continue to cause harm to our sales, financial condition, and results of operations.

Cost inflation and shortages of the raw materials and components used to manufacture our products have and may continue to occur due to various factors, such as worldwide demand, natural disasters, logistic disruptions, war and other conflicts, and trade regulations.

Cost inflation and shortages of the raw materials and components used to manufacture our products have and may continue to occur due to various factors, such as worldwide demand, natural disasters, logistics disruptions, war and other conflicts, and trade regulations.

In addition, we are currently experiencing cost inflation across certain commodity and electronic component categories.

Aluminum, which is used extensively in our display cabinets, structures, and related products, has experienced price increases driven by market conditions, tariffs, and supply chain factors, increasing our manufacturing costs.

Similarly, increased industry demand for certain computing components associated with artificial intelligence and data center infrastructure investments has contributed to higher costs and supply constraints for certain inputs used in our products.

While we continue to pursue sourcing, design, and pricing actions to mitigate these impacts, sustained inflation or shortages in these categories could adversely affect our margins, competitiveness, financial condition, and results of operations.

Electronic and other components and materials used in our products are sometimes in short supply, which may impact our ability to meet customer demand.

Transportation costs and availability can fluctuate due to fluctuations in oil prices and other social, economic, and geopolitical factors.

If we experience shortages or increases in the prices we pay for raw materials and components and are unable to pass on those increases to our customers or are unable to manufacture our products at all or on a timely basis, it could negatively affect our business, financial condition, or results of operations as such conditions have in the past.

Certain key components, including semiconductor memory and related electronic inputs, have experienced supply constraints and cost increases, which have increased, and may continue to increase, our input costs and adversely affect our results of operations.

Trade disruptions and trade policies between countries could make us subject to additional regulatory costs and challenges, affect global economic and market conditions, and contribute to volatility in foreign exchange markets, which we may be unable to effectively manage through our foreign exchange risk management program.

We monitor for these types of situations and evaluate ways to minimize these impacts through vendor negotiations, alternative sources, and potential price adjustments.

We seek to mitigate these impacts through vendor negotiations, alternative sourcing, and pricing adjustments;

however, these efforts may not be successful.

Our global manufacturing and sales operations expose us to risks that could materially and adversely impact our business.

Expanding our international footprint remains a key part of our growth strategy.

However, operating across multiple countries exposes us to a variety of risks that may not be present in our domestic operations.

Expanding our international footprint is an important part of our growth strategy;

however, operating across multiple countries exposes us to risks that may not present in our domestic operations.

We manufacture certain products and source components in multiple international locations, including China, and a portion of these products and components are imported into the United States and other markets, which increases our exposure to tariffs, trade restrictions, and other cross-border regulatory risks.

These risks include complex and evolving regulatory environments, political and economic instability, exposure to foreign currency fluctuations, differing labor laws and employment practices, and challenges related to infrastructure, logistics, and supply chain reliability.

We may also face increased costs or delays due to tariffs, trade restrictions, customs regulations, or changes in international trade agreements and policies.

In addition, international operations often require significant upfront investment in market development, personnel, and facilities, which may not yield immediate returns.

In addition, international operations, including our manufacturing expansion in Mexico, often require significant upfront investment in market development, personnel, and facilities, which may not yield immediate returns.

Legal systems, intellectual property protections, and enforcement mechanisms may be less predictable or less robust in some jurisdictions, increasing our exposure to potential disputes or infringement.

These and other factors may impact our ability to operate efficiently and profitably in international markets.

While we take steps to manage these risks, there can be no assurance that our efforts will be successful or that international operations will not have a material adverse effect on our business.

Although we attempt to manage these risks, there can be no assurance that our efforts will be successful or that international operations will not have a material adverse effect on our business.

We depend on third parties to complete some of our contracts.

Depending on a contract’s scope of work, we may hire third-party subcontractors to perform on-site installation and service-related activities, hire manufacturers of structures or elements of structures related to on-site installations, hire contract manufacturers for certain product lines, or purchase specialty non-display related system elements from other companies.

If we are unable to hire qualified subcontractors, find qualified manufacturers for on-site elements, find qualified contract manufacturers, or purchase specialty non-display system elements, our ability to successfully complete a project could be impaired.

Depending on a contract’s scope of work, we may engage third-party subcontractors for on-site installation and service-related activities, use manufacturers for structures or elements related to installations, rely on contract manufacturers for certain product lines, or purchase specialty non-display system components from third parties.

If we are unable to engage qualified subcontractors, manufacturers, or other third-party providers, our ability to successfully complete a project could be impaired.

If we are not able to locate qualified third party subcontractors or manufacturers, the amount we are required to pay may exceed what we have estimated, and we may suffer reduced margins or losses on these contracts.

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These third parties are subject to fluctuations in global economic cycles and conditions and other business risk factors which may adversely impact their ability to operate their businesses.

