What changed in this filing

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Item 1A. Risk Factors

2025-08-29 compared with 2024-08-30 · 123 added, 79 removed, 135 unchanged (60% of the section changed)

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These are the risks and uncertainties we believe are most important for you to consider, however, there may be other risks that are currently deemed immaterial or not currently known to us that could materially impact the business.

If any of the following risks, or those unidentified develop into actual events, our business may not grow, our stock price may suffer, and we may be unable to stay in business.

If any of the following risks, or those unidentified, develop into actual events, the Company’s business, reputation, results of operations, financial condition and stock price can be materially and adversely affected.

The risks discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.

Risks Related to Our Operations and Financial Results

Macroeconomic and Political Risks

The Company's operations and results are influenced by both global and regional economic environments, and less than favorable economic conditions may have a material adverse impact on the Company's business, operating results, and financial position.

The Company sales outside the U.S.

represent nearly 30% of total net sales for the fiscal year ended Jne 30, 2025.

Moreover, the Company relies almost exclusively on contract manufacturing facilities based in the People’s Republic of China to produce its goods, underscoring the critical importance of this region to its overall operations.

As a result, the Company’s business, financial condition, and results of operations may be adversely affected by unfavorable global, national, and regional economic conditions and political developments.

Inflationary pressures, sustained higher interest rates, and increased energy and labor costs have reduced consumer discretionary spending and may continue to impact demand for the Company’s products.

In addition, supply chain disruptions, fluctuations in foreign currency exchange rates, and the imposition of new tariffs or trade restrictions could increase our costs and reduce profitability.

The Company’s operations may be affected by political developments, international trade disputes and restrictions, natural disasters, public health concerns, and other disruptions to business activities.

Political developments, international trade or other disputes, natural disasters, public health concerns, and various business disruptions may have a significant adverse impact on the Company, as well as its customers, employees, contract manufacturers, logistics providers, and distributors.

Uncertainty associated with the current U.S.

presidential administration and changes in government policies that have and will continue to occur may operations, cost structure, and competitive environment.

For example, the recent changes to corporate tax laws and rates, environmental regulations, international trade agreements and newly enacted tariffs could increase operating costs or reduce access to key markets.

Furthermore, political polarization within the United States and the possibility of policy reversals or delayed legislative action may contribute to economic volatility and reduce business and consumer confidence.

Primarily all of the Company’s contract manufacturing facilities are located in China and we do not currently have arrangements with contract manufacturers in other countries that may be acceptable substitutes.

Significant increases in wages or wage taxes paid by contract manufacturing facilities may increase the cost of goods manufactured in China which could have a material adverse effect on the Company’s profit margins and profitability.

Additionally, restrictions on international trade, the imposition of tariffs, sanctions and other controls on imports or exports of goods, technology or data, can materially adversely impact the Company’s business and supply chain.

Further restrictive measures, which could be announced with little or no warning, could limit the Company’s ability to source materials and product from China at acceptable prices or at all and necessitate a change to the Company’s supply chain which would be disruptive, time-consuming and expensive.

We cannot predict what actions may ultimately be taken with respect to tariffs, export controls, countermeasures, or other trade measures between the U.S.

and China or other countries and what products may be subject to such actions.

To the extent such actions inhibit our transactions with contract manufacturing facilities and suppliers in China, our business may be materially adversely affected.

See further discussion below under “ The Company is dependent on the proper functioning of our contract manufacturers, our supply chain, and our distribution networks.

Any disruptions could adversely affect our business, financial condition or results of operations ” and “ A shift in U.S.

and China trade relations, policies and imposed tariffs could adversely affect the Company’s business, financial condition and results of operations.”

Geopolitical tensions, armed conflicts and acts of terrorism could adversely affect our business, financial condition, and results of operations.

Ongoing and escalating geopolitical conflicts, including the Russia - Ukraine war, instability in the Middle East, and heightened tensions between the United States and China, create significant uncertainty in the global economic and regulatory environment.

These conflicts may lead to supply chain disruptions, restrictions on the movement of goods, changes in trade policies, and imposition of new tariffs, sanctions, or export controls.

For example, the conflict in Russia and Ukraine and the related sanctions and trade restrictions on Russia have caused and are expected to continue to cause, global political, economic and social instability, volatility in

commodity prices and energy prices, increased cyberattacks and disruptions to the global economy .

In accordance with Executive Order 14071 signed on April 6, 2022 soon after the war began, the Company suspended sales to Russia.

