What changed in this filing

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Item 1A. Risk Factors

2026-03-26 compared with 2025-03-24 · 270 added, 255 removed, 1260 unchanged (29% of the section changed)

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interpret the disclosure of any risk factor to imply that the risk has not already materialized.

disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and

its securities in the future.

References to past events are provided by way of examples only and are not intended to be a complete

listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.

Related to Our Business

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There is a risk that our strategy

to operate profitably may not be as successful as we envision or occur as quickly as we expect.

to operate profitably may not be as successful as we contemplate or occur as quickly as we expect.

We may not achieve our business objectives,

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terms, or at all, and could require us to sell certain assets or discontinue or curtail our operations.

cannot ascertain that there is no substantial doubt about our ability to continue as a going concern.

We will not be able to achieve

our objectives and will not be able to continue our operations if we cannot adequately fund our operations.

is substantial doubt that the Company can continue as an ongoing business for the next 12 months.

If we are unable to continue as a going

concern, we might have to liquidate our assets and the values we receive for our assets in liquidation or dissolution could be significantly

lower than the values reflected in our financial statements.

In addition, the inclusion of an explanatory paragraph regarding substantial

doubt about our ability to continue as a going concern and our lack of sufficient liquidity resources may materially adversely affect

our share price and our ability to raise new capital or to enter into critical contractual relations with third parties.

assurance that we will be able to adequately fund our operations in the future.

expect to derive a substantial portion of our future revenue from a portfolio of related products and technologies;

if we cannot successfully

launch our products or further develop them to include additional features, our products and technologies fail to satisfy customer

demands or achieve widespread market acceptance, our business, operating results, financial condition, and growth prospects would be

adversely affected.

launch our products or further develop them to include additional features, our products and technologies fail to satisfy customer demands

or achieve market acceptance, our business, operating results, financial condition, and growth prospects would be adversely

expect to derive a substantial portion of our future revenue from smart products incorporating our “plug and play” technologies.

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embrace our smart products and technologies in significant numbers.

Our success depends on attracting many potential customers to purchase

Our success depends on attracting potential customers to purchase

our products and, in the future, the associated services we intend to provide to our customers.

While we have accepted preorders for

certain products, preorders are not commitments to purchase our products and are subject to cancellation by customers.

All preorders

have been fulfilled.

If our existing preorder and prospective customers do not perceive our products to be of sufficiently high value

and quality, cost competitive and appealing in aesthetics or performance, we may not be able to retain our current preorder customers

or attract new customers, and our business, prospects, financial condition, results of operations, and cash flows would suffer as a result.

In addition, we may incur significantly higher and more sustained advertising and promotional expenditures than we have previously incurred

to attract customers.

Although some of our smart products are now commercially available, there is still significant uncertainty as to

customer demand for our smart products and technologies and whether we will be able to achieve additional sales.

Further, demand for

our products and technologies is and will continue to be affected by a number of factors, many of which are beyond our control, such

as our ability to obtain market acceptance;

If our existing and prospective customers

do not perceive our products to be of sufficiently high value and quality, cost competitive and appealing in aesthetics or performance,

we may not be able to retain our current customers or attract new customers, and our business, prospects, financial condition, results

of operations, and cash flows would suffer as a result.

In addition, we may incur significantly higher and more sustained advertising

and promotional expenditures than we have previously incurred to attract customers.

Although some of our smart products are now commercially

available, there is still significant uncertainty as to customer demand for our smart products and technologies and whether we will be

able to achieve additional sales.

Further, demand for our products and technologies is and will continue to be affected by a number of

factors, many of which are beyond our control, such as our ability to obtain market acceptance;

declines in consumer discretionary spending;

the development and acceptance of new features,

integrations and capabilities for our products and technologies;

the timing of development and release of competing new products and

technologies;

the development and acceptance of new features, integrations and capabilities for our products and technologies;

the timing of development

and release of competing new products and technologies;

consumer preferences;

the perception of ease of use, reliability and security of our products and technologies;

product changes by us or our competitors;

technological changes and developments within the markets we serve;

developments in data privacy

the perception of ease of use, reliability and security

of our products and technologies;

price or product changes by us or our competitors;

technological changes and developments within the

markets we serve;

developments in data privacy regulations;

growth, contraction and rapid evolution of our market;

supply chain disruptions and shortages, including the potential impact

of tariffs and other trade barriers and restrictions;

and general economic conditions and trends.

supply chain disruptions

and shortages, including the potential impact of tariffs and other trade barriers and restrictions;

and general economic conditions and

we are unable to successfully release all of our planned smart products and technologies, enhance their capabilities, meet demands of

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If demand declines for any of these or other reasons, our business could be adversely affected.

may be adversely impacted by monetary and trade policies.

and trade policies impact in varying degrees our industry market participants (from manufacturer to user).