The performance and financial condition of the third parties may cause us to alter our business terms or to cease doing business with a particular third party or change our sourcing practices.

The performance and financial condition of the third parties may cause us to modify our business terms or cease doing business with a particular third party.

We may not be able to utilize our capacity efficiently or accurately plan our capacity requirements, which may materially and adversely affect our business and operating results.

We increase and decrease our production and services capacity and the overhead supporting order fulfillment based on anticipated market demand.

Market demand, however, has not always developed as expected or remained at a consistent level.

We adjust our production and services capacity and the overhead supporting order fulfillment based on anticipated market demand.

Market demand, however, has not always developed as expected or remained consistent.

These underutilization and overbooking capacity risks can potentially decrease our profitability and result in the impairment of certain assets.

The following factors are among those that could complicate capacity planning for market demand:

• changes in the demand for and mix of products that our customers buy;

• tariff landscape and import/export controls;

• our ability to scale down or to add and train our manufacturing and services staff in advance of demand changes;

• the market’s pace of technological change;

• variability in our manufacturing or services productivity;

• long lead times for and availability of raw materials and components used in production;

• our ability to engage qualified third parties;

• geography of the order and related shipping methods;

• long lead times for our plant and equipment expenditures.

(i) changes in the demand for and mix of products that our customers buy;

(ii) tariff landscape and import/export controls;

(iii) our ability to scale down or to add and train our manufacturing and services staff in advance of demand changes;

(iv) the market’s pace of technological change;

(v) variability in our manufacturing or services productivity;

(vi) long lead times for and availability of raw materials and components used in production;

(vii) our ability to engage qualified third parties;

(viii) geographic location of orders and related shipping methods;

and (ix) long lead times associated with capital expenditures for plant and equipment.

Our results of operations on a quarterly and annual basis have and are likely to continue to fluctuate and be substantially affected by the size and timing of large contract order awards.

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Market demand has not always developed as expected or remained at a consistent level.

Adjusting supply chain material planning and production and services capacity to meet this varied demand can increase costs.

Adjusting supply chain material planning and production and services capacity to meet this variability in demand can increase costs.

Demand for our products is also influenced by trends and capital spending within key end markets, which may be adversely affected by economic or industry-specific conditions.

Large contracts or customer awards include projects for college and professional sports facilities markets, the OOH niche, the transportation market, and the large spectacular niche.

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Some factors that may cause our operating results to vary due to timing and size of the awards include:

• the timing of orders and related deliveries, including delays or cancellations of orders;

• our ability to obtain raw materials and components timely and at reasonable prices;

• our ability to adjust and utilize production and services capacity;

• our ability to engage third parties to support production and fulfillment;

• new product introductions;

• variations in product mix;

• customer financial wherewithal and the related economic conditions impacting their business.

(i) the timing of orders and related deliveries, including delays or cancellations of orders;

(ii) our ability to obtain raw materials and components timely and at reasonable prices;

(iii) our ability to adjust and utilize production and services capacity;

(iv) our ability to engage third parties to support production and fulfillment;

(v) new product introductions;

(vi) variations in product mix;

and (vii) customer financial wherewithal and the related economic conditions impacting their business.

Operating results in one or more quarters of a fiscal year may not be indicative of future operating results.

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Unanticipated costs that exceed our original estimates may not be recoverable under fixed price contracts.

Unanticipated cost increases may occur as a result of several factors including, but not limited to:

Unanticipated cost increases may occur as a result of several factors including, but not limited

increases in the cost, shortages or non-availability of materials or labor;

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The cumulative catch-up method is used to account for revisions in estimates.

Backlog may not be indicative of future revenue or profitability.

Our backlog may not be indicative of future revenue, profitability, or results of operations.

Many of our products have long sales, delivery, and acceptance cycles.

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Orders normally contain cancellation provisions to permit our recovery of costs expended as well as a pro-rata portion of the profit.

If projects are delayed, revenue recognition can occur over longer periods of time, and projects may remain in backlog for extended periods of time.

If we receive relatively large orders in any given quarter, fluctuations in the levels of the quarterly backlog can result because the backlog may reach levels which may not be sustained in subsequent quarters.

Unanticipated events resulting in credit losses to us could have a material adverse impact on our financial results.

If projects are delayed, revenue recognition may be extended over longer periods, and projects may remain in backlog for longer than initially anticipated.

If we receive relatively large orders in any given quarter, fluctuations in quarterly backlog levels may occur, as backlog levels in one period may not be sustained in subsequent periods.

Unanticipated events resulting in credit losses could have a material adverse impact on our financial results.

Significant portions of our sales are to customers who place large orders for custom products.

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However, because some of our exposure to credit losses is outside of our control, unanticipated events resulting in credit losses could have a material adverse impact on our operating results.