Also, as a result of the humanitarian crisis in Ukraine created by the war and the population seeking refuge in other countries, sales to Ukraine have been impacted.

There were no sales to Russia during the fiscal years ended June 30, 2025 and 2024, however, sales to Ukraine resumed in the fiscal year ended June 30, 2024 with more expected in the future.

Prior to the imposition of the sanctions against Russia, fiscal year 2022 sales to Russia approximated 2% of the Company’s total sales.

Recent years have seen escalating conflicts in the Middle East, involving attacks by militant groups, responses from national defense forces, and retaliatory actions across borders.

Such military engagements often bring international involvement, with foreign powers providing support, participating in defense operations, and sometimes engaging in evacuations.

These developments underscore the increasing complexity and risk within the global geopolitical landscape.

The conflicts have exacerbated regional instability, impacted global shipping lanes and increased energy and raw material costs.

Tensions between the U.S.

and China could result in additional tariffs beyond what were recently imposed, retaliatory trade measures, or regulatory restrictions that increase the cost of manufacturing and sourcing materials.

These risks may limit the Company’s ability to procure critical products and components, extend lead times, increase transportation and input costs, and adversely impact competitiveness in key markets.

In addition, the uncertain and rapidly evolving nature of these geopolitical developments makes it difficult to predict the full extent of their impact on the Company’s operations, financial condition, and results of operations.

Our business, financial condition and results of operations may be adversely impacted by the effects of inflation.

Persistent inflationary pressures and elevated interest rates have the potential to adversely affect the Company’s business, financial condition and results of operations, particularly if we are unable to achieve commensurate increases in the prices we charge our customers.

The Company continues to experience inflationary cost pressures in commodities, packaging materials, wages and higher energy and transportation costs, thus potentially impacting the ability to meet customer demand.

The Company attempts to mitigate th ese increases through pricing strategies, as well as working with a dedicated freight forwarding partner to minimize freight rate increases.

Inflation may impact customer demand for the Company’s products resulting from a slowdown in consumer spending as disposable income decreases due to rising interest rates, the price of essential items, availability of credit and dwindling savings.

Other risk factors further exacerbated by inflation include supply chain disruptions, increased oil and energy costs, risks of international operations and the recruitment and retention of talent.

Risks Related to our International Operations

We may be subject to risks related to doing business in, and having counterparties based in, foreign countries.

We engage in operations, and enter into agreements with counterparties located outside the U.S., which exposes us to political, governmental, and economic instability and foreign currency exchange rate fluctuations.

Any disruption caused by these factors could harm our business, results of operations, financial condition, liquidity, and prospects.

Risks associated with potential operations, commitments, and investments outside of the U.S.

include but are not limited to risks of:

 global and local economic, social and political conditions and uncertainty;

 currency exchange restrictions and currency fluctuations;

 export and import duties;

 additional tariffs imposed on exports from the U.S.

to other countries, potentially impacting pricing to customers in those countries;

 war, such as the invasion of Ukraine by Russia, military conflicts in the Middle East or terrorist attack;

 local outbreak of disease or pandemic;

 renegotiation or nullification of existing contracts or international trade arrangements;

 labor market conditions and workers’ rights affecting our manufacturing operations or those of our customers;

 macro-economic conditions impacting key markets and sources of supply;

 changing laws and policies affecting trade, taxation, financial regulation, immigration, and investment;

 compliance with laws and regulations that differ among jurisdictions, including those covering taxes, intellectual property ownership and infringement, imports and exports, anti-corruption, and anti-bribery, antitrust and competition, data privacy, and environment, health, and safety;

 general hazards associated with the assertion of sovereignty over areas in which operations are conducted, transactions occur, or counterparties are located.

A shift in U.S.

and China trade relations, policies and imposed tariffs could adversely affect the Company’s business, financial condition and results of operations.

The Company’s operations and financial results are subject to risks arising from evolving U.S.-China trade relations.

In April 2025, the U.S.

government imposed tariffs of up to 145% on certain imports from China, significantly increasing the Company’s costs of goods sourced from China.

On May 12, 2025, the U.S.

and China reached a temporary 90 - day trade truce, reducing these tariffs to approximately 30%, including a 10% baseline reciprocal tariff and a 20% surcharge on specific categories.

The truce, effective May 14 through August 12, 2025, resulted in a suspension of the elevated China - specific tariff rates, with China reciprocally reducing tariffs on U.S.

