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Item 1. Business

2026-03-19 compared with 2025-03-28 · 184 added, 198 removed, 100 unchanged (79% of the section changed)

Business Overview

We build and deploy intelligent multi-sensing platforms incorporating edge and cloud software solutions that leverage artificial intelligence (“AI”).

We are a provider of sensing systems built around high-resolution thermal imagers, visible and acoustic imagers, as well as vibration and laser spectroscopy sensors, that perceive and measure heat, sound, vibration, and gas in industrial assets and the surrounding environment, helping companies gain insight to protect and manage their most important assets and infrastructure.

We believe our platform is high performing and attractively priced across each of our primary target markets:

distribution and logistics;

manufacturing;

and oil and gas.

We also offer a wide range of form factors for our sensor devices, including, among other form factors, small to large handheld designs with built-in displays and controls, fixed-mounted single- and multi-sensor camera sensor systems, with or without displays and controls, and mobile multi-sensor payload and gimbal systems for unmanned aerial vehicles (“UAVs”).

We believe that our digital multi-sensor software technology platform positions us to become a leader in thermal and related sensing as the introduction of continuous streaming thermal data alongside other adjacent sensor data, coupled with automated insights, replaces intermittent manual thermal and physical inspections.

Additionally, our cloud-connected thermal, visible, acoustic, vibration, and spectroscopy big data capture enables artificial intelligence and machine learning (“AI/ML”) opportunities to elevate critical asset management to a new level and provide differentiated insight.

In partnering with several blue-chip multinational customers throughout the development process, we have illustrated several high-value use cases for our MSAI Edge and MSAI Connect software across our three target markets, as described below.

We build and deploy integrated condition monitoring and early threat detection solutions that connect multiple sensor types through a unified edge-to-cloud software architecture.

Our software platform integrates multiple sensing modalities such as thermal, visual and acoustic, among others.

Customers deploy the MSAI Connect platform to continuously monitor critical assets and identify early degradation patterns (such as elevated operating temperatures) across electrical, mechanical, and environmental systems.

This allows teams to intervene early and convert potential failures into planned maintenance before downtime, safety incidents, or operational disruption occur.

We are focused on growing our position as a Software as a Service (“SaaS”) leader in predictive maintenance.

As of December 31, 2025, we had approximately 730 active sensors connected to our software platform, MSAI Connect, as compared to approximately 460 as of December 31, 2024.

This represents a 59% increase year over year.

We anticipate significant opportunities to drive increased recurring revenues with our solutions.

We focus on commercial environments where operational continuity is vital and automation intensity is high, including distribution and parcel logistics networks, data centers, and select manufacturing and industrial facilities.

We believe our solutions offer a compelling combination of performance, scalability, and cost efficiency relative to traditional inspection and monitoring approaches.

Our digital, multi-sensor software platform is designed to support the transition from intermittent, manual asset inspections towards continuous intelligent condition monitoring.

By streaming and analyzing radiometric thermal data in combination with other deployed sensor inputs, our MSAI Connect software platform can surface early anomaly signals that may not be visible or detected during periodic inspections.

Our system architecture is intentionally modular and extensible, allowing for the integration of additional sensing modalities and analytics capabilities over time.

While our current commercial deployments are centered primarily on thermal-based monitoring enhanced by software-driven analytics and expert review, we believe the platform’s multi-sensor foundation positions us to expand into broader predictive and prescriptive use cases.

Through collaboration with several blue-chip multinational customers during development and deployment, we have validated high-value, mission-critical use cases across our target markets:

distribution and logistics, manufacturing and data centers.

These engagements have informed our product evolution and reinforced our belief that integrated, AI-enabled multi-sensor monitoring represents a structural shift in how industrial reliability and asset protection are managed.

Industry Background

A Brief History of Applied Infrared Technology

Thermal imaging and sensing technologies were first discovered and leveraged in the early part of the 19th century.

Originally used for radiation detection, the technology began being used in military applications for night vision, as well as in scientific and astronomical applications throughout the early portions of the 20th century.

In the late 20th century, infrared technology was incorporated into thermal cameras, used in manufacturing and other industrial settings to identify faulty equipment in need of maintenance, as well as other potential operational and safety issues by sensing “hotspots” or raised temperatures that often presage equipment failure.

As the technology grew in sophistication, and decreased dramatically in cost, the breadth of applications expanded.

In the past three decades, thermal sensing technology has been applied across numerous applications, such as production process monitoring, electrical equipment monitoring, industrial plant monitoring, early fire detection, pressure vessel monitoring, tank level monitoring, and liquid and gas leak detection.

Adjacent and Complementary Sensor Technologies to Infrared

In industrial applications, infrared imaging technology is used to measure temperature in a uniquely high-resolution and non-contact fashion in order to detect asset and process condition anomalies.

These anomalies can sometimes also be detected using sound, vibration, and visible image analysis.

As a result, enhancing infrared image sensing with acoustic and visible image sensing as well as vibration monitoring can further improve asset and process condition monitoring and resultant predictive maintenance efforts.

Applied Infrared Technology

As thermal imaging and sensing technology has grown in sophistication, and decreased dramatically in cost, it has been applied across numerous applications, such as production process monitoring, electrical equipment monitoring, industrial plant monitoring, early fire detection, pressure vessel monitoring, tank level monitoring, and liquid and gas leak detection.

Many industrial operators are moving from intermittent, manual inspections to continuous monitoring that can surface early warning signals sooner.

Our solution supports this shift by combining multi-sensor data with software insights and reliability expertise to detect anomalies early and guide response.

Continuous Monitoring and Data-Driven Insight

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Most of the focus in the industry, historically, has been on the development of the sensing technology hardware itself in an effort to enhance accuracy and reliability.

Having optimized the fixed-mount hardware and associated thermal, visible, acoustic, vibration, and spectroscopy devices, we have shifted our focus towards the acquisition, storage and analysis of data through our proprietary edge software, MSAI Edge, and our cloud-based software, MSAI Connect.

Having optimized fixed-mount hardware, we have shifted our focus towards the acquisition, storage and analysis of data through our proprietary software platform, MSAI Connect, available both as cloud-based subscription service and as an on-premises deployment (formally referred to as MSAI Edge).

Infrared Sensing Technology

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Thermal sensors provide several benefits over ubiquitous, visible, light-based sensing technologies, including the ability to measure temperature remotely and without touching the surface of the object, detect and image many types of otherwise invisible gases, observe in complete darkness, image through obscurants such as smoke and steam, detect and discriminate living beings from other sources of heat in an efficient and reliable way, and see over long distances with minimal atmospheric interference.

