What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-03-27 compared with 2024-03-25 · 42 added, 29 removed, 327 unchanged (18% of the section changed)

6 unchanged sentences

Historically, we have earned, and believe that in the future we will continue to earn, a substantial portion of our revenue from a relatively small number of customers.

In 2023, our top three customers accounted for 22%, 12% and 10% of our net revenues, respectively.

In 2024, our top three customers accounted for 15%, 12% and 5% of our revenue, respectively.

If we were to either lose one of our major customers or have a major customer significantly reduce its volume of business with us, our business, results of operations and financial condition would be harmed unless we were able to replace such demand with other orders promptly.

We expect to continue to be dependent on our major customers, the number and identity of which may change from period to period.

Because our customers generally do not provide us with firm, long-term volume purchase commitments, our customers, including our largest customers upon whom we may become dependent, can reduce or terminate altogether their business with us at any time, whether because they choose an alternate supplier, see reduced demand for their products, or otherwise.

We rely on third parties for the materials that we use to manufacture our products, and supply shortages and price increases could adversely affect our revenues, operating results and customer relationships.

Because they generally do not provide us with firm, long-term volume purchase commitments, our customers, including our largest customers upon whom we are or may become dependent, can reduce or terminate altogether their business with us at any time, whether because they choose an alternate supplier, see reduced demand for their products, or otherwise.

We rely on third parties for the materials that we use to manufacture our products, and supply shortages and price increases could adversely affect our revenue, operating results and customer relationships.

We rely on third-party suppliers for the raw material components of our products.

4 unchanged sentences

Furthermore, changes in U.S.

trade policies, including new restrictions, tariffs or other changes, especially as regards China, could lead to additional costs, delays in shipments, embargos and other uncertainties that could negatively impact our relationships with our international suppliers and materially adversely affect our business.

trade policies, such as those being implemented by the new U.S.

administration.

including new restrictions, tariffs or other changes, especially as regards China, and reciprocal tariffs imposed by other countries, could lead to additional costs, delays in shipments, embargos and other uncertainties that could negatively impact our relationships with our international suppliers and materially adversely affect our business.

Depending on the continued extent and duration of these constraints and disruptions, our supply chain, results of operations (including sales) or future business could be materially and adversely impacted.

4 unchanged sentences

Any disruption in these supplier relationships could prevent us from maintaining an adequate supply of materials and could adversely affect our results of operation and financial position.

Disruptions in our manufacturing facilities or arrangements could cause our revenues and operating results to decline.

Disruptions in our manufacturing facilities or arrangements could cause our revenue and operating results to decline.

We manufacture our products in Shenzhen, China;

Newark, California;

and Irvine, Scotland.

Fremont, California;

Irvine, Scotland;

and Barnsley, England.

These facilities are vulnerable to damage from earthquakes, floods, fires, power loss and similar events.

They could also be subject to break-ins, sabotage and intentional acts of vandalism.

Our insurance may not cover such events and, if the event is covered, our insurance may not be sufficient to compensate us

in full for any losses that may occur.

Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problem at any of our manufacturing facilities could result in delayed shipment of products, missed delivery deadlines and harm to our reputation, which could cause our revenues and operating results to decline.

Our insurance may not cover such events and, if the event is covered, our insurance may not be sufficient to compensate us in full for any losses that may occur.

Performance, reliability or quality problems with our products could cause our customers to reduce or cancel orders, which would harm our operating results.

6 unchanged sentences

Armed conflicts in the Middle East and between Russia and Ukraine, tensions between the U.S.

and countries such as Iran and North Korea and between other countries such as China and Taiwan, and disruptions to traffic through key shipping routes such as the Suez Canal, also could adversely impact our sales, shipping costs, and results of operations.

and countries such as Iran and North Korea and between other countries such as China and Taiwan, and disruptions to traffic through key shipping routes such as the Panama Canal and the Suez Canal, also could adversely impact our sales, shipping costs, and results of operations.

Such events may also result in delays in our or our vendors’ receipt of inventory and the delivery of merchandise between our customers, our stores and/or our partners and our distribution center and our vendors’ fulfillment centers.

44 unchanged sentences

BKFG), and Mr.

Hoffman serves as Chief Financial Officer of BKF Capital Group, Inc., and until August 2023, of Qualstar Corporation.