As of April 26, 2025, a provision for expected credit losses of $15.5 million was recorded as management’s analysis concluded the loans related to an affiliate, in which the Company has an investment, are anticipated to be uncollectible.

As of May 2, 2026, a provision for expected credit losses of $3.8 million was recorded as management’s analysis concluded the loans related to an affiliate, in which the Company has an investment, are anticipated to be uncollectible.

Our actual results could differ from the estimates and assumptions we make to prepare our financial statements, which could have a material adverse impact on our financial condition and results of operations.

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These warranties require us to repair or replace faulty products and meet certain performance standards, among other customary warranty provisions.

Our products are often complex systems that must operate reliably in a variety of environmental and application conditions, and may require integration with customer infrastructure or third-party components.

Failures, performance issues, or integration challenges could result in increased costs, customer dissatisfaction, contractual claims, or reputational harm.

Although we continually monitor our warranty claims and accrue a liability for estimated warranty costs, unanticipated claims could have a material adverse impact on our financial results.

In some cases, we may be able to subrogate a claim back to a subcontractor or supplier if the subcontractor or supplier supplied the defective product or performed the service, but this may not always be possible.

In some cases, we may be able to subrogate a claim back to a subcontractor or supplier if the subcontractor or supplier

supplied the defective product or performed the service, but this may not always be possible.

In addition, the need to repair or replace products with design and manufacturing defects could adversely affect our reputation.

Remediation of a claim may take time and could result in lost or deferred revenue, lead to costly warranty expenses, and have a material adverse impact on our financial condition and operating results.

The terms and conditions of our credit facilities impose restrictions on our operations, and if we default on our credit facilities, it could have a material adverse effect on our results of operations and financial condition, make us vulnerable to adverse economic or industry conditions, and cause liquidity issues.

The terms and conditions of our credit facilities impose restrictions limiting our ability to incur debt, contingent liabilities, lease obligations or liens;

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to dispose of substantially all our assets;

acquire or purchase a business or its assets;

to acquire or purchase a business or its assets;

to pay dividends;

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The financial, management and other risks and challenges associated with these activities include, but are not limited to, the following:

• diversion of management attention;

• difficulty with integrating acquired businesses;

• adverse impact on overall profitability if the expanded operations or investments in affiliates do not achieve the strategic benefits forecasted;

• potential loss or adverse relationship with or a change of key employees, customers, or suppliers of the acquired business;

• inability to effectively manage our expanded operations;

• difficulty with the integration of different corporate cultures;

• personnel issues;

• increased expenses;

• assumption of unknown liabilities and indemnification obligations;

• potential disputes with the buyers or sellers;

• the time involved in evaluating or modifying the financial systems of an acquired business and the establishment of appropriate internal controls;

• incorrect estimates made in the accounting for the transaction that cause misstatements of acquisition assets and liabilities;

• incorrect assumptions and estimates made in accounting for the value of such asset.

(i) diversion of management attention;

(ii) difficulty with integrating acquired businesses;

(iii) adverse impact on overall profitability if the expanded operations or investments in affiliates do not achieve the strategic benefits forecasted;

(iv) potential loss or adverse relationship with or a change of key employees, customers, or suppliers of the acquired business;

(v) inability to effectively manage our expanded operations;

(vi) difficulty with the integration of different corporate cultures;

(vii) personnel issues;

(viii) increased expenses;

(ix) assumption of unknown liabilities and indemnification obligations;

(x) potential disputes with the buyers or sellers;

(xi) the time involved in evaluating or modifying the financial systems of an acquired business and the establishment of appropriate internal controls;

(xii) incorrect estimates made in the accounting for the transaction that cause misstatements of acquisition assets and liabilities;

and (xiii) incorrect assumptions and estimates made in accounting for the value of such asset.

There can be no assurance that we will engage in any acquisitions or divestitures or that we will be able to do so on terms that will result in any expected benefits.

Our investment in and advances to affiliates totaled $3.1 million as of April 26, 2025.

Our financial results are impacted negatively or positively from our proportionate share of our affiliates’ financial performance.

Any reduction or impairment of the value of an investment and related acquired assets, goodwill, or investments in affiliates would result in charge

s against earnings, which would adversely affect our results of operations in future periods.

We recorded an impairment to the value of these investments of $0 million and $6.4 million during fiscal years 2025 and 2024, respectively.

As of April 26, 2025, a provision for losses of $15.5 million was recorded, as management’s analysis concluded an affiliate note is anticipated to be uncollectible.

As of April 27, 2024, no provision for losses were recorded because management’s analysis concluded at that time that all the advanced loans to our affiliates under convertible and promissory notes (collectively, "Affiliate Notes") were collectable or realizable based on the rights of these instruments and related valuation of each affiliate.

As of May 2, 2026, we had no remaining investments in or advances to affiliates.