On August 12, 2025, the US and China extended a tariff truce for another 90 days, pushing negotiations into the fall.

The long - term trajectory of trade policy remains uncertain.

Failure to extend the agreement could result in the reinstatement of triple - digit percentage tariffs on imports from China, materially increasing the Company’s cost of goods sold and potentially disrupting supply chains.

In addition, legal challenges to the tariffs are ongoing in U.S.

courts, creating further uncertainty about the scope and enforceability of these measures.

Continued volatility in trade relations between the U.S.

and China, including the potential for reinstated tariffs or new trade restrictions, could adversely impact the Company’s sourcing, pricing, and profitability.

The Company is actively monitoring these developments and assessing mitigation strategies, including alternative sourcing arrangements, however, no assurance can be given that such strategies will fully offset the impact of adverse trade policy changes.

Fluctuations in currency exchange rates could affect the Company’s financial results and operations, including with respect to pricing of products and overall demand for the Company’s products.

The Company receives a material portion of its sales and profits from business in Europe.

To the extent that the value of the U.S.

dollar increases relative to currencies in those jurisdictions, it increases the cost of the Company’s products in those jurisdictions, which could create negative pressure on the foreign demand for the Company’s products.

The Company is paid by its international customers in U.S.

Volatility in the exchange rates between the foreign currencies and the U.S.

dollar could result in increased prices, a decrease in the overall demand for the Company’s products or lead customers to purchase lower-priced, lower profit products and, as such, could have an adverse effect on the Company’s business, financial condition and results of operations.

Operational and Financial Risks

The Company is dependent on the proper functioning of our contract manufacturers, our supply chain, and our distribution networks.

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A reduction or interruption in supply, including interruptions due to possible future pandemic- related restrictions, geopolitical unrest, labor shortages or strikes, or a failure to procure adequate components, may lead to delays in manufacturing or increases in costs.

Many of the Company’s products are sourced from contract manufacturing facilities in the People’s Republic of China and Taiwan.

Over 90% of the Company’s products are sourced from contract manufacturing facilities in the People’s Republic of China and Taiwan.

There has been increasing geopolitical tension between China and Taiwan that may affect future shipments from Taiwan-based suppliers.

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Recovery of a single facility through replacement of a supplier in the event of a disaster or suspension of supply could take an estimated six to twelve months.

We have experienced and may again in the future experience supplier price increases, supply chain and shipping interruptions and constraints, volatility in demand for our products caused by sudden and significant changes in production levels by our suppliers, and disruptions in our manufacturing and supply arrangements caused by the loss or disruption of essential manufacturing and supply elements such as raw materials or other product components, transportation, work force, or force majeure events.

We have experienced, and may again in the future experience supplier price increases, supply chain and shipping interruptions and constraints, volatility in demand for our products caused by sudden and significant changes in production levels by our suppliers, and disruptions in our manufacturing and supply arrangements caused by the loss or disruption of essential manufacturing and supply

elements such as raw materials or other product components, transportation, work force, or force majeure events.

Our inability to mitigate any of these disruptions may lead to a material adverse impact on our business, financial condition and results of operations.

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The Company is dependent upon its ability to attract and retain a base of customers to sell the Company’s line of products.

The Company has broad

distribution across many channels including specialty stores, mass merchants, electronics stores and computer retailers.

The Company has broad distribution across many channels including specialty stores, mass merchants, electronics stores and computer retailers.

The Company may not be able to maintain customers or model selections and therefore may experience a reduction in its sales revenue until a model is restored to the mix or a lost customer is replaced by a new customer.

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We face competition from consumer electronics brands that have historically dominated the stereo headphone market, in addition to sport brands, lifestyle companies and consumer electronics giants that also source or produce headphone products.

These competitors may have significant competitive advantages, including greater financial, engineering, distribution and marketing resources, longer operating histories, better brand recognition among certain groups of consumers, and greater economies of scale.

These competitors may have significant competitive advantages, including greater financial, engineering, distribution and marketing resources, longer operating histories, better brand

recognition among certain groups of consumers, and greater economies of scale.

In addition, these competitors often have long-term relationships with many larger retailers that are potentially more important to those retailers.

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Component defects could make the Company’s products unsafe and create a risk of property damage and personal injury.

There can be no assurance the Company will be able to detect all issues and defects in the products it offers.

There can be no assurance that the Company will be able to detect all issues and defects in the products it offers.