For these reasons, we feel that the potential of our core technology to grow in prevalence and importance is significant, particularly as the cost of the technology continues to decline, opening up large new end applications.

For these reasons, we feel that the potential of our core technology to grow in prevalence and importance is significant.

Acoustic Imaging Technology

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Multi-Sensor Technology

Our integrated solutions leverage data generated from an array of sensors and sensor modalities to protect our customers' most critical assets.

We combine condition monitoring data with proprietary edge and cloud software to generate actionable insights that, we believe, minimize unplanned downtime, reduce maintenance costs, prevent catastrophe, and extend asset life.

Sensor Devices

Our sensor devices cover a large range of the electromagnetic and mechanical spectrums, encompassing visible-light imagers, shortwave (“SWIR”), midwave (“MWIR”), and longwave infrared imagers (“LWIR”), ultraviolet (“UV”) imagers, acoustic imagers, and tunable diode laser emitter-detector pairs for laser absorption spectrometry (“TDLAS”).

While our sensor devices generally include an infrared imager as a core sensor technology, many of them are multi-sensor and include two or more of the aforementioned sensor devices.

We offer a wide range of form factors for our sensor devices, including small to large handheld designs with built-in displays and controls, fixed-mounted single- and multi-sensor camera systems with or without displays and controls, fixed-mounted pan-tilt-zoom single- and multi-sensor camera standalone systems, and mobile multi-sensor payload and gimbal systems for UAVs and unmanned ground vehicles (“UGVs”).

Sensor Software

We have developed a suite of edge and cloud software systems to acquire, store, analyze, action and archive sensor data.

Our edge software can operate independently or be combined with our cloud system MSAI Connect.

We believe that the combination of our edge and cloud software together creates a multitude of turn-key software solutions for our customers that solve industrial problems in ways previously unavailable.

Edge Software

MSAI Edge is an “on premises” software, capable of processing advanced thermal imaging, visible imaging, and acoustic imaging data streams as well as multiple established industrial communications protocols.

This setup enables continuous monitoring of critical equipment and processes, delivering real-time insights into their health and performance, and is readily integrated into existing operational and business intelligence systems.

MSAI Edge is sold as both a term-based software license, which generally provides access to the software for a period of 12 months, and as a perpetual license.

MSAI Edge is highly specialized because, in addition to performing standard, visible-light video processing, it also processes the raw radiometric data output from our infrared sensors, consisting of high-precision absolute temperature values for every pixel in the sensor array (ranging from 49 thousand to 1.31 million pixels, depending on the sensor).

Our software is able to display a video image of the sensor output using customizable color palettes to represent temperature values and features automatic or adjustable minimum and maximum temperature values for this video image conversion.

Our edge software is also able to perform analytics on the sensor output, with powerful data processing, capture, charting, and the creation of configurable temperature alerts and alarms for both the overall sensor array as well as for customizable regions of the array, or Regions of Interest (“ROI”).

Additionally, powerful features like comparing temperatures between ROIs and measuring ROI temperature changes over time enable our software to provide extended insight into industrial equipment and processes.

Built-in report generation features enable easy documentation of findings for customers still performing manual inspections.

Our edge software also features multiple notification methods for communicating a discovered temperature anomaly, including automatic email and text message generation and automated work-order generation via customer Enterprise Asset Management systems.

In addition, our software features flexible integration with customer systems using various industrial protocols to enable automatic, anomaly-driven remediation, whether dynamically adjusting operating parameters, shutting down production lines at risk of imminent failure, or triggering fire suppression systems.

Versions of our edge software are also capable of capturing, storing, and analyzing sensor data from UV imagers, acoustic imagers, and TDLAS devices.

Also, our edge software designed for UAV and UGV usage enables partial to complete integration with the unmanned system’s control architecture to not only capture sensor data but also control gimbal devices and communicate with the unmanned system’s flight or ground controls.

Historically, a variation of our edge software was designed to measure human skin temperature in order to identify individuals who had an elevated body temperature.

This software was primarily sold during the COVID-19 pandemic and featured AI capabilities and included computer vision modules used to automatically detect and locate a temperature reference source, automatically detect one or more human faces in the scene, and determine if a hat, glasses, or face mask was being worn so that appropriate actions could be taken.

This edge software can generate notifications via multiple communication channels in response to elevated body temperature detection.

It also can identify employees via badge-worn QR codes, validate employee status, perform temperature checks, and grant facility access only upon proper compliance, thus functioning as an access-control system.

Our edge software can be run on many types of edge devices, generally any PC, workstation, or server.

Customer implementation needs determine the type and location of the edge device relative to the sensor device.

Cloud Software

MSAI Connect is our innovative, cloud-based software, that utilizes AI and enables predictive asset reliability and process control in industrial environments.

This technology harnesses the power of continuous data inputs from advanced thermal imaging, acoustic imaging, visible imaging, and vibration sensing hardware solutions, which are strategically placed in customer's facilities to continuously monitor the health and performance of a customer's critical equipment and processes.

MSAI Connect can process and analyze vast amounts of data in real-time, providing actionable insights and predictive analytics.

This enables businesses to proactively identify potential issues, prevent costly downtime, and optimize their operations for maximum efficiency and reliability.

MSAI Connect is a subscription service and is generally contracted for a period of 12 months.

Our MSAI Connect technology has been developed and

continues to be refined primarily for use in three target markets that we believe are at the forefront of the transition to continuous monitoring solutions:

distribution and logistics;

manufacturing;

and oil and gas.

We launched our MSAI Connect cloud-software product suite in the second quarter of 2023.

MSAI Connect, which currently runs on the Amazon Web Services platform, communicates bilaterally with one or more devices running our edge software as well as with other cloud-hosted industrial data repositories via any suitable internet connection.

MSAI Connect thereby receives and stores sensor data from our directly connected sensor devices, including thermal, visible, and acoustic imagers, indirectly connected sensors communicating with our edge software via standard industrial communications protocols, and other cloud-connected industrial sensor data repositories.

In addition to receiving and storing this data, our cloud software provides an intuitive and insight-rich dashboard that enables users to simultaneously view live thermal and visible video streams from multiple sensor devices as well as related data values and alerts for temperature, sound, and vibration.

For customers with multiple facilities distributed geographically, this central monitoring capability provides a new and powerful tool for thermal, acoustic, and vibration anomaly detection and management.