During fiscal 2026, we recorded a provision for losses of $3.8 million related to an affiliate note determined to be uncollectible.

In fiscal 2025, we recorded a provision for losses of $15.5 million related to a different affiliate note determined to be uncollectible.

If goodwill or other intangible assets in connection with our acquisitions become impaired, we could take significant non-cash charges against earnings.

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We perform our annual impairment test on the first day of our third fiscal quarter.

The annual impairment test for fiscal years 2025 and 2024 concluded no goodwill impairment existed.

During fiscal year 2023, we concluded that the carrying value of the Live Events and International reporting units exceeded their respective fair values and consequently recorded a $4.6 million impairment charge.

Management concluded that no goodwill impairment existed for fiscal years 2026, 2025, and 2024 based on its annual impairment testing.

We may fail to continue to attract, develop, and retain key personnel, including management personnel, which could negatively impact our operating results.

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Our future success will also depend upon our ability to attract, train, motivate, and retain qualified personnel to maintain and grow capacity.

We are currently recruiting for a new Chief Executive Officer and Chief Financial Officer, and the outcome of these searches will play an important role in shaping our future leadership and strategic direction.

We have recently appointed a new Chief Executive Officer and are currently recruiting for a new Chief Financial Officer.

The effectiveness of this leadership transition, including the timing and outcome of the Chief Financial Officer search, could impact our ability to execute our business strategy and achieve our objectives.

Although we intend to continue to provide competitive compensation packages to attract and retain key personnel, some of our competitors for these employees have greater resources and more experience, making it difficult for us to compete successfully for key personnel.

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Legislative and private sector initiatives regarding healthcare reform could result in significant changes to the United States healthcare system.

Due to the breadth and complexity of the

healthcare reform legislation and the uncertainty surrounding further reform proposals, we are not able to fully determine the impact that any healthcare reform will have in the future on company sponsored medical plans.

Due to the breadth and complexity of the healthcare reform legislation and the uncertainty surrounding further reform proposals, we are not able to fully determine the impact that any healthcare reform will have in the future on company sponsored medical plans.

The outcome of pending and future claims, investigations, or litigation can have a material adverse impact on our business, financial condition, and results of operations.

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Litigation, investigations, and regulatory proceedings are subject to inherent uncertainties, and unfavorable rulings and outcomes can and do occur.

Pending or future claims against us could result in professional liability, product liability, criminal liability, warranty obligations, indemnity claims, or other liabilities to the extent we are not insured against a loss or our insurance fails to provide adequate coverage.

Pending or future claims against us could result in professional liability, product

liability, criminal liability, warranty obligations, indemnity claims, or other liabilities to the extent we are not insured against a loss or our insurance fails to provide adequate coverage.

Also, a well-publicized actual or perceived threat of litigation could adversely affect our reputation and reduce the demand for our products.

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Any failure to maintain these systems, a network disruption, a misuse of technologies, or breaches in data security could result in business disruption or the loss of confidential or proprietary information and have a material adverse effect on our business.

We rely heavily on complex information systems and technologies for the successful operation of our business, for the support of our offerings, and for the collection and retention of business data.

Any information system failure of, or breach in security, could adversely affect our operations, at least until our data can be restored and/or the breaches remediated.

Despite the security measures we have in place, our facilities and systems and those of our third-party service providers may be vulnerable to cybersecurity breaches, acts of vandalism, computer viruses, misplaced or lost data, ransomware attacks, programming issues, and/or human errors or other similar events.

Our use and adoption of generative Artificial Intelligence (“AI”) in our business process and decision making are in the early stages and pose business risk.

The use of AI technologies can create the opportunity for potential loss or inadvertent dissemination of data and inaccurate or flawed outputs.

Any misappropriation, loss, or other unauthorized disclosure of confidential or personally identifiable information, whether by us or by our third-party service providers, could adversely affect our business and operations.

We could face significant fines and penalties under various global laws revolving around data loss, lack of adequate data protection, or lack of required reporting.

Any disruption in our digital technologies could affect our business and operations, causing potentially significant expenses to recover and modify the data systems, to reimburse customers’ losses, and to investigate and remediate any vulnerabilities, which could severely damage our reputation with customers, suppliers, employees, and investors and expose us to risk of litigation and liability.

We rely heavily on complex information systems and technologies for the successful operation of our business, the support of our offerings, and the collection and retention of business data.

Any information system failure or security breach could adversely affect our operations, and we cannot guarantee that our data could be restored and the vulnerabilities remediated.

Despite the security measures we have in place, our systems and those of our third-party service providers may be vulnerable to cybersecurity incidents, including ransomware, computer viruses, malicious attacks, programming errors, human error, or other similar events.

The increasing use of artificial intelligence (“AI”) technologies may further increase the sophistication and frequency of cybersecurity threats.

Our use of AI technologies in our business processes and decision-making may introduce additional risks.