The reaction(s) by market

participants to such policies or changes in policies may impact our operations.

While all market participants react to such policies,

very few economists have been able to accurately forecast the short-term impact of the trade policies in particular.

Relatively high

interest rates and rapidly changing trade policies and postures create different reactions from the market participants.

part so far, our manufacturers have substantially reduced their prices to offset the increased tariffs related to the products we market.

Also, a significant portion of the products we market are manufactured in the United States.

The Chinese manufacturers we use are all

looking at alternatives to move away their production from China.

Some of the third-party manufacturers we use are located in countries

which are not severely impacted by the trade policies postures.

We are also looking at repatriating the manufacturing of certain components

and assembly of our smart and advanced products to the United States.

Accordingly, with a few exceptions, we do not believe that there

will be increased pressure from customer demands to reduce our gross profit per unit.

There are no guarantees that it will remain so.

Changing trade policies and reactions by market participants are impossible to predict at this point.

On February 20, 2026, the U.S.

Supreme Court ruled that certain tariffs imposed under the International Economic Emergency Powers Act (“IEEPA”) were unconstitutional.

Following the U.S.

Supreme Court’s decision, on February 24, 2026, the Trump Administration implemented a global 10% tariff on

all countries for a period of 150 days.

Significant uncertainty remains regarding the status of existing and newly announced tariffs,

potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be

imposed, modified, or suspended.

believe that the macroeconomic conditions in the United States will improve once interest rates are lowered and trade policies are effective

and predictable.

Impact from the monetary and trade policies, such as tariffs, increases in interest rates, supply and overhead costs

and transportation costs, may adversely affect our operating results, and we may not be able to offset increased costs with increased

sales price per unit, particularly as we work toward commercial manufacturing of our products.

Although we do not believe that inflation

has had a material impact on our financial position or results of operations to date, we may experience some effect in the near future

(especially if tariffs are significantly increased and are not absorbed by the manufacturers).

Accordingly, these monetary and trade

policies, and the uncertainty around them, could materially adversely affect our business, financial condition, and results of operations.

economic conditions and the effect of economic pressures and other business factors on discretionary consumer spending and consumer preferences

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in macroeconomic conditions that impact consumer spending, including discretionary spending.

Declines in consumer spending have resulted

Declines in consumer spending has resulted

in, and could in the future result in, decreased demand for our products and services, which has adversely affected the results of our

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for completing development.

If we expend a significant number of resources on research and development efforts that do not lead to the

successful introduction of new products, functionality or improvements that are competitive in our current or future markets, our business

and results of operations will suffer.

If technical problems or delays arise, further improvements in our products and technologies and

the introduction of future products or technologies could be adversely impacted, we could incur significant additional expenses, and

the Sky Technologies platform business may fail.

If we expend a sizable number of resources on research and development efforts that do not lead to the successful

introduction of new products, functionality or improvements that are competitive in our current or future markets, our business and results

of operations will suffer.

If technical problems or delays arise, further improvements in our products and technologies and the introduction

of future products or technologies could be adversely impacted, we could incur significant additional expenses, and the Sky Technologies

platform business may fail.

we are unable to introduce new features or services successfully or make enhancements to our products and technologies or fail to integrate

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It is difficult

to predict customer adoption of new features.

Such uncertainty limits our ability to forecast our future results of operations and subjects

us to a number of challenges, including our ability to plan for and model future growth.

If we cannot address such uncertainties and

successfully develop new features, enhance our products and technologies, or otherwise overcome technological challenges and competing

to predict customers’ adoption of new features.

Such uncertainty limits our ability to forecast our future results of operations

and subjects us to a number of challenges, including our ability to plan for and model future growth.

If we cannot address such uncertainties

and successfully develop new features, enhance our products and technologies, or otherwise overcome technological challenges and competing

technologies, our business and results of operations could be adversely affected.