Failure to do so can result in widespread technical and performance issues affecting the Company’s products.

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While we devote resources to security measures to protect our systems and data, these measures cannot provide absolute security.

The investor must also recognize the risk that these types of attacks might have on the entire supply and distribution chain for the Company’s product line.

In a world that runs on the internet, the Company can only be as strong as its weakest link, whether as a financial service provider, third party distributor, reseller, transportation service provider, contract manufacturer, customer or consumer.

These types of attacks can also have an impact on the entire supply and distribution chain for the Company’s product line.

Given connectivity through the internet, the Company can only be as strong as the weakest link, whether that is a financial service provider, third party distributor, reseller, transportation service provider, contract manufacturer, customer or consumer.

Changes in tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and profitability.

We are subject to income taxes in the United States.

Our effective income tax rate could be adversely affected in the future by several factors, including changes in the valuation of deferred tax assets and liabilities and changes in tax laws.

We regularly assess all of these matters to determine the adequacy of our tax provision.

If our tax strategies are ineffective or we are not in compliance with domestic and international tax laws, our financial position, operating results, and cash flows could be adversely affected.

Our business, financial condition and results of operations may be adversely impacted by the effects of inflation.

Inflation has the potential to adversely affect our business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices we charge our customers.

The Company continues to experience inflationary cost pressures in our commodities, packaging materials, wages and higher energy and transportation costs, thus potentially impacting our ability to meet customer demand.

We attempt to mitigate th ese increases through pricing strategies, as well as working with a dedicated freight forwarding partner to minimize freight rate increases.

Inflation may impact customer demand for our products resulting from a slowdown in consumer spending as disposable income decreases due to rising interest rates, the price of essential items, availability of credit and dwindling savings.

Other risk factors further exacerbated by inflation include supply chain disruptions, increased oil and energy costs, risks of international operations and the recruitment and retention of talent.

Risks Related to our International Operations

Economic regulation, trade restrictions, and increasing manufacturing costs in China could adversely impact our business and results of operations.

The Company uses contract manufacturing facilities in the People’s Republic of China.

Additionally, government trade policies, including the imposition of tariffs, export restrictions, sanctions or other retaliatory measures, as described above under “ The Company is dependent on the proper functioning of our contract manufacturers, our supply chain, and our distribution networks.

Any disruptions could adversely affect our business, financial condition or results of operations.

,” could limit our ability to source materials and products from China at acceptable prices or at all.

We do not currently have arrangements with contract manufacturers in other countries that may be acceptable substitutes.

We cannot predict what actions may ultimately be taken with respect to tariffs, export controls, countermeasures, or other trade measures between the U.S.

and China or other countries and what products may be subject to such actions.

To the extent such actions inhibit our transactions with contract manufacturing facilities and suppliers in China, our business may be materially adversely affected.

Geopolitical conflicts including those between Russia and Ukraine, those occurring in the Middle East and other similar conflicts could adversely affect our business, financial condition, and results of operations.

In February 2022, Russian military forces invaded Ukraine, resulting in an ongoing military conflict between the two countries.

The length, impact and outcome of the ongoing conflict is highly unpredictable and the conflict has caused, and has expected to continue to cause, global political, economic and social instability, volatility in commodity prices and energy prices, increased cyberattacks and disruptions to the global economy, international trade and global supply chain.

In response to the invasion, the United States, United Kingdom, and European Union, along with others, imposed significant sanctions and export controls against Russia, Russian banks and certain Russian individuals and may implement additional sanctions or take further punitive actions in the future.

In accordance with Executive Order 14071 signed on April 6, 2022, the Company suspended sales to Russia at that time.

Also, as a result of the humanitarian crisis in Ukraine created by the war and the population seeking refuge in other countries, sales to Ukraine were impacted.

There have been no sales to Russia during the fiscal years ended June 30, 2024 and 2023, however, sales to Ukraine resumed during the current fiscal year with more expected in the future.

Prior to the imposition of the sanctions against Russia, sales to Russia approximated 2% of the Company’s total sales.

On October 7, 2023, Hamas launched attacks on civilian and military targets in Southern and Central Israel, to which the Israel Defense Forces responded.

In addition, Hezbollah has launched attacks on Northern Israel, to which Israel also responded.

The conflict has negatively impacted transportation in the region and the supply of energy.

The length and severity of the conflict is unknown at this time and any continuation of the clash may escalate in the future into a greater regional conflict.