These technologies may result in the unintended disclosure of confidential information if sensitive data is used as an input or otherwise exposed through their use.

In addition, AI systems may generate inaccurate, incomplete, or misleading outputs.

Reliance on such outputs could adversely affect our operations, decision-making, or customer relationships and could expose us to reputational harm, contractual claims, or other liabilities.

Our use of AI technologies may also give rise to intellectual property or other legal risks, including potential claims related to the use of data or outputs generated by such systems.

Any misappropriation, loss, or unauthorized disclosure of confidential or personally identifiable information, whether by us or by our third-party service providers, could adversely affect our business and operations.

We could face significant costs, including remediation, investigation, penalties, litigation, and reputational harm, any of which could materially and adversely affect our business, financial condition, and results of operations.

For further discussion of our cybersecurity programs, please the discussion set forth in this Form 10-K “Part I, Item 1C.

Cybersecurity.”

Increases in the cost or limited availability of computing infrastructure, including memory and processing resources, could adversely affect our business, financial condition, and results of operations.

Some of the services we provide to customers depend on access to substantial computing infrastructure, including memory, networking equipment, and cloud-based computing services.

Demand for high-performance computing infrastructure has increased significantly in recent years in part due to the rapid adoption and proliferation of AI, machine learning, and other data-intensive technologies.

This increased demand has contributed to supply constraints, longer procurement lead times, and higher prices in certain components, including memory and processing-related components, as well as the broader computing infrastructure.

These trends may continue or intensify as AI-related workloads expand across industries.

In particular, increased demand for memory, processors, and other key electronic components may limit availability or reduce our purchasing leverage with suppliers.

The cost of acquiring, leasing, or accessing compute and memory resources may continue to increase due to growing industry demand, supply chain constraints, geopolitical factors, inflationary pressures, changes in vendor pricing, tariffs, or other market conditions.

In addition, shortages of high-performance computing components, including advanced memory technologies and AI-optimized processors, could limit our ability to obtain sufficient capacity on acceptable terms or within required timeframes.

If we are unable to secure adequate computing or memory capacity on commercially reasonable terms, manage procurement lead times effectively, or if the costs of such infrastructure increase rapidly, or if we are unable to pass increased costs through to customers, we may experience negative effects on our business, financial condition, and results of operations.

Our global operations expose us to global regulatory, geopolitical, economic, and social changes and add additional risks and uncertainties which can harm our business, operating results, and financial condition.

Our domestic and foreign operations, sales, earnings, and strategies for profitable growth can be adversely affected by global conditions and compliance with global regulations and governmental orders.

Global conditions include political developments;

Our domestic and foreign operations, sales, earnings, and strategies for profitable growth can be adversely affected by global conditions and compliance with international laws, regulations, and governmental actions.

These conditions include political developments;

economic changes;

unfavorable trading policies;

difficulties in staffing and managing global operations;

changes in foreign and domestic governmental regulations or requirements;

or treaty and trade relationships;

the imposition of government orders that differ among jurisdictions, including mandatory closures, work-from-home, lock-down orders, and social distancing protocols;

changes in monetary and fiscal policies;

changes in laws and regulations;

or other activities of the United States and other foreign governments, agencies, and similar organizations.

These conditions include, but are not limited to, changes in a country’s or region’s economic or political conditions;

pricing and marketing of products;

unfavorable trade policies;

changes in foreign and domestic laws, regulations, or governmental requirements;

changes in treaty and trade relationships;

the imposition of government restrictions or emergency measures that differ among jurisdictions;

and changes in monetary and fiscal policies.

Additional risks include changes in economic or political conditions;

the pricing and marketing of our products;

local labor conditions and regulations;

reduced protection of intellectual property rights;

changes in the regulatory or legal environment;

changes in regulatory or legal environments;

lack of well-developed legal systems;

restrictions and foreign exchange rate fluctuations;

and burdensome taxes and tariffs and other trade regulations or barriers.

Other exposures and uncertainties that exist include changing social conditions and attitudes, terrorism, and political hostilities and war.

In addition, difficulties of global operations include staffing and managing our various locations, including logistical and communication challenges.

The likelihood of such occurrences and their overall effect on us vary greatly from country to country, are not under our control, and are not predictable.

foreign currency restrictions and exchange rate fluctuations;

and burdensome taxes, tariffs, and other trade regulations or barriers.

Other exposures and uncertainties include changing social conditions and attitudes, terrorism, political instability, and armed conflicts.

We also face operational challenges in managing our global footprint, including staffing and managing multiple locations and addressing logistical and communication challenges.

The likelihood and impact of these risks vary by country, are outside of our control, and are difficult to predict.

Our business involves the use of hazardous materials, and we must comply with environmental, health, and safety laws and regulations, which can be expensive and restrict how we do business.