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and technologies, any of which could cause us to lose existing customers or impair our ability to attract new customers.

the introduction of new products and services by competitors or the development of entirely new technologies to replace existing offerings

could make our products and technologies obsolete or adversely affect our ability to compete.

the introduction of new products and services by competitors or the development of entirely innovative technologies to replace existing

offerings could make our products and technologies obsolete or adversely affect our ability to compete.

Any delay or failure in the introduction

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If we are not permitted or able to integrate with these and other third-party products, technologies and applications

in the future, our business, results of operations and financial condition would be harmed.

in the future, our business, results of operations and financial condition will be harmed.

Further, any undetected errors or defects

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we are unable to access third-party platforms or technologies, or if our access is withdrawn, denied or is not available on terms acceptable

to us, or if the platforms or technologies are delayed or change without notice to us, our business and operating results could be adversely

to us, or if the platforms or technologies are delayed or changed without notice to us, our business and operating results could be adversely

we fail to maintain and improve our methods and technologies, or anticipate new methods or technologies, for data collection, organization,

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A lack of interoperability

could also result in significant redesign costs and harm relations with our customers.

could also result in significant redesigning costs and harm relations with our customers.

Further, the mere announcement of an incompatibility

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also may identify and pursue strategic acquisition candidates that would help support these initiatives, such as the 2023 acquisition

of Belami, an e-commerce platform that carries a variety of home décor items, including lighting.

of Belami, an e-commerce platform that carries a variety of home decor items, including lighting.

and implementing various strategic business initiatives requires us to incur additional expenses and capital expenditures and also requires

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as subscription services.

We have invested, and plan to continue to invest, significant time, resources, and capital into expanding our

We have invested, and plan to continue to invest considerable time, resources, and capital into expanding our

products and technologies with no expectation that they will provide material revenue in the near term and without any assurance they

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also be unable to launch or manufacture our products and technologies or develop recurring revenue streams, such as anticipated subscription

services, in a timely manner, which would further negatively impact our ability to become profitable.

Moreover, as we continue to explore,

develop and refine our smart products and technologies, we expect that market preferences will continue to evolve, and, accordingly,

services, in a timely manner, which would further negatively impact on our ability to become profitable.

Moreover, as we continue to

explore, develop and refine our smart products and technologies, we expect that market preferences will continue to evolve, and, accordingly,

our products and technologies may not generate sufficient interest by end-user customers, and we may be unable to compete effectively

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or other debt instruments may have terms and/or conditions, such as interest rates, restrictive covenants and control or revocation

provisions, that are not acceptable to management or our board of directors (the “board” or “board of directors”);

provisions, which are not acceptable to management or our board of directors (the “board” or “board of directors”);

financing increases expenses, and we must repay the debt regardless of our operating results;

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As we develop our revenue

base, we have raised additional funds through the sale of our common stock, preferred stock and warrants and issuance of debt, including

receiving aggregate net proceeds from at the market offerings (sometimes referred as “ATM”) of our common stock of $4.3 million,

and total gross proceeds of $11.0 million from the sale of two series of newly authorized preferred stock during 2024.

For additional

information regarding our financing arrangements, see the “Liquidity and Capital Resources” heading in the “Management’s

Discussion and Analysis” section of this Form 10-K.

base, we have raised additional funds through the sale of our common stock through either private placements or at the market offerings

(sometimes referred as “ATM”), preferred stock and warrants and issuance of debt.

During January 2026, we generated proceeds

of $29.3 million from the issuance of shares of our common stock.

For additional information regarding

our financing arrangements, see the “Liquidity and Capital Resources” heading in the “Management’s Discussion

and Analysis” section of this Form 10-K.

we fail to obtain required additional financing to sustain our business before we are able to produce levels of revenue to meet our financial

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reduce our revenue and profitability, any of which could have a material adverse effect on our results of operations and financial condition.

We may not have available sufficient financial or other resources to continue to make the investments necessary to maintain our competitive

We may not have sufficient financial or other resources available to continue to make the investments necessary to maintain our competitive

depend on third parties to provide integrated circuit chip sets and other critical components for use in our products.

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Going forward, we believe we can obtain more chips as needed within a

reasonable time and may be able to replace difficult to acquire components with different products or modify our design if necessary.

reasonable time and may be able to replace difficult to acquire components with assorted products or modify our design if necessary.