Our cloud software is distinguished by its capability to not only transmit thermal imaging metadata and RGB video from the edge to the cloud, but also transmit radiometric image data.

Modern industrial environments are increasingly automated, interconnected, and operationally complex.

As asset density rises and tolerance for disruption declines, single-sensor systems and periodic manual inspections may be insufficient to detect emerging risks across interconnected equipment and infrastructure.

We believe these environments require integrated, multi-sensor monitoring approaches capable of continuously analyzing diverse data streams to identify early indicators of performance degradation or failure.

Our integrated solutions leverage data generated from multiple sensor types and sensing modalities to protect our customers' most critical assets.

We combine condition monitoring data with proprietary edge and cloud-based software to transform raw sensor inputs into actionable operational insights.

These insights are designed to enable earlier intervention and more informed decision making which we believe can minimize unplanned downtime, reduce maintenance costs, mitigate the risk of catastrophic failures and extend asset life.

MSAI Connect, our condition-based monitoring and early threat detection software platform, is available in both cloud-hosted and on-premises configurations.

The platform utilizes continuous data inputs from strategically deployed sensor devices to monitor the health and performance of critical assets.

MSAI Connect processes multi-sensor data in real time to surface early anomaly signals that may indicate developing mechanical or electrical degradation.

MSAI Connect, when deployed and connected to the cloud, is a

subscription service and is contracted for a period of 12 to 48 months.

MSAI Connect, when deployed on-premises, is sold as both a term-based software license, which generally provides access to the software for a period of 12 months, and as a perpetual license.

MSAI Connect, when deployed on the cloud, runs on the Amazon Web Services platform and communicates bilaterally with one or more devices as well as with other cloud-hosted industrial data repositories via any suitable internet connection.

MSAI Connect thereby receives and stores sensor data from our directly connected sensor devices and indirectly connected sensors communicating with our edge software via standard industrial communications protocols or other cloud-connected industrial sensor data repositories.

In addition to receiving and storing this data, MSAI Connect provides a centralized monitoring dashboard that enables users to view live thermal and visual data streams, temperature trends, and anomaly alerts across multiple facilities.

For customers operating geographically distributed sites, this capability supports standardized monitoring and earlier risk identification across their operational footprint.

The MSAI Connect platform is distinguished by its capability to transmit radiometric image data, not only thermal imaging metadata and RGB video from the edge to the cloud.

This radiometric capability enables the full analytical power of infrared cameras to be harnessed in the cloud as well as at the edge.

In particular, this cloud radiometry enables vastly broader AI/ML capabilities, as models can be trained on radiometric data from large infrared datasets gathered from every camera connected at the edge.

We expect this “big data” capability to be a significant advantage as we continue to develop transformative computer vision models for all of our customers’ use cases.

Our cloud software can also receive acoustic imager video and metadata streams from our edge software, enabling remote monitoring and analysis of fixed-mount acoustic imagers.

Additionally, our cloud software can receive vibration monitor data from third-party wireless vibration sensor product solutions.

We believe incorporating acoustic, vibration, thermal, and visible imager data into one ‘single-pane-of-glass’ monitoring solution provides enhanced value for our customers.

Our cloud software features comprehensive user access management and security protocols to enable flexible and secure provisioning of sensor data access and visibility for multiple users across a company’s platform.

Our cloud software also features customizable Enterprise Asset Management (“EAM”) integrations to automatically generate work orders in the customer’s EAM system when an alert is triggered.

A variation of our cloud software is designed to provide centralized monitoring of employee health and safety across facilities by communicating with edge devices running our elevated body temperature monitoring software, leveraging the same core infrared cloud architecture that underpins our industrial monitoring software.

This software provides robust analytics, and AI capabilities, including computer vision modules to automatically track the location of employees who display elevated body temperature.

This data enables vastly broader artificial intelligence and machine learning (“AI/ML”) capabilities, as models can be trained on radiometric data from large infrared datasets gathered from every camera connected at the edge.

We expect this “big data” capability to be a significant advantage as we continue to develop transformative AI models.

Our sensor hardware covers a broad range of the electromagnetic and mechanical spectrums, encompassing visible-light imagers, shortwave, midwave, and longwave infrared imagers, ultraviolet imagers, acoustic imagers, and tunable diode laser emitter-detector pairs for laser absorption spectrometry.

While our sensor devices generally include an infrared imager as a core sensor technology, many of them are multi-sensor and include two or more of the aforementioned sensor devices.

Sensor hardware is paired with our software to create customized solutions for predictive maintenance and is also sold on a standalone basis via our online store, www.infraredcameras.com .

We offer installation services that cover on-site hardware mounting, sensor commissioning, and connectivity into the MSAI Connect platform.

MSAI Solution Architects configure camera views and assist with establishing initial alerting thresholds and defining regions of interest so customers can quickly realize the full benefits of the MSAI Connect platform.

We also perform calibrations and maintenance on hardware.

We previously performed training through August 2025 and inspections through September 2025.

Roadmap and Development

Our hardware roadmap has expanded significantly over the past several years as the Company has transitioned from a transactional device and edge software focus to a comprehensive subscription service approach incorporating devices, edge software, and cloud software in combination to offer turn-key technology solutions to numerous industrial challenges.

Our hardware development is therefore focused on improving and expanding our sensor portfolio to include sensors with superior performance, price, or sensing capabilities.

We also look to improve our sensor device portfolio to incorporate form factors with improved performance, including handheld, fixed, and mobile device forms.

Our software roadmap is focused on improving our edge and cloud software to expand our sensor portfolio, to improve and automate insights from sensor data, to expand sensor insight notifications and response, and to optimize overall architecture improving performance and cost.

Our software development is thus concentrated on the integration of new sensor devices and modalities, both via edge and cloud data streams, the incorporation of new sensor data into sophisticated analytical and AI models to improve industrial anomaly detection, the expansion of anomaly notification methods and channels, the addition of new response protocols via on-premise integrations, communications with industrial operations platforms and continued system architecture refinement.

Over the past several years, we have been transitioning from a transactional sensor device provider into a subscription-based, integrated condition monitoring platform company.

Our roadmap reflects this transformation.

Rather than developing standalone hardware products, we now design and deploy coordinated device, edge, data hub, and cloud software capabilities that operate as a unified system to address complex industrial reliability challenges.

Hardware Development

Our hardware roadmap is focused on expanding and enhancing our multi-sensor portfolio to support broader industrial use cases and higher-performance environments.