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If we are subject to any liability as a result of activities involving hazardous materials, our business, financial condition, and results of operations may be adversely affected, and our reputation may be harmed.

Additionally, future laws regarding hazardous materials may increase our costs with respect to their use and disposal.

Our future results may be affected by compliance risks related to United States and other countries’ anti-bribery and anti-corruption laws, trade controls, economic sanctions, and similar laws and regulations.

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Additionally, there can be no assurance that our policies and procedures will effectively prevent us from violating these regulations in every transaction in which we may engage or provide a defense to any alleged violation.

In particular, we may be held liable for the actions that our partners take inside or outside of the United

States even though we are not aware of such actions or our partners may not be subject to these laws.

In particular, we may be held liable for the actions that our partners take inside or outside of the United States even though we are not aware of such actions or our partners may not be subject to these laws.

Such a violation, even if our policies prohibit it, could have an adverse effect on our reputation, business, financial condition, and results of operations.

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Environmental, social, and governance (“ESG”) regulations and disclosures may impact our reputation, expose us to additional costs, or have other impacts which could adversely affect our business, financial condition, or results of operations.

There has been an increased focus from regulators, investors, employees, consumers, and other stakeholders relating to ESG practices.

We periodically communicate our ESG initiatives, which include prioritizing people, community, environmental, and product stewardship.

Certain market participants, including major institutional investors, proxy advisory firms, and capital providers, use benchmarks and scores to assess companies’ ESG profiles in making investment or revoting decisions or recommending voting positions.

There is continued focus and evolving expectations from regulators, investors, employees, customers, and other stakeholders relating to ESG matters, with regulatory approaches differing across jurisdictions.

We periodically

communicate our ESG initiatives, which include prioritizing people, community, environmental, and product stewardship.

We have limited and in some instances no visibility or control over these scores or their underlying methodologies.

Unfavorable ESG ratings could lead to increased negative investor sentiment towards us or our industry, which could negatively impact our share price as well as our access to and cost of capital.

To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees or customers, which may adversely impact our operations.

Simultaneously, there are efforts by some stakeholders to reduce companies’ efforts on certain ESG-related matters.

Both advocates of and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.

In addition, this emphasis on ESG matters has resulted and may result in the adoption of new laws and regulations, including new reporting requirements.

Our failure to respond to any such regulatory requirements or to advance our initiatives could adversely impact our reputation, as well as the demand for our products.

In addition, achieving these initiatives may result in increased costs, which could have a material adverse impact on our business, financial condition, or results of operations.

The ESG regulatory environment is evolving and, in some cases, becoming fragmented, with certain jurisdictions increasing disclosure and compliance requirements while others are reducing or revising such requirements.

This may result in increased costs, complexity, and challenges in complying with applicable requirements.

At the same time, there are efforts by some stakeholders to increase companies’ focus on ESG matters, while others are seeking to reduce or limit such efforts.

Both advocates of and opponents to certain ESG matters are increasingly engaging in a range of activities, including media campaigns, shareholder proposals, and litigation, to advance their perspectives.

In addition, we may be subject to increased regulatory scrutiny, investigations, litigation, or enforcement actions relating to our ESG disclosures, initiatives, or public statements, including potential claims regarding the accuracy or completeness of such disclosures or allegations of “greenwashing.” Compliance with evolving ESG-related requirements may require significant data collection, validation, and reporting efforts, including the potential need for enhanced internal controls or third-party assurance, which could increase our costs and complexity.

To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete effectively to attract and retain employees or customers, which may adversely impact our operations.

In addition, achieving our ESG initiatives may result in increased costs, which could have a material adverse impact on our business, financial condition, or results of operations.

Global tax law changes may adversely affect our business, financial condition, and results of operations.

We are subject to the income tax laws of the United States and its various state and local governments, as well as several foreign tax jurisdictions.

Our future income taxes could be materially adversely affected by changes in the amount or mix of earnings amongst countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax rates or the interpretation of tax rules and regulations in jurisdictions in which we do business,

changes in tax laws, or the outcome of income tax audits and any related litigation.

Our future income taxes could be materially adversely affected by changes in the amount or mix of earnings among countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax rates or the interpretation of tax rules and regulations in jurisdictions in which we do business, changes in tax laws, or the outcome of income tax audits and any related litigation.

The United States Tax Cuts and Jobs Act of 2017 is one such example of legislation that has impacted our effective tax rate.

Further changes in the tax laws of the United States and foreign jurisdictions could arise, including additional tax reform in the United States and the base erosion and profit shifting project undertaken by the Organization for Economic Co-operation and Development (“OECD”).

Both the United States tax reform and the OECD proposed recommendations which, in some cases, would make substantial changes to numerous long-standing tax positions and principles.

These contemplated changes could increase tax uncertainty and may adversely affect our business, financial condition, and results of operations.