We are unable to predict the impact the above conflicts will have on our business, financial condition and results of operations for the future.

We continue to actively monitor the conflicts and will report on any adverse effects as necessary as developments occur.

We may be subject to risks related to doing business in, and having counterparties based in, foreign countries.

We engage in operations, and enter into agreements with counterparties, located outside the U.S., which exposes us to political, governmental, and economic instability and foreign currency exchange rate fluctuations.

Any disruption caused by these factors could harm our business, results of operations, financial condition, liquidity, and prospects.

Risks associated with potential operations, commitments, and investments outside of the U.S.

include but are not limited to risks of:

 global and local economic, social and political conditions and uncertainty;

 currency exchange restrictions and currency fluctuations;

 export and import duties;

 war, such as the invasion of Ukraine by Russia, military conflicts in the Middle East or terrorist attack;

 local outbreak of disease or pandemic;

 renegotiation or nullification of existing contracts or international trade arrangements;

 labor market conditions and workers’ rights affecting our manufacturing operations or those of our customers;

 macro-economic conditions impacting key markets and sources of supply;

 changing laws and policies affecting trade, taxation, financial regulation, immigration, and investment;

 general hazards associated with the assertion of sovereignty over areas in which operations are conducted, transactions occur, or counterparties are located.

Fluctuations in currency exchange rates could affect the Company’s financial results and operations, including with respect to pricing of products and overall demand for the Company’s products.

The Company receives a material portion of its sales and profits from business in Europe.

To the extent that the value of the U.S.

The Company is paid by its international customers in U.S.

Volatility in the exchange rates between the foreign currencies and the U.S.

The Company is subject to income taxes in the United States.

The Company’s effective income tax rate and profitability could be adversely affected in the future by several factors, including changes in tax laws, regulations, administrative guidance or interpretations at the federal, state, or international level and changes in the valuation of deferred tax assets and liabilities.

‎ On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (the “OBBB Act”), a sweeping tax and spending law that makes permanent many provisions of the 2017 Tax Cuts and Jobs Act (the “TCJA”), while introducing new tax policies and restructuring others.

While certain provisions may reduce the Company’s tax liability, such as modifications to corporate tax rates, deductions, credits, treatment of foreign income, and expensing rules , others may introduce new complexity and audit risk.

The Company will continue to monitor the potential impact of the OBBB Act.

Because tax laws are dynamic and often retroactive or uncertain in interpretation, projected tax liabilities may differ significantly from eventual obligations.

The net impact remains uncertain, and misapplication of the new rules could lead to materially adverse outcomes.

The Company regularly assesses all of these tax-related matters to determine the adequacy of its tax provision.

If current tax strategies are ineffective or not in compliance with domestic and international tax laws, the Company’s financial position, operating results, and cash flows could be adversely affected.

Risks Related to our Stock

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The market price of our stock is subject to price volatility.

Additionally, over the years, the Company, the technology industry, and the stock market as a whole have experienced extreme stock price and volume fluctuations that have affected stock prices in ways that may have been unrelated to companies’ operating performance.

Factors such as the depth and liquidity of the market for our common stock, investor perceptions of us and our business, actions by institutional shareholders, strategic actions by us, litigation, changes in accounting standards, policies, guidance, interpretations and principles, additions or departures of key personnel, a decline in demand for our products and our results of operations, financial performance and future prospects may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from realizing the liquidity of their shares.

During the fiscal year ended June 30, 2024, the sales price of our common stock fluctuated between a reported high sales price of $6.95 on May 14, 2024 and a reported low sales price of $2.27 on April 17, 2024.

Additionally, over the years, the Company, the technology industry, and the stock market as a whole have experienced dramatic and extreme stock price and volume fluctuations that have affected stock prices in ways that may have been driven primarily by social media hype rather than companies’ operating performance and prospects.

limit or prevent investors from realizing the liquidity of their shares.

During the fiscal year ended June 30, 2025, the sales price of our common stock fluctuated between a reported high sales price of $18.73 on July 3, 2024 and a reported low sales price of $4.00 on April 9, 2025.

The trading volume in shares of our common stock can also vary widely.

For example, during the most recent fiscal year, daily trading volume ranged from a low of 2,000 shares on April 30, 2024 to a high of 19,694,200 on May 14, 2024.

For example, during the most recent fiscal year, daily trading volume ranged from a low of 11,400 shares on May 1, 2025 to a high of 70,055,500 on July 3, 2024.