Development efforts prioritize:

• sensors with improved sensitivity, resolution, and durability;

• cost-efficient designs that support scalable deployment models;

• expanded sensing modalities to enable multi-dimensional asset intelligence.

This approach supports our transition toward integrated subscription-based deployments in which hardware operates as a data acquisition layer within a broader software-driven intelligence platform.

Platform and Software Development

Our platform and software roadmap is centered on transforming sensor data into automated, scalable insights.

Development priorities include:

• Integration of new sensor modalities into a unified data architecture

• Incorporation of radiometric and multi-sensor data into advanced analytical and AI-driven anomaly detection models

• Expansion of automated notification channels and workflow integrations

• Continuous refinement of system architecture to improve performance, reliability, and cost efficiency

We are focused on evolving from alert-based monitoring toward increasingly predictive and prescriptive capabilities that embed operational expertise directly into the platform.

Product Enablement and Governance

To support this platform evolution, we have established a dedicated product enablement function comprised of sales, marketing and engineering representatives.

This group provides structured portfolio governance, disciplined prioritization, and cross-functional alignment across product management, engineering, reliability expertise, and commercial teams.

Product enablement is designed to ensure that roadmap investments are aligned with validated customer use cases, scalable subscription economics, and measurable operational outcomes.

We believe this disciplined, platform-oriented development approach positions us to expand across automation-intensive industries and to support the broader industry shift from intermittent inspection models to continuous, AI-enabled condition intelligence .

Market Opportunity

Overall Market Opportunity

We believe our thermal and multi-sensing technology has potential application across many industries.

As the benefits of data-driven infrared multi-sensor technology become more widely accepted, we believe there are significant market opportunities available for our product offerings.

We define our total addressable market (“TAM”) as applications in the distribution and logistics;

manufacturing;

and oil and gas markets in the United States, where we actively engage and maintain customer relationships.

We estimate the TAM in these target markets based on a combination of the total number of estimated potential customers and facilities in each market, our expectations regarding the scope of potential uses of thermal and multi-sensing solutions in those markets, and our estimates of average selling prices in those markets and potential opportunity for software solutions to increase the utility of thermal imaging and multi-sensing solutions.

Our TAM calculations are based upon third-party industry and governmental sources of the total number of facilities in the U.S.

of a sufficient size and scale that could utilize thermal and multi-sensing solutions to achieve an expected positive return on investment.

These facilities include, but are not limited to, distribution / fulfillment centers, large commercial and freight airports, industrial mills, oil and gas producing wellheads, and chemical manufacturing plants.

Based on our own commercial experience, and conservative estimates of the number of critical assets, physical lines of sight, and expected reterun on investments of individual use cases per facility, we estimate how many of our multi-sensor sensing systems could be deployed at these facility.

We estimate the TAM in 2024 in our target markets was approximately $10.7 billion, consisting of approximately $7.1 billion in hardware sales and $3.6 billion in software and service sales.

Our current market share in each of our three target markets represents less than 0.1% penetration of the estimated TAM.

Our TAM calculation was based on a thorough bottoms-up analysis of the potential number of externally verified facilities and assets in the United States across our three target markets that could be penetrated by MSAI Edge and MSAI Connect sensor and software solutions.

These calculations were made with several assumptions and limitations in mind, applied consistently across the calculations in all three of the target markets.

Specifically, these assumptions and limitations included only considering:

● facilities located within the United States;

● the current number of externally verifiable facilities, with no assumptions related to the growth or reduction in the number of such facilities in future periods;

● facilities of the type in which we have current use cases with paying customers or have developed products that we are piloting with customers.

Although the numbers of facilities used in our calculation were specific to each of the target markets (e.g., the number of distribution centers for warehouse and logistics or the number of steel mills for manufacturing), the rules for inclusion and exclusion were common to all three target markets.

While we have a long history of selling, implementing and supporting device-only thermal systems into each of the three target markets, there are some risks inherent to selling integrated device and software multi-sensing solutions into each of these target markets.

Please see Part I.

“ Risk Factors — Risks Related to Our Business and Industry ” and “ Risk Factors — Risks Related to Our Products ” for a more detailed discussion relating to the risks that apply to each of our three target markets, particularly as they relate to the adoption of our hardware and software offerings in each of the three target markets.

Our early threat detection and condition-based monitoring solution, centered on the MSAI Connect platform and supported by integrated hardware has application across a range of automation-intensive and infrastructure-driven industries.

As organizations increasingly adopt continuous, data-driven maintenance and reliability strategies to reduce unplanned downtime and safety risk, we believe meaningful market opportunities exist for our platform in the sectors we target.

During the year, we realigned our market strategy to focus on the industries and countries where we believe the largest opportunity exists for our current platform offerings.

These industries include distribution and logistics, manufacturing, and data centers in the United States, Canada, European Union member states and the United Kingdom.

This realignment resulted in the deprioritization of certain industries, products, and services.

Regarding industries, we have deprioritized oil and gas and metals and mining, where the applications generally require specialized sensors and customized solutions to handle the often-harsh environmental conditions in which monitoring is being performed.

Regarding products, we made the strategic decision to cease marketing, development, and sale of drone related product offerings given the high degree of customization required and limited overlap with our software platform.

Regarding services, we discontinued offering training and inspection related services which were ancillary to our core offerings.

We believe this realignment will allow us to focus on our core competencies and offerings and position us for success in 2026.

We estimate the total addressable market (“TAM”) in these target markets based on a combination of the total number of estimated potential customers and facilities in each market, our expectations regarding the scope of potential uses of our predictive maintenance and reliability platform in those markets, and our estimates of average selling prices in those markets and potential opportunity for our platform to increase the utility of maintenance and reliability programs.

Our TAM calculations are based on third-party industry and governmental sources estimating the total number of facilities in the United States, Canada, European Union member states, and the United Kingdom.

These facilities include distribution and fulfillment centers, commercial airports, data centers, food and beverage manufacturing plants, automobile manufacturing facilities, and EV charging infrastructure.

These calculations were made with several assumptions and limitations, applied consistently across all three target markets.

Specifically, these assumptions and limitations include:

● We evaluated data regarding facilities located within the United States, Canada, European Union member states, and the United Kingdom.

Our assumption regarding target countries may deviate from the location of future installations and the Company may operate in other countries not considered in this analysis in the near or long term.

● Our calculations did not assume any market opportunities for secondary industries where we may have active deployments, use cases or pilots.