Hoffman serves as Acting Chief Financial Officer of Qualstar Corporation and as Chief Financial Officer of BKF Capital Group, Inc.

As a result, each of Messrs.

27 unchanged sentences

As a result, any compromise to the security of our systems could have a material adverse effect on our business, reputation, financial condition, and operating results.

Ransomware attacks, in particular, have become more frequent and severe, potentially resulting in the encryption or theft of critical data, operational disruptions, and financial losses.

A successful ransomware attack on our systems or those of our vendors could lead to prolonged business interruptions, regulatory fines, reputational damage, and substantial remediation costs.

While we employ security measures designed to detect, prevent, and respond to such threats, no system is entirely immune from cyberattacks.

Risks Related to Our Industry

11 unchanged sentences

Our competitors include companies with similar products or technologies, companies that sell complementary products to our target markets, and our customers themselves, who could choose to manufacture in-house products that they currently buy from us.

Many of our competitors have substantially greater financial resources than we do.

Our competitors and potential competitors may have established business relationships that afford them a competitive advantage or may create technologies that are superior to ours or that set a new industry standard that will define the successful product for that market.

26 unchanged sentences

● lockup releases, and sales of large blocks of our common stock;

● the impact of outbreaks, and threat or perceived threat of outbreaks, of epidemics and pandemics, including, without limitation, the coronavirus outbreak, on our sourcing and manufacturing operations as well as on consumer spending;

● the impact of outbreaks, and threat or perceived threat of outbreaks, of epidemics and pandemics, including, without limitation, the coronavirus outbreak in 2020 and the current avian flu outbreak, on our sourcing and manufacturing operations as well as on consumer spending;

● departures of key employees;

8 unchanged sentences

We currently have one series of Preferred Stock outstanding, the Series A Convertible Preferred Stock.

Holders of our Series A Convertible Preferred Stock have a liquidation preference equal to the greater of $25.00 per share plus any accrued and unpaid

dividends, and such amount per share as would have been payable had all shares of Series A Convertible Preferred Stock been converted into our common stock in the event of our liquidation or winding up.

Holders of our Series A Convertible Preferred Stock have a liquidation preference equal to the greater of $25.00 per share plus any accrued and unpaid dividends, and such amount per share as would have been payable had all shares of Series A Convertible Preferred Stock been converted into our common stock in the event of our liquidation or winding up.

This means that those holders are entitled to receive the liquidation preference before any payment or other distribution of assets to our common stockholders, and the amount of any such payment or other distribution to our common stockholders will be reduced by that amount.

13 unchanged sentences

We do not have any control over these analysts.

If one or more of the analysts who cover us downgrades our shares or changes their opinion of our business prospects, our share price would likely decline.

If one or more of these analysts ceases coverage of our company or fails to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

If analysts downgrade our shares or change their opinion of our business prospects, our share price would likely decline.

If analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our product candidates on unfavorable terms to us.

9 unchanged sentences

In addition, Mr.

Bronson has the ability to control the management and affairs of our company as a

result of his position as our CEO and his ability to control the election of our directors.

Bronson has the ability to control the management and affairs of our company as a result of his position as our CEO and his ability to control the election of our directors.

As a board member and officer, Mr.

4 unchanged sentences

We do not intend to pay dividends on our common stock for the foreseeable future and, consequently, our common stockholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common stock.

We have never declared or paid cash dividends on our common stock, and we do not anticipate paying any such dividends on our common stock in the foreseeable future, if at all.

We have never declared or paid cash dividends on our common stock, and we do not anticipate paying any such dividends in the foreseeable future.

The declaration, amount and payment of any future dividends on shares of our common stock, if any, is subject to the designations, rights and preferences of the Series A Convertible Preferred Stock and will be at the sole discretion of our Board of Directors, which may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, the implications of the payment of dividends by us to our stockholders or by our subsidiaries to us, and any other factors that our Board of Directors may deem relevant.

23 unchanged sentences

government, including substantial monetary penalties, denial of export privileges, and debarment from government contracts.

Increasing global tariffs create risks to our global business and that of our customers.

Recent changes in U.S.

trade policies, including the imposition of new tariffs on imported goods, present significant risks to our operations and potentially those of our customers.

These tariffs may lead to increased costs for raw materials and components, supply chain disruptions, and heightened market volatility.