If we do not properly anticipate the need for or procure critical components, we may pay higher prices for those components, our gross

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the raw materials used to make such products and components.

may also need to hire and train a significant number of employees to engage in full-scale commercial manufacturing operations.

are various risks and challenges associated with hiring, training and managing a large workforce in time for us to commence our planned

commercial production and sale of our smart products and technologies, including that the workforce will not have experience with manufacturing

may also need to hire and train a sizable number of employees to engage in full-scale commercial manufacturing operations.

various risks and challenges associated with hiring, training and managing a large workforce in time for us to commence our planned commercial

production and sale of our smart products and technologies, including that the workforce will not have experience with manufacturing

our smart products and therefore will require significant training.

Additionally,

a significant portion of our product strategy will rely upon our ability to successfully rationalize and improve the efficiency of our

a sizable portion of our product strategy will rely upon our ability to successfully rationalize and improve the efficiency of our operations.

In particular, our product strategy relies on our ability to reduce our production costs in order to remain competitive.

As there is limited historical basis for estimating the demand for our smart products and technologies, or our ability to develop, manufacture

and deliver our smart products, we may be unable to accurately estimate our inventory and production requirements, which would affect

our ability to successfully implement cost reduction measures.

If we overestimate our requirements, we may have excess inventory, which

would increase our costs.

If we underestimate our requirements, our suppliers may have inadequate inventory, which could interrupt the

manufacture of the smart products and result in delays in shipments and revenues.

limited historical basis for estimating the demand for our smart products and technologies, or our ability to develop, manufacture and

deliver our smart products, we may be unable to accurately estimate our inventory and production requirements, which would affect our

ability to successfully implement cost reduction measures.

If we overestimate our requirements, we may have excess inventory, which would

increase our costs.

If we underestimate our requirements, our suppliers may have inadequate inventory, which could interrupt the manufacture

of the smart products and result in delays in shipments and revenues.

We may also rely on a limited number of suppliers;

during 2024, we had less than 10 major vendors that accounted for a majority of our cost of sales.

For additional information regarding

our suppliers, see “Item 1.

Business - Third-Party Manufacturing and Suppliers.” In addition, lead times for materials and

components may vary significantly and depend on factors such as the specific supplier, contract terms and demand for each component at

a given time.

If we are unable to successfully implement cost reduction measures, if these efforts do not generate the level of cost

savings that we expect going forward or result in higher-than-expected costs, or if we fail to order sufficient quantities of components

in a timely manner, our business, financial condition, results of operations or cash flows could be materially adversely affected.

we had less than 10 major vendors that accounted for a majority of our cost of sales.

For additional information regarding our suppliers,

Business - Third-Party Manufacturing and Suppliers.” In addition, lead times for materials and components may

vary significantly and depend on factors such as the specific supplier, contract terms and demand for each component at a given time.

If we are unable to successfully implement cost reduction measures, if these efforts do not generate the level of cost savings that we

expect going forward or result in higher-than-expected costs, or if we fail to order sufficient quantities of components in a timely

manner, our business, financial condition, results of operations or cash flows could be materially adversely affected.

third-party manufacturers and many of our suppliers are located in China, which exposes us to additional risks.

third-party manufacturers are in China, which exposes us to additional risks that could negatively impact our business and operations.

We are subject to risks associated with shipping products across borders, including shipping delays, customs duties, export quotas and

other trade restrictions that could have a significant impact on our revenue and profitability.

administration has imposed

additional tariffs and other trade barriers and restrictions on certain products imported into the United States with China as the

country of origin.

While these tariffs have not had a significant impact on the shipment of our products to international markets to

date, as we are continuing to transition our business, we cannot predict the impact of future tariffs on our products and technologies,

and the costs of supplies and manufacturing may increase.

If we cannot deliver our products on a competitive and timely basis, our relationships

with customers will be damaged and our financial condition could also be harmed.

The future imposition of, or significant increases in,

tariffs, custom duties, export quotas and other barriers and restrictions by the U.S.

on China or other countries could disrupt our supply

chain, increase the cost of our raw materials and therefore our pricing, and impose the burdens of compliance with foreign trade laws,

any of which could potentially affect our bottom line and sales.