Our target industries may change and industries may be reprioritized based on the development of our solutions and commercial traction achieved.

● Data sourced and utilized in the analysis was as of a point in time, which may differ between sources and data points.

We did not make any assumptions about future potential growth or reduction of facilities from the point in time data obtained.

Based on our commercial experience and estimates of the number of critical assets, sensor coverage, and expected return on investment of individual use cases per facility, we estimated how many of our multi-sensor systems could be deployed across these facilities.

We estimate that the TAM in our target markets was approximately $9.0 billion in 2025, consisting of $6.6 billion in hardware sales and $2.4 billion in software and service sales annually.

Our market share in each of our three target markets represented less than 0.1% penetration of the estimated TAM in 2025.

There are risks inherent to selling into each of these target markets.

Please see Part I, Item 1A, “Risk Factors — Risks Related to Our Business and Industry” and “Risk Factors — Risks Related to Our Products” for a more detailed discussion of the risks applicable to the adoption of our hardware and software products in each of the three target markets.

Distribution and Logistics Market Opportunity

We believe that the distribution and logistics TAM in 2024 was approximately $2.3 billion.

This distribution and logistics TAM includes conveyor system anomaly detection, hotspot detection, process automation, predictive maintenance, and failure avoidance, among other applications, with demand expected to be driven by both financial incentives related to process improvements and increased regulation pertaining to facility safety.

We believe the distribution and logistics TAM in 2025 was approximately $3.9 billion.

This TAM includes conveyor system anomaly detection, hotspot detection, process automation, predictive maintenance, and failure avoidance, among other applications.

Demand is expected to be driven by financial incentives related to process improvements and increased regulations pertaining to facility safety.

Manufacturing Market Opportunity

We believe that the manufacturing TAM in 2024 was approximately $3.2 billion.

This manufacturing market TAM includes process monitoring and control, predictive maintenance, electrical panel monitoring (sub grid scale), production motor drives, early fire detection, and electrified transport battery monitoring, among other applications.

We expect demand in the manufacturing market to be driven by ongoing commercial adoption of data-driven predictive maintenance and manufacturing processes (e.g., reduced scrap and waste).

Oil and Gas Market Opportunity

We believe that the oil and gas TAM in 2024 was approximately $5.2 billion.

This oil and gas TAM includes gas and liquid leak detection, tank level and flare monitoring, pipeline leak detection, and gas processing safety monitoring, as well as more general manufacturing reliability and predictive maintenance, among other applications.

We expect demand to be stimulated by both increased regulations and the general demand for safe and cost-effective thermal sensing and monitoring solutions.

In particular, the Environmental Protection Agency (the “EPA”) has promulgated regulations (commonly referred to as “Quad-O/Oa”), which have established emission standards and compliance schedules for the control of volatile organic compounds and greenhouse gases, specifically including methane.

These federal regulations are supplemented by regulations promulgated by state-level agencies, such as the Texas Commission on Environmental Quality.

We believe that our fixed-mount, hand-held and drone-mounted systems are sufficient to promote compliance with the Quad O/Oa and state-level standards for methane-leak detection and have sold devices for this specific use case for many years.

In addition, there are multiple established competing technologies for methane-leak detection, specifically including hand-held and drone-based thermal camera devices and hand-held methane “sniffers.” Although we believe that our fixed-mount continuous monitoring solutions are both more efficient and more cost-effective than competing technologies, adoption of the MSAI Connect fixed-mount solutions will require brand awareness, and adoption in the face of established practice.

In addition, there are multiple emerging technologies (e.g., satellite based thermal sensing) in the methane-detection space that may create additional competition for our commercial activity in the oil and gas market.

We primarily target three markets globally:

distribution and logistics;

and manufacturing.

For the year ended December 31, 2024, one customer in the distribution and logistics market accounted for 25% of total net revenue, and two customers in the manufacturing market accounted for 11% and 11% of total net revenue, respectively.

We believe the manufacturing TAM in 2025 was approximately $2.7 billion.

This includes process monitoring and control, predictive maintenance, electrical panel monitoring (sub-grid scale), production motor drives, early fire detection, and electrified transport battery monitoring, among other applications.

We expect demand to be driven by continued commercial adoption of data-driven predictive maintenance and manufacturing processes.

Data Center Market Opportunity

We believe the data center TAM in 2025 was approximately $2.4 billion.

This market includes monitoring and management solutions for backup power generators, liquid cooling systems, battery backup (UPS) infrastructure, and critical power distribution, among other applications.

These systems support the reliability and efficiency of increasingly complex data center environments.

Demand is expected to be driven by the rapid growth of hyperscale and AI-driven computing workloads, increased power density per rack, and the need for real-time monitoring and predictive maintenance to ensure uptime, optimize energy usage, and reduce the risk of failures in critical infrastructure.

We primarily target customers in the distribution and logistics, manufacturing and data center markets.

For the year ended December 31, 2025, one customer in the distribution and logistics market accounted for 36% of total net revenue.

No other customer accounted for more than 10% of total net revenue.

Distribution and Logistics

Our customers in the distribution and logistics market are generally engaged in the maintenance and upkeep of facilities and their critical material-handling equipment assets.

Our customers in the distribution and logistics market are generally engaged in the maintenance and upkeep of e-commerce and retail distribution centers, couriers and express parcel hubs and their material-handling equipment assets.

This includes conveyor systems, transportation and machinery, and electrical infrastructure.

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Our target users in the manufacturing market traditionally include mechanical engineers and facilities and maintenance professionals.

As our software solutions continue to evolve, we are increasingly targeting process design, safety, and operational leaders whose priorities involve process waste reduction, enhanced safety protocols, and improved consistency and quality in manufacturing outputs.

Our customers in the oil and gas market leverage our technologies for a wide variety of uses, including facilities maintenance, asset performance assessment, tank level monitoring, leak detection, pipeline monitoring, and processing safety.

This market includes commercial businesses as well as some governmental agencies.

Traditionally, our solutions have been sold to maintenance professionals, safety professionals, and engineers.

We believe that our data-driven software and solutions will expand users to include operational and manufacturing leaders, as well as other organizational leaders involved in enterprise-level sales.

Our customers in the data center market include operators responsible for maintaining uptime across power distribution and cooling infrastructure.

Target users include facilities managers, reliability engineering teams, and infrastructure operations leaders responsible for electrical panels, switchgear, uninterrupted power supply systems, cooling equipment and pumps, and backup power assets.