Our market capitalization, as implied by various trading prices, can reflect valuations that diverge significantly from those seen prior to volatility and, to the extent these valuations reflect trading dynamics unrelated to our financial performance or prospects, purchasers of our common stock could incur substantial losses if there are declines in market prices driven by a return to earlier valuations.

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Stockholders that purchase shares of our common stock during a short squeeze may lose a significant portion of their investment.

The Koss family, including certain members of our management, owns a significant percentage of our stock and, as a result, the trading price for our shares may be depressed and they can take actions that may be adverse to the interests of our stockholders.

The Koss family, including certain members of our management, owns a significant percentage of our stock and, as a result, the trading price for our shares may be depressed and it can take actions that may be adverse to the interests of our stockholders.

Michael Koss, our President and Chief Executive Officer, beneficially owned 3,858,410 shares of our common stock as of August 1, 2025, representing 40.8% of shares outstanding on such date, including shares held by a voting trust over which Mr.

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Sales of a substantial number of such shares by these stockholders, or the perception that such sales will occur, may cause the market price of our common stock to decline.

Other than restrictions on trading that arise under securities laws (or pursuant to our securities trading policy that is intended to facilitate compliance with securities laws), including the prohibition on trading in securities by or on behalf of a person who is aware of nonpublic material information, we have no restrictions on the right of our employees, directors and officers, and their affiliates, to sell their unrestricted shares of common stock.

Other than restrictions on trading that arise under securities laws (or pursuant to our Insider Trading and Tipping Policy that is intended to facilitate compliance with securities laws), including the prohibition on trading in securities by or on behalf of a person who is aware of nonpublic material information, we have no restrictions on the right of our employees, directors and officers, and their affiliates, to sell their unrestricted shares of common stock.

UNRESO LVED STAFF COMMENTS

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The Company has programs in place intended to address and mitigate the cybersecurity risks that could adversely impact customers and/or reputation and lead to financial losses from remediation actions, loss of business, production downtimes and operational delays.

These programs include regular monitoring of outside threats, continuous updating of software to mitigate risk, education of employees to the risks of external threats, a simplification of infrastructure to minimize servers and migration of business-critical systems, including the Company’s ERP system, to Tier-1 cloud service providers.

Annual vulnerability assessments and penetration testing, as well as periodic web application scanning, is performed by third party service providers as directed by the Company’s Managed Service Provider (“MSP”).

These programs include regular monitoring of outside threats, continuous updating of software to mitigate risk, implementation of a formal policy related to employees that access corporate systems from personal devices, a simplification of infrastructure to minimize servers and migration of business-critical systems, including the Company’s ERP system, to Tier-1 cloud service providers.

Enhancements have also been made to endpoint protection and remote access protocols, including enhanced encryption, two-factor authentication (2FA) and real-time threat monitoring.

Annual vulnerability assessments and penetration testing, as well as periodic web application and internal network scanning, are performed by third party service providers as directed by the Company’s Managed Service Provider (“MSP”).

The results of these tests are shared with the CFO by the MSP.

We have processes in place to evaluate the potential risks from cybersecurity threats associated with our use of third-party service providers that have access to our data, including a review process for such providers’ cybersecurity practices, risk assessments, contractual requirement and system monitoring.

The Company also recently partnered with a breach protection platform to provide security and phishing training to its employees.

The Company has not been impacted by any previous cybersecurity incidents that would materially affect business operations or financial conditions.

The Company also partners with a breach protection platform to provide ongoing, self-guided cybersecurity training to its employees to reduce risk from phishing, social engineering and password-related attacks.

The Company has not been impacted by any previous cybersecurity incidents that would materially affect business operations, customer relationships or financial conditions.

Cybersecurity remains a critical component of corporate governance at the Company.

The Company’s MSP is responsible for identifying and assessing risks on an ongoing basis to ensure that the Company’s policies and procedures are functioning as designed to protect the Company’s information systems from potential cybersecurity threats.

Management is provided regular updates on the Company’s cybersecurity programs and material cybersecurity risk and mitigation strategies, along with any necessary enhancements to those programs.

Management is provided regular updates on the Company’s cybersecurity programs, training metrics, system health status and material cybersecurity risk and mitigation strategies, along with any necessary enhancements to those programs.

Cybersecurity policies and processes are reviewed annually with the Board of Directors, which serves in an oversight role as a whole.

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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