Further changes in tax laws in the United States and foreign jurisdictions could arise, including additional tax reform in the United States and evolving international tax frameworks, such as those developed by the Organization for Economic Co-operation and Development (“OECD”).

These developments include the implementation of global minimum tax regimes and related guidance across multiple jurisdictions, which may differ in scope, timing, and application.

These changes may result in increased complexity, compliance burdens, and uncertainty with respect to our global tax position.

tax reform and international tax developments may materially affect long-standing tax positions and principles, including the taxation of foreign earnings and cross-border transactions.

These changes could increase tax uncertainty and may adversely affect our business, financial condition, and results of operations.

Ineffective internal control over financial reporting could result in errors in our financial statements, reduce investor confidence, and adversely impact our stock price.

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Our failure to maintain effective internal control over financial reporting could result in violations of applicable securities laws and stock exchange listing requirements;

subject us to litigation and investigations;

subject us to litigation, investigations, or administrative proceedings;

negatively affect investor confidence in our financial statements;

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We may also encounter challenges in our efforts to satisfy customers that may require all of the components of products purchased to be certified as conflict free.

If we are not able to meet customer requirements, customers may choose to disqualify us as a supplier.

If we are not able to meet customer requirements, customers may choose to disqualify us as a supplier, which could negatively affect our business, financial condition, and results of operations.

Risks Related to an Investment in Our Common Stock

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• the prohibition of cumulative voting in the election of directors;

• under the DGCL, stockholders who do not approve a change in control cannot demand the fair value of their shares or any premium for such shares;

• in general, Section 203 of the DGCL (the “Delaware Business Combination Statute”) prohibits us from engaging in a Business Combination (as defined below) with and Interested Stockholder (as defined below) for a period of three years after the date of the transaction in which the person became an Interested Stockholder unless:

• under the DGCL, stockholders who do not approve a change in control generally do not have the right, solely by reason of their dissent, to receive a judicially determined control premium or other premium for their shares, although appraisal rights may be available in certain transactions;

• in general, Section 203 of the DGCL prohibits us from engaging in a Business Combination (as defined below) with an Interested Stockholder (as defined below) for a period of three years after the date of the transaction in which the person became an Interested Stockholder unless:

(i) our Board approved either the Business Combination or the transaction in which the stockholder became an Interested Stockholder prior to the date the interested stockholder became an Interested Stockholder;

(ii) the Interested Stockholder acquires at least 85 percent of our common stock (excluding shares owned by our directors, officers, and certain participants in employee stock purchase plans) in the transaction in which it became an Interested Stockholder;

(ii) the Interested Stockholder acquires at least 85 percent of our common stock (excluding shares owned by our directors, officers, and certain participants in

employee stock purchase plans) in the transaction in which it became an Interested Stockholder;

or (iii) the business combination is approved by our Board and the affirmative vote of at least two-thirds of the votes entitled to be cast by disinterested stockholders at an annual or special meeting of our stockholders.

The DGCL permits a corporation to opt out of, or choose not to be governed by, the Delaware Business Combination Statute by expressly stating so in its original certificate of incorporation (or subsequent amendment to its certificate of incorporation or bylaws approved by its stockholders).

The Certificate of Incorporation does not contain a provision expressly opting out of the application of the Delaware Business Combination Statute.

Therefore, the Company is subject to the Delaware Business Combination Statute.

A “Business Combination” is defined under the Delaware Business Combination Statute broadly to include mergers, consolidations, asset sales, and other transactions resulting in a financial benefit to an interested stockholder.

The Delaware Business Combination Statute generally defines an “Interested Stockholder” as an entity or person beneficially owning 15 percent or more of the outstanding voting stock of a corporation and any entity or person affiliated with or controlling or controlled by such entity or person.

The DGCL permits a corporation to opt out of, or choose not to be governed by, Section 203 of the DGCL by expressly stating so in its original certificate of incorporation (or subsequent amendment to its certificate of incorporation or bylaws approved by its stockholders).

The Certificate of Incorporation does not contain a provision expressly opting out of the application of Section 203 of the DGCL.

Therefore, the Company is subject to Section 203 of the DGCL .

A “Business Combination” is defined under the DGCL broadly to include mergers, consolidations, asset sales, and other transactions resulting in a financial benefit to an interested stockholder.

Section 203 of the DGCL generally defines an “Interested Stockholder” as an entity or person beneficially owning 15 percent or more of the outstanding voting stock of a corporation and any entity or person affiliated with or controlling or controlled by such entity or person.

The above protections may deny our stockholders a premium on a sale of their common stock, which, in turn, may have a material adverse effect on the market price of our common stock.

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In the past, companies that have experienced significant changes in the market price of their stock have been subject to securities litigation claims.

be the target of this type of litigation in the future.

We may be the target of this type of litigation in the future.

Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns even if we prevail in the litigation, which could harm our business.

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Moreover, our stock price may be based on expectations, estimates, and forecasts of our future performance that may be unrealistic or that may not be met.

Further, our stock price may fluctuate based on reporting by the financial media, including television, radio, press reports, and blogs.

Further, our stock price may fluctuate based on reporting by the financial media, including television, radio, press reports, podcasts, and blogs.

Activist stockholder activity has impacted, and may continue to impact, our governance, operations, strategic directions, and the value of our common stock.

We have experienced activist stockholder activity that has led to changes in our Board composition and governance practices, and the possibility of future activism could have a material adverse effect on our business, financial condition, or results of operations.

On July 23, 2022, we entered into a cooperation agreement with Prairieland Holdco, LLC (together with certain of its affiliates, “Prairieland”) (the “Prairieland Cooperation Agreement”).

Pursuant to the Prairieland Cooperation Agreement, two Prairieland-recommended candidates were appointed to our Board of Directors.

Prairieland has agreed to customary standstill and voting provisions through our 2025 annual meeting of stockholders.

On March 3, 2025, we entered into a cooperation agreement with Alta Fox Capital Management, LLC (together with certain of its affiliates, “Alta Fox”) (the “Alta Fox Cooperation Agreement”), our largest stockholder.

Pursuant to the Cooperation Agreement, an Alta Fox-recommended candidate was appointed to our Board of Directors and our Transformation Committee, and we committed to various governance and investor engagement initiatives, including hosting an Investor Day and seeking Alta Fox’s input on our search for a new Chief Financial Officer (“CFO”).

Pursuant to the Cooperation Agreement, an Alta Fox-recommended candidate was appointed to our Board of Directors and the Transformation Committee of the Board, and we committed to various governance and investor engagement initiatives, including hosting an Investor Day and seeking Alta Fox’s input on our search for a new Chief Financial Officer (“CFO”).

Alta Fox has agreed to customary standstill and voting provisions through our 2027 annual meeting of stockholders and has withdrawn its litigation against the Company with prejudice.

Any future activist campaigns—whether by Prairieland, Alta Fox, or other stockholders—could be costly and time-consuming, disrupt our operations, divert the attention of management and our Board, interfere with our ability to execute our strategic plans, and create uncertainty among employees, customers, and investors.

In response to stockholder engagement, including activist activity, we are pursuing various strategic and operational initiatives.

These initiatives may not be successfully implemented, may disrupt our operations, or may not achieve the expected benefits within the anticipated timeframes, if at all.

Any future activist campaigns, whether by current stockholders or new investors, could be costly and time-consuming, disrupt our operations, divert the attention of management and our Board, interfere with our ability to execute our strategic plans, and create uncertainty among employees, customers, and investors.

These impacts, alone or in combination, could materially adversely affect the market price and volatility of our securities.

Our executive officers, directors and principal stockholders have the ability to significantly influence all matters submitted to our stockholders for approval.

Our founder and former Chairman of the Board and his family may have the ability to significantly influence all matters submitted to our stockholders for approval.

Daktronics co-founder Dr.

Aelred Kurtenbach served as our Chairman of the Board until September 3, 2014.

Aelred Kurtenbach’s family members currently serve as executive officers of the Company.

Kurtenbach, serves on our Board of Directors and was Chief Executive Officer (“CEO”) of Daktronics until March 5, 2025, and two other of Dr.

Aelred Kurtenbach’s children serve as our Vice President of Human Resources and as our Vice President of Manufacturing.

Together, these individuals, in the aggregate, beneficially owned 9.0 percent of the shares of our outstanding common stock as of June 9, 2025, assuming the exercise by them of all of their options that were currently exercisable or that vest within 60 days of June 9, 2025.

Our other executive officers and directors, in the aggregate, beneficially owned an additional 1.5 percent of our outstanding common stock as of June 9, 2025, assuming the exercise by them of all of their options currently exercisable or that vest within 60 days of June 9, 2025.

Although this does not represent a majority of our outstanding common stock, if these stockholders were to choose to act together, they would be able to significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs.

For example, these persons, if they choose to act together, could significantly influence the election of directors and the approval of any merger, consolidation, sale of all or substantially all of our assets or other business combination or reorganization requiring stockholder approval.

Aelred Kurtenbach’s family members currently serve or have recently served as executive officers of the Company.

Kurtenbach, served on our Board of Directors until February 1, 2026 and served as Chief Executive Officer (“CEO”) of Daktronics until March 5, 2025.

Aelred Kurtenbach’s children currently serves as our Vice President of Manufacturing, and another of his children previously served as Vice President of Human Resources and Secretary through January 31, 2026.

Together, these individuals, in the aggregate, beneficially own shares of our outstanding common stock.

This concentration of voting power could delay or prevent an acquisition of us on terms that other stockholders may desire.

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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