In these environments, continuous monitoring supports earlier identification of developing electrical or thermal anomalies or liquid leaks that could otherwise escalate into outages or safety incidents.

Our Competitive Strengths

We believe the following strengths will allow us to maintain and extend our position as a provider of multi-modal sensing and software solutions.

We believe the following strengths will allow us to scale our position as a condition monitoring and early threat detection platform.

Proprietary SaaS Technology

We have developed what we believe to be a proprietary cloud-based platform, MSAI Connect, used by our customers to analyze key data points and patterns acquired by our thermal and other sensors.

We have developed what we believe to be a proprietary platform, MSAI Connect, designed to unify data from multiple sensor types into a single platform to support earlier anomaly detection and more consistent response workflows.

This proprietary platform allows users to identify failure points and patterns to inform safety protocols, enhance predictive maintenance to minimize unplanned downtime, and improve manufacturing processes.

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Our sensor platform utilizes precise device sensor technology coupled with software to drive low-cost customization.

With this combination, we expect to develop new solutions for industry-specific applications, expanding our product offering without requiring significant manufacturing or inventory changes.

With this combination, we expect to develop new innovative solutions for industry-specific applications, expanding our product offering without requiring significant manufacturing or inventory changes.

Our system architecture is intentionally modular and extensible, allowing for the integration of sensing modalities developed internally and by third parties.

Diversified Applications

We believe that the diversity of applications in which our technology can be applied in our three target markets gives us several advantages.

We believe our early entrance into these markets with our MSAI Connect SaaS solution will enable us to gain expertise, informing our product development decisions so that we may more effectively customize our solutions for customers’ needs.

We believe that the diversity of applications in which our technology can be applied in our target markets gives us several advantages.

We believe our early entrance into these markets with our MSAI Connect platform will enable us to gain expertise, informing our product development decisions so that we may more effectively customize our solutions for customers’ needs.

We also believe that our early entrance into our target markets affords us an advantageous opportunity to establish strong relationships globally with key customers in each market.

Our Growth Strategies

Our goal is to increase our sales by expanding the market for multi-sensor condition-based monitoring across multiple industry sectors.

Our goal is to increase our sales by expanding the market for multi-sensor condition-based monitoring across automation-intensive environments.

In order to achieve that goal, key elements of our growth strategy include:

Increase Investment in SaaS Solution

Our MSAI Connect SaaS platform has been sold and is being used by key blue-chip accounts across our target markets.

We believe the opportunity to cross-sell our value-added SaaS solutions alongside our sensors is an attractive opportunity to grow revenue.

We plan to continue to develop our software development capabilities in order to bring to market software products that fulfill current and evolving market applications and customer needs.

We intend to expand investment in our MSAI Connect software platform as a core driver of recurring revenue growth and long-term customer value.

Our platform is currently deployed with several blue-chip customers across our target markets, providing a foundation for expanded software-based offerings layered on top of installed sensor infrastructure.

We believe the opportunity to increase software attachment rates across our existing installed base, as well as to introduce new SaaS modules addressing evolving reliability and operational use cases, represents a meaningful avenue for revenue expansion.

By integrating multi-sensor data into a unified intelligence layer, our SaaS offerings are designed to deliver anomaly detection, workflow integration, and increasingly predictive capabilities that extend beyond device-level monitoring.

Our strategy includes continued investment in software development, AI-driven analytics, system scalability, and cloud architecture optimization to support subscription-based deployments.

Through disciplined product governance and customer-driven roadmap prioritization, we aim to deliver software capabilities that deepen customer engagement, increase recurring revenue per site, and enhance the long-term economic profile of our platform.

Execute On Our Product Roadmap

We continue to place a priority on innovation and product development to be competitive in our target markets over time.

We believe the high performance of our thermal sensors, in conjunction with the flexibility of our software will allow us to continue providing new solutions to our customers and further expand the use cases for our systems across various target markets.

We prioritize disciplined innovation and structured product development to maintain and extend our competitive position across our target markets.

Our roadmap is designed to expand the capabilities of our integrated hardware and software platform while aligning development investments with validated customer use cases and scalable subscription opportunities.

We believe the performance characteristics of our thermal sensing technology, combined with the modular and extensible architecture of our MSAI Connect software platform, position us to broaden the range of reliability and safety applications we support.

By integrating additional sensing modalities, enhancing AI-driven analytics, and refining system architecture, we aim to deliver increasingly predictive and workflow-integrated solutions that address complex, automation-intensive environments.

Our product execution strategy is supported by structured portfolio governance and cross-functional alignment across engineering, reliability expertise, and commercial teams.

This approach is intended to accelerate time-to-market, ensure capital-efficient development, and expand the addressable use cases for our platform across our target markets.

Grow Wallet Share with Legacy Enterprise Customers

We possess an established legacy enterprise customer base that we believe can be further strengthened as our relationships with customers mature.

As our hardware and device customers also become users of our MSAI Connect SaaS solution, we expect we will be able to increase our order volumes.

We expect these deep relationships to inform our product development strategy while simultaneously increasing customer retention rates.

Among our legacy enterprise customers are a leading ecommerce company and a leading automaker.

In July 2022, the ecommerce company initiated a paid pilot program for approximately $350,000 for 87 integrated devices and one-year MSAI Connect (then known as SmartIR) subscriptions across 18 of its facilities in the United Kingdom.

These subscriptions were each renewed for a minimum of one additional year in the third quarter of 2023.

In the first quarter of 2024, the ecommerce company contracted with the Company to roll out our solutions at additional facilities in the U.K.

and European Union.

The ecommerce company has preliminary plans to deploy our devices at additional sites during the course of 2025 and 2026 in order to monitor conveyor belts, rollers, bearings and motors to detect imminent failures and avoid costly maintenance downtime.

In addition to the roll-out of predictive maintenance

solutions in this customer’s fulfillment centers, the Company is working with this customer on applications in multiple other parts of its business system.

These applications include electrical panel monitoring and renewable-energy monitoring.

We also have a pilot project in place with a leading automaker.

We and such customer have identified at least 16 potential additional applications for which we believe our technology would provide high-ROI solutions to condition monitoring challenges or productivity improvement opportunities.

In addition to rolling out the pilot project (early fire detection in electric vehicle battery facilities) across multiple facilities, the automaker is currently evaluating additional applications, with a potential broader rollout in 2025 and beyond.

In 2024, the Company and this customer successfully collaborated to refine the technology for fire detection purposes and utilize targeted person-based review with the objective of eliminating “false positive” readings in the early-fire-detection use case.