Additionally, retaliatory tariffs from trade partners may hinder our ability and that of our customers to access key markets, further impacting our financial performance.

We continue to monitor these developments closely and are evaluating strategies to mitigate potential adverse effects on our business.

If we fail to comply with anti-bribery laws, including the U.S.

10 unchanged sentences

General Risks

The global COVID-19 pandemic had a significant and adverse effect on, and may continue to adversely affect, our business, financial position, results of operations, and cash flows.

Our business, financial position, results of operations, and cash flows may be adversely affected by the global COVID-19 pandemic, in particular if there is a resurgence in infections, or any broad outbreak of an avian flu or other epidemic in the human population.

The persistent challenges stemming from the COVID-19 pandemic continue to pose significant risks to our business operations, financial performance, and outlook.

26 unchanged sentences

We may continue to experience the effects of the pandemic even now that its severity has waned, and our business, results of operations and financial condition could continue to be affected.

In particular, if COVID-19 re-emerges with serious and widespread impact on public health, particularly in the United States, Singapore, China, and the United Kingdom where our operations are most concentrated, and results in a prolonged period of travel, commercial, social and other similar restrictions, we could experience, among other things:

In particular, if COVID-19 re-emerges with serious and widespread impact on public health, particularly in the United States, China,or the United Kingdom where our operations are most concentrated, and results in a prolonged period of travel, commercial, social and other similar restrictions, we could experience, among other things:

● Adverse impacts on our operations and financial results caused by government and regulatory measures to contain or mitigate the spread of the virus, temporary closures of our facilities or the facilities of our customers or suppliers, which could impact our ability to timely meet our customers’ orders or negatively impact our supply chain;

11 unchanged sentences

The impact of COVID-19 can also exacerbate other risks discussed in this Risk Factors section and throughout this report.

Investors should carefully evaluate the potential implications of ongoing COVID-19 challenges on our financial performance, operational resilience, and competitive position when making investment decisions.

Investors should carefully evaluate the potential implications of ongoing COVID-19 challenges and other potential pandemics on our financial performance, operational resilience, and competitive position when making investment decisions.

The extent and duration of these challenges remain uncertain, and our ability to effectively manage them will be critical to our long-term success.

6 unchanged sentences

Our revenue from international sales represents a substantial portion of our overall sales, and this trend will continue for the foreseeable future.

The majority of our international manufacturing is currently performed in China and Scotland.

The majority of our international manufacturing is currently performed in China and the United Kingdom.

Our international operations involve a number of risks, including with respect to:

● import-export license agreements, tariffs, taxes and other trade barriers;

● import-export license agreements, tariffs (which may be increasing globally), taxes and other trade barriers;

● staffing and managing foreign operations;

9 unchanged sentences

Any of the above factors could adversely affect our operating results.

Political Instability and Uncertainty

Political instability and uncertainty could adversely affect our operating results.

The political landscape in the United States is characterized by increasing polarization, uncertainty, and volatility.

1 unchanged sentence

The unpredictability of the political environment poses challenges in anticipating and mitigating risks effectively.

The current U.S.

political climate, marked by rapid policy changes and regulatory shifts under the Trump-Vance administration, presents significant uncertainties for our global operations.

In particular, escalating geopolitical tensions involving key global markets could impact our supply chain stability and market access.

These factors collectively may adversely affect our business operations, financial condition, and future prospects.

Uncertainty surrounding government policies and regulations, including those related to taxation, trade, healthcare, environmental protection, and labor practices, may impact our costs, operations, and market competitiveness.

3 unchanged sentences

Acquisitions involve multiple risks and uncertainties.

We recently completed the acquisitions of SPEC, KWJ and Calman, and we expect to make further acquisitions in the future.

Within the last 18 months, we completed the acquisitions of SPEC, KWJ, Calman, and Conductive Transfers, and we expect to make further acquisitions in the future.

Acquisitions involve numerous inherent challenges, such as properly evaluating acquisition opportunities, properly evaluating risks and other diligence matters, ensuring adequate capital availability and balancing other resource constraints.

There are risks and uncertainties related to acquisitions, including:

difficulties integrating acquired technology, operations, personnel and financial and

other systems;

difficulties integrating acquired technology, operations, personnel and financial and other systems;

unrealized sales expectations from the acquired business;

28 unchanged sentences

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