We cannot assure you that we will not be adversely affected by changes

in the trade laws of foreign jurisdictions where we sell and seek to sell our products.

of our third-party manufacturers are in China, which exposes us to additional risks that could negatively impact our business and

We are subject to risks associated with shipping products across borders, including shipping delays, customs duties,

export quotas and other trade restrictions that could have a significant impact on our revenue and profitability.

administration has imposed additional tariffs and other trade barriers and restrictions on certain products imported into the United

States with China as the country of origin.

While these tariffs have not had a significant impact on the shipment of our products to

international markets to date, as we are continuing to transition our business, we cannot predict the impact of future tariffs on

our products and technologies, and the costs of supplies and manufacturing may increase.

If we cannot deliver our products on a

competitive and timely basis, our relationships with customers will be damaged and our financial condition could also be harmed.

future imposition of, or significant increases in, tariffs, custom duties, export quotas and other barriers and restrictions by the

on China or other countries could disrupt our supply chain, increase the cost of our raw materials and therefore our pricing,

and impose the burdens of compliance with foreign trade laws, any of which could potentially affect our bottom line and sales.

cannot assure you that we will not be adversely affected by changes in the trade laws of foreign jurisdictions where we sell and

seek to sell our products.

addition, the prosecution of intellectual property infringement and trade secret theft in China is more difficult than in the United

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products business may become substantially dependent on contracts that are awarded through competitive bidding processes.

may obtain a significant portion of our products revenues pursuant to contracts that are subject to competitive bidding, including contracts

may obtain a sizable portion of our products revenues pursuant to contracts that are subject to competitive bidding, including contracts

with municipal authorities.

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need to estimate accurately the resources and cost structure required to service a contract;

expenses and delays that we might suffer if our competitors protest a contract awarded to us, including the potential that the contract

expenses and delays that we might suffer if our competitors protest a contract awarded to us, including the possibility that the contract

may be terminated and a new bid competition may be conducted.

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believe that developing and maintaining awareness of our brand is critical to achieving widespread acceptance of our products and technologies

and is an important element in attracting and retaining customers.

and is an essential element in attracting and retaining customers.

Efforts to build our brand may involve significant expense and may

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While we have received a variety of safety

certifications on our products, including UL, Underwriters Laboratories of Canada (cUL), Conformité Européenne (CE) and

International Electrotechnical Commission for Electrical Equipment Certification Body (the IECEE CB scheme), we may need or desire to

obtain additional certifications for new product configurations, which will increase the time and costs to complete our product launches

and which we may be unable to obtain within a reasonable time, or at all.

In addition, certain electronic products require FCC certification,

and we have obtained FCC certification on applicable products to ensure electromagnetic interference compliance.

Compliance with applicable

regulatory requirements is subject to continual review and is monitored through periodic inspections and other review and reporting mechanisms.

certifications on our products, including UL, Underwriters Laboratories of Canada (cUL), Conformite Europeenne (CE) and International

Electrotechnical Commission for Electrical Equipment Certification Body (the IECEE CB scheme), we may need or desire to obtain additional

certifications for new product configurations, which will increase the time and costs to complete our product launches and which we may

be unable to obtain within a reasonable time, or at all.

In addition, certain electronic products require FCC certification, and we have

obtained FCC certification on applicable products to ensure electromagnetic interference compliance.

Compliance with applicable regulatory

requirements is subject to continual review and is monitored through periodic inspections and other review and reporting mechanisms.

Although we believe that our broad knowledge and experience with electrical codes and safety standards have facilitated certification

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For instance, we may seek certification of our products from

UL, United Laboratories for Canada (cUL) and Conformité Européenne (CE).

Although we believe that our broad knowledge and

experience with electrical codes and safety standards have facilitated certification approvals, we cannot ensure that we will be able

to obtain any such certifications for our new products and technologies or that, if certification standards are amended, we will be able

to maintain such certifications for our existing products.

UL, United Laboratories for Canada (cUL) and Conformite Europeenne (CE).

Although we believe that our broad knowledge and experience

with electrical codes and safety standards have facilitated certification approvals, we cannot ensure that we will be able to obtain

any such certifications for our new products and technologies or that, if certification standards are amended, we will be able to maintain

such certifications for our existing products.

Moreover, although we are not aware of any effort to amend any existing certification

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affect the Company’s cash tax liabilities, results of operations and financial condition.

authorities may successfully assert that the Company should have collected or in the future should collect sales and use or similar taxes

for its services, which could adversely affect the Company’s results of operations.

taxing authorities may assert that the Company had an economic nexus with their state and were required to collect sales and use or similar

taxes with respect to past or future products and technologies that the Company has sold or will sell, which could result in tax assessments,

authorities may successfully assert that the Company should have collected or in the future should collect sales and use taxes for its

services, which could adversely affect the Company’s results of operations.

taxing authorities may assert that the Company had an economic nexus with their state and were required to collect sales and use taxes

with respect to past or future products and technologies that the Company has sold or will sell, which could result in tax assessments,

penalties, and interest.

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In general, an “ownership

change” will occur if there is a cumulative change in our ownership by “five percent stockholders” that exceeds 50

change” will occur if there is a cumulative change in our ownership by “five percent stockholders” that exceeds fifty

percentage points over a rolling three-year period.

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We will also bear the expenses of such litigation for any of our directors, officers, employees or agents, upon such person’s

promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification.

foregoing obligations could result in our incurring substantial expenditures to cover the cost of settlement or damage awards against

directors and officers, which we may be unable to recoup.

These provisions and resultant costs may also discourage us from bringing a

lawsuit against directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation

by our stockholders against our directors and officers even though such actions, if successful, might otherwise benefit us and stockholders.

promise to repay us therefore if it is ultimately determined that no such person shall have been entitled to indemnification.

The foregoing

obligations could result in our incurring substantial expenditures to cover the cost of settlement or damage awards against directors

and officers, which we may be unable to recoup.

These provisions and resultant costs may also discourage us from bringing a lawsuit against

directors and officers for breaches of their fiduciary duties and may similarly discourage the filing of derivative litigation by our

stockholders against our directors and officers even though such actions, if successful, might otherwise benefit us and stockholders.

factors could have a materially adverse effect on our future profitability and financial condition.

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Related to Our Operations

actual operating results may differ significantly from guidance provided by our management.

actual operating results will differ significantly from guidance provided by our management.

time to time, the Company may release guidance in its earnings releases, earnings conference calls, or otherwise, regarding its future

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The Company will generally state possible outcomes as high and low ranges which are intended to provide a

sensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of the suggested

sensitivity analysis as variables are changed but are not intended to mean that actual results could not fall outside of the suggested

The principal reason that the Company would release guidance would be to provide a basis for the Company’s management to

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rules and regulations, including those related to climate change, could increase compliance burdens and associated regulatory costs,

as well as enhance the risk of claims and regulatory actions, which could adversely impact our reputation and our efforts to raise capital,

including as a result of public regulatory sanctions.

as well as enhance the risk of claims and regulatory actions, which could adversely impact on our reputation and our efforts to raise

capital, including as a result of public regulatory sanctions.

future success depends on our ability to retain key employees and to attract, retain and motivate qualified personnel.

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Furthermore, replacing executive officers and key personnel may be difficult and may take an extended

period of time, as competition for experienced personnel in our industry is substantial and we could be impacted by labor shortages.

period of time, as competition for experienced personnel in our industry is substantial and we could be affected by labor shortages.

In addition, if any of our officers or other key personnel join a competitor or form a competing company, we may lose some of our customers.

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market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.

believe that any internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute,

believe that all internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute,

assurance that the objectives of the control system are met.

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In addition, there is a risk that

one or more of our current service providers and other partners could go out of business, including as a result of difficult economic

one or more of our current service providers and other partners could go out of business, including as a result of unfavorable economic

conditions, which could directly affect our ability to attain our operating goals on schedule and on budget.

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31, 2025 , no assurance can be given that further deterioration of the global credit and financial markets would not negatively

impact our current portfolio of cash equivalents or our ability to meet our financing objectives.

For instance, in March 2023, the FDIC

took control and was appointed receiver of Silicon Valley Bank and New York Signature Bank.

impact on our current portfolio of cash equivalents or our ability to meet our financing objectives.

For instance, in March 2023, the

FDIC took control and was appointed receiver of Silicon Valley Bank and New York Signature Bank.

While the Company did not have any direct

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affected by economic, political, geopolitical, and military conditions affecting Israel.

October 2023, Israel declared war against Hamas.

Although there is currently a ceasefire in place, tensions are still heightened and

it is difficult to predict whether the conflict may reignite.

Should the Israel-Hamas war resume, the war’s economic implications

on the Company’s business and operations and on Israel’s economy in general is difficult to predict.

In addition, clashes

between Israel and Hezbollah in Lebanon have increased.

These conflicts, as well as actions that could be taken in the future by NATO,

the United States, the United Kingdom, the European Union or Israel’s neighboring states and other countries, have created global

security concerns that may result in a greater or lasting regional conflict.

To date, our operations have not been adversely affected

by this situation.

However, the individuals working on developing and improving our product offerings are not only within the range of

rockets from the Gaza Strip, but also within the range of rockets that can be fired from Lebanon, Syria, Iran or elsewhere in the Middle

If hostile action or hostilities otherwise disrupt our Israeli operations, our ability to improve timely our product offerings

could be materially and adversely affected.

In addition, several hundred thousand Israeli reservists were drafted to perform immediate

military service.

If individuals working on improving our product offerings are called for service in the current war with Hamas, we

expect such persons would be absent for an extended period.

As a result, our operations may be disrupted by such absences, which could

materially and adversely affect our business and results of operations.

In addition, shifting economic and political conditions in the

United States and in other countries may result in changes in how the United States and other countries conduct business and other relations

with Israel, which may have an adverse impact on our Israeli operations and our business.

In March 2026, the U.S.

and Israel engaged militarily

with the Islamic Republic of Iran.

This engagement’s economic implications on the Company’s business and operations and on

Israel’s economy in general is difficult to predict.

This conflict, as well as actions that could be taken in the future, have

created security concerns that may result in a greater or lasting regional conflict.

To date, our operations have not been adversely

affected by this situation.

However, the individuals working on developing and improving our product offerings are not only within the

range of rockets from the Gaza Strip, but also within the range of rockets that can be fired from neighboring countries If hostilities

otherwise disrupt our Israeli operations, our ability to improve timely our product offerings could be materially and adversely affected...

In addition, shifting economic and political conditions in the United States and in other countries may result in changes in how the

United States and other countries conduct business and other relations with Israel, which may have an adverse impact on our Israeli operations

and our business.

internal computer systems, or those of our third-party manufacturers or other contractors or consultants, may fail or suffer security

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of which could have a material adverse effect on our results of operations, financial condition and cash flows.

consultants, vendors and others to whom we entrust confidential data, and on whom we rely to provide products and services, face similar

consultants, vendors and others to whom we entrust confidential data, and on whom we rely on to provide products and services, face similar

threats and growing requirements.

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for security incidents or breaches.

The successful assertion of one or more large claims against us that exceeds our available insurance

The successful assertion of one or more large claims against us that exceed our available insurance

coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance

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have begun to incorporate artificial intelligence capabilities in our product offerings, which may present operational and reputational

are in the early stages of incorporating artificial intelligence (sometimes referred to as “AI”) capabilities into certain

product offerings.

are in the preliminary stages of incorporating artificial intelligence (sometimes referred to as “AI”) capabilities into

certain product offerings.

These features may become important in our operations over time.

Our competitors or other third parties may incorporate

AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely

affect our results of operations.

Additionally, if the content, analyses, or recommendations that AI applications assist in producing

are or are alleged to be deficient, inaccurate, or biased, we could be subject to competitive risks, potential legal liability, and reputational

harm, and our business, financial condition and results of operations may be adversely affected.

The use of AI capabilities may also

result in cybersecurity incidents, and any such cybersecurity incidents related to our use of AI capabilities could adversely affect

our business.

Furthermore, the legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, and compliance

with new or changing laws, regulations or industry standards relating to AI may impose significant operational costs and may limit our

ability to use AI technologies in our products.

There can be no assurance that the measures we have taken to mitigate the potential risks

related to the use of AI technologies in our products will be sufficient.

Our competitors or other third parties may

incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and

adversely affect our results of operations.

Additionally, if the content, analyses, or recommendations that AI applications assist in

producing are or are alleged to be deficient, inaccurate, or biased, we could be subject to competitive risks, potential legal liability,

and reputational harm, and our business, financial condition and results of operations may be adversely affected.

The use of AI capabilities

may also result in cybersecurity incidents, and any such cybersecurity incidents related to our use of AI capabilities could adversely

affect our business.

Furthermore, the legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, and

compliance with new or changing laws, regulations or industry standards relating to AI may impose significant operational costs and may

limit our ability to use AI technologies in our products.

There can be no assurance that the measures we have taken to mitigate the potential

risks related to the use of AI technologies in our products will be sufficient.

Failure to appropriately respond to this evolving landscape

may result in legal liability, regulatory action or brand and reputational harm.

may use artificial intelligence or machine learning technologies in certain business processes.

These technologies may introduce risks

related to algorithmic bias, reliability of outputs, evolving regulatory frameworks, and the collection and use of data, which could

result in operational, compliance, or reputational harm if not properly managed.

or accidental actions or inactions by employees or other third parties with authorized access to our networks may result in the exposure

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A prolonged service disruption affecting our cloud-based solution for any of the foregoing reasons

would negatively impact our ability to serve our customers and could damage our reputation with current and potential customers, expose

would negatively impact on our ability to serve our customers and could damage our reputation with current and potential customers, expose

us to liability, cause us to lose customers or otherwise harm our business.

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Any significant disruption of, limitation of our access to or other interference with our use of

AWS would negatively impact our operations and could seriously harm our business.

In addition, any transition of the cloud services currently

provided by AWS to another cloud services provider would require significant time and expense and could disrupt or degrade delivery of

our platform.

Our business relies on the availability of our platform for our customers, and we may lose customers if they are not able

to access our platform or encounter difficulties in doing so.

The level of service provided by AWS could affect the availability or speed

of our platform, which may also impact the usage of, and our customers’ satisfaction with, our platform and could seriously harm

our business and reputation.

AWS would negatively impact on our operations and could seriously harm our business.

In addition, any transition of the cloud services

currently provided by AWS to another cloud services provider would require considerable time and expense and could disrupt or degrade

delivery of our platform.

Our business relies on the availability of our platform for our customers, and we may lose customers if they

are not able to access our platform or encounter difficulties in doing so.

The level of service provided by AWS could affect the availability

or speed of our platform, which may also impact on the usage of, and our customers’ satisfaction with, our platform and could seriously

harm our business and reputation.

If AWS increases pricing terms, terminates or seeks to terminate our contractual relationship, establishes

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with respect to us, our business, financial condition, revenues, results of operations or cash flows may be harmed.

may collect, store, process and use our customers’ personally identifiable information and other data, which subjects us to governmental

may collect, store, process and use our customers’ personal identifiable information and other data, which subjects us to governmental

regulation and other legal obligations related to data privacy, information security and data protection.

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harm our business.

may collect, store, process and use our customers’ personally identifiable information and other data in our transactions with

them, and we may rely on third parties that are not directly under our control to do so as well.

may collect, store, process and use our customers’ personal identifiable information and other data in our transactions with them,

and we may rely on third parties that are not directly under our control to do so as well.

While we take reasonable measures intended

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The ERP system will be critical to our ability

to provide important information to our management, obtain and deliver products, provide services and customer support, send invoices

to provide valuable information to our management, obtain and deliver products, provide services and customer support, send invoices

and track payments, fulfill contractual obligations, accurately maintain books and records, provide accurate, timely and reliable reports

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to our normal operations.

The implementation and maintenance of the new ERP system has required, and will continue to require, the investment

The implementation and maintenance of the new ERP system have required, and will continue to require, the investment

of significant financial and human resources and the implementation may be subject to delays and cost overruns.

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operations, and customers.

Issues faced by us or our third-party “cloud” computing providers, including technological or business-related

disruptions or prolonged third-party service outages, as well as cybersecurity threats, could adversely impact our business, results

of operations and financial condition for future periods.

Issues faced by us or our third-party “cloud” computing providers, including technological or

business-related disruptions or prolonged third-party service outages, as well as cybersecurity threats, could adversely impact our business,

results of operations and financial condition for future periods.

Additionally,

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price of our common stock may be volatile and fluctuate substantially.

stock price has been, and is likely to continue to be, volatile and subject to wide fluctuations in response to various factors, some

stock price has been, and is likely to continue to be, volatile and subject to wide fluctuations in response to numerous factors, some

of which we cannot control.

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in our financial results or those of companies that are perceived to be similar to us;

conditions in the lighting, home décor and smart home sectors;

conditions in the lighting, home decor and smart home sectors;

in the financial markets in general or changes in general economic conditions;

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of securities analysts and investors.

In the event any of the foregoing occur, the market price of our common stock could be highly volatile

and may materially decline.

Further, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes

instituted securities class action litigation against the company that issued the stock.

If any of our stockholders brought a lawsuit