The ultimate sale by us of these devices and software subscriptions, the deployment of these devices by each of these customers at these additional sites and their timeline for doing so is subject to risks and uncertainties, including those described in Part I, Item 1A “ Risk Factors ” of this Annual Report.

We maintain relationships with established enterprise customers across our target markets and believe these relationships represent a meaningful opportunity for expansion.

As customers progress from initial hardware deployments to broader, multi-site implementations and adopt our MSAI Connect SaaS platform, we believe we can increase recurring revenue per customer and deepen platform integration within their operations.

Our expansion strategy focuses on increasing software attachment rates, broadening the number of monitored assets and facilities, and introducing additional sensing and analytics capabilities over time.

As customers embed our solutions into their operational workflows, we believe this can strengthen long-term retention, improve visibility into enterprise-wide reliability needs, and create opportunities for incremental solution deployment.

We also expect that collaboration with enterprise customers will continue to inform our product roadmap and use-case prioritization, enabling more targeted development investments aligned with real-world operational requirements.

The ultimate sale of additional devices and software subscriptions, the pace and scale of multi-site deployments, and customer expansion timelines are subject to risks and uncertainties, including those described in Part I, Item 1A “Risk Factors” of this Annual Report.

Expand Our Distribution Network

While the majority of our sales are direct to customers, we also sell our thermal sensors through a network of strategic channel partners.

We believe that these partners enable us to reach more end customers in an operationally efficient manner.

We plan to grow our existing network and establish new distribution partnerships in regions and industry verticals where we do not currently have partnerships.

By leveraging these relationships, we believe we will be able to reach more customers faster and grow our sales.

As accounts grow, we maintain the right to begin selling directly to provide for close relationships with our most strategic and commercially important accounts.

While the majority of our sales are generated through direct engagement with customers, we also utilize a network of strategic channel and distribution partners to extend our market reach.

We believe these partnerships enable us to access additional end customers, geographic regions, and industry verticals in a capital-efficient manner while maintaining operational focus.

Our channel strategy is designed to complement our direct sales efforts by leveraging partners with established customer relationships, technical expertise, and localized support capabilities.

We intend to expand our existing network and establish new distribution partnerships in markets and verticals where we believe indirect channels can accelerate customer acquisition and deployment scale.

As customer relationships mature and account complexity increases, we may elect to engage more directly with certain strategic accounts to support expanded deployments, deeper solution integration, and enterprise-level coordination.

We believe this hybrid direct-and-channel approach provides flexibility to optimize growth, customer engagement, and long-term account value.

Pursue Strategic Acquisitions

We may pursue acquisitions as a means to complement our technology and corporate capabilities should they represent a strategic fit and are consistent with our overall growth strategy.

While there is demand for our products today, we believe such acquisitions could create more expansive use cases for our products, provide greater access to our current target markets, or serve additional applications.

We may pursue selective strategic acquisitions that complement our technology platform, expand our capabilities, or enhance our access to target markets, provided such opportunities align with our long-term growth strategy and capital allocation framework.

Potential acquisition targets may include companies that add differentiated sensing technologies, advanced analytics or AI capabilities, domain-specific expertise, or established customer relationships in adjacent verticals.

We believe thoughtfully integrated acquisitions could broaden the range of use cases supported by our platform, accelerate entry into new markets, strengthen recurring revenue opportunities, or enhance our competitive positioning.

A pursued acquisition would be subject to rigorous evaluation of strategic fit, financial return profile, integration complexity, and long-term shareholder value creation.

Any acquisition activity is subject to risks and uncertainties, including those described in Part I, Item 1A “Risk Factors” of this Annual Report.

Manufacturing

We leverage our years of expertise in infrared and related sensors and devices to design, develop, source, and manufacture a variety of engineered products.

We have developed a flexible manufacturing strategy combining contract manufacturing with certain third-parties for high-volume products and in-house manufacturing for lower-volume specialized products.

For our in-house manufacturing, we purchase many pre-assembled subcomponents, including certain detectors, coolers and optics, as well as other sensors.

These components are then assembled into finished systems, calibrated and tested at our primary production facility located in Beaumont, Texas.

For both of these manufacturing approaches, we often apply our calibration process as part of final assembly.

The global market for infrared sensing devices is highly competitive and well established with large scale manufacturers, such as Teledyne FLIR and Fortive, selling primarily into military and commercial applications.

We leverage our years of expertise in infrared and related sensors and devices to design, develop, and source a variety of engineered products.

We are transitioning our flexible manufacturing strategy toward greater use of contract manufacturing with third parties for both high-volume and an expanding portion of lower-volume specialized products, and correspondingly reducing our reliance on in-house manufacturing activities.

For the remaining in-house manufacturing operations, we purchase many pre-assembled subcomponents, including certain detectors, coolers, optics, and other sensors, which are then assembled into finished systems, calibrated, and tested at our primary production facility in Beaumont, Texas, where we also apply our calibration processes as part of final assembly across both internal and outsourced production.

The global market for infrared sensing devices is highly competitive and well established with large scale manufacturers, such as Teledyne FLIR, selling primarily into military and commercial applications.

Newer and lower-cost manufacturers, both domestic and overseas, have made inroads into the sensor market in recent decades, contributing to a meaningful decline in sensing device prices as well as an expansion of device capabilities.

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The market for software and turn-key solutions that support multiple sensor modalities is even less mature, as complete solutions have either been “Build-Your-Own” or installed by integrators.

We have established a differentiated position in the market providing turn-key infrared sensing solutions for specific end markets, including sensors, sensor devices, edge software, and cloud software, along with specific software modules such as integrations or AI/ML, tailor-made for each specific end market.

believe our technology is class-leading and that our continued innovation will support our position, we have faced and will continue to face competition from existing competitors and new companies, as well as the potential for customers to develop their own end-to-end sensing solutions.

We believe our competitive landscape varies somewhat across our three target markets.

We have established a differentiated position in the market providing a turn-key predictive maintenance and reliability platform for specific end markets.

Although we believe our technology is class-leading and that our continued innovation will support our position, we have faced and will continue to face competition from existing competitors and new companies, as well as the potential for customers to develop their own end-to-end sensing solutions.

We believe our competitive landscape varies somewhat across our target markets.

In distribution and logistics, we mainly compete with large scale manufacturers of handheld sensor devices that provide on-device thermal image display and basic on-device software.

In manufacturing, we generally compete with handheld sensor devices offered by large scale manufacturers as well as fixed camera solutions installed by industry-specialist consultants and integrators that source and install sensor devices from large scale manufacturers and offer limited software solutions without cloud or AI/ML feature sets.

In the oil and gas market, we generally compete with handheld sensor devices offered by large scale manufacturers, with smaller integrators that offer sensing device payloads for fixed-wing or UAV applications, and with fixed camera solutions installed by industry specialists that offer more fully featured software solutions that sometimes include basic AI/ML capabilities.

With regards to the data center market, given the fast pace of innovation and development, competition is quickly evolving but generally fractionalized to specific use cases and failure points.

Sales and Marketing

We plan to expand our sales and marketing efforts to attract new customers and grow orders from existing customers.

We maintain a global sales presence and sell directly to the majority of our customers.

Members of our sales team are technical and understand use cases and value drivers across our three target markets.

While we maintain direct relationships with the majority of our customers, we have also developed a network of active direct dealers and distributors, including our strategic channel partners, to sell, install, and support our solutions.

We collect feedback directly from our customers to generate insights that drive our business and innovation strategies.

We will continue to expand and optimize our dealer network so that we have sufficient geographic coverage across both existing and new markets.

We take a targeted, data-driven marketing approach to each of our three target markets.

We develop and publish digital content, including blogs, webinars, videos, and other digital solutions to educate potential customers and expand our reach.

We leverage a full technology stack, including a customer relationship management system, marketing automation platforms, and account-based marketing tools to optimize target end user interactions and to drive efficient digital marketing efforts.

We also actively pursue thought-leadership opportunities to present and speak at market-specific conferences, executive events, trade shows and industry events to further develop our brand and reputation.

These opportunities also allow us to showcase our technology and attract additional customer interest.

We are focused on expanding our sales and marketing capabilities to drive customer acquisition, increase software attachment, and grow recurring revenue from both new and existing accounts.

Our global sales organization primarily engages customers directly, particularly in enterprise and strategic accounts, and is structured to combine technical domain knowledge with consultative solution selling.

Members of our sales team are trained to understand customer reliability challenges, operational value drivers, and deployment economics across our target markets.

In addition to direct sales, we maintain a network of active distributors and strategic channel partners who support regional coverage, installation, and localized customer engagement.

This hybrid model enables us to balance customer engagement with scalable geographic reach.

We intend to further optimize and expand our channel ecosystem to enhance coverage across priority regions and verticals while maintaining a direct involved with strategically significant accounts.

Our marketing approach is targeted and data-driven, designed to engage decision-makers in automation-intensive and mission-critical industries.

We produce and distribute digital content—including technical resources, case studies, webinars, and educational materials—to demonstrate use-case value and accelerate customer understanding of multi-sensor condition monitoring.

We leverage an integrated technology stack, including customer relationship management systems, marketing automation platforms, and account-based marketing tools, to support pipeline visibility, campaign optimization, and coordinated sales engagement.

We also pursue thought-leadership initiatives through participation in industry conferences, executive forums, and sector-specific events.

These engagements support brand credibility, reinforce our technical differentiation, and generate incremental customer interest across our target markets.

Research and Development

We have invested significant resources into research and development of our platform.

We believe that our success has been, and will continue to be, substantially affected by our ability to innovate these new products and technologies to both augment our existing offerings and create new avenues for growth.

We strive to differentiate ourselves from our competition with our research and development capabilities.

We intend to continue to have significant internal research and development expenses in the future to provide a continuing flow of innovative and high-quality products to maintain and enhance our competitive position in each of our business segments.

In addition to these internally funded activities, we may engage in research and development projects that are reimbursed by government agencies or prime contractors pursuant to development contracts we undertake.

We have invested significant resources into research and development of our integrated multi-sensor platform, including advancements in sensing technologies, edge processing, cloud architecture, and AI-driven analytics.

We believe our long-term success depends in large part on our ability to translate emerging sensing and analytical capabilities into scalable, subscription-based solutions that address complex reliability and safety challenges across our target markets.

We have established a dedicated product enablement function comprised of sales, marketing and engineering representatives responsible for aligning customer feedback, industry trend analysis, and technical innovation with our product roadmap.

This group collaborates directly with enterprise customers to evaluate evolving reliability challenges and assess emerging automation, AI, and sensing trends across our target markets.

Insights derived from these engagements inform structured portfolio prioritization and capital allocation decisions.

Raw Materials

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Department of State.

Some of MSAI’s thermal cameras fall under specific Export Control Classification Number (“ECCN”) codes.

Some of MSAI’s thermal cameras fall under specific Export Control Classification

Number (“ECCN”) codes.

ECCN items are governed by the U.S.

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We own and control various intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and copyrights.

We do not expect the expiration or termination of any such patents, patent applications and license agreements to have a material adverse effect on our business, results of operations or financial condition.

As of December 31, 2024, we employed a total of 41 people, 36 of whom are employed on a full-time basis, in the United States.

We do not expect the expiration or termination of the foregoing to have a material adverse effect on our business, results of operations or financial condition.

As of December 31, 2025, we employed a total of 21 people, all of whom are employed on a full-time basis, in the United States.

We also engage numerous consultants and contractors to supplement our permanent workforce.

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We believe we have strong and positive relations with our employees.

Our corporate headquarters is located in Beaumont, Texas where we lease approximately 6,380 square feet of office space and 7,320 square feet of warehouse space.

Our office space is leased pursuant to two one-year leases which both expire on December 31,

Our warehouse space is leased pursuant to a one-year lease which expires July 31, 2025.

We expect to be able to extend these leases prior to their expiration on commercially reasonable terms.

Our office space contains engineering, manufacturing, research and development and administrative functions of the Company.

Our warehouse space houses our inventory, stock items and quality control operations.

Our corporate headquarters is located in Houston, Texas where we rent private office space in a co-working facility.

Our office space is rented pursuant to a one-year agreement which expires on December 31, 2026.

We also lease a facility, approximately 5,000 square feet, in Beaumont, Texas pursuant to a one-year agreement which expires December 31, 2026.

Our Beaumont facility contains engineering, manufacturing, research and development and administrative personnel and stores most of our inventory.

We believe that our office and warehouse space is adequate for our current needs and, should we need additional space, we believe we will be able to obtain additional space on commercially reasonable terms.

We expect to be able to extend both agreements prior to their expiration on commercially reasonable terms should the space continue to align with the Company’s location and office strategy.

Corporate Information

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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 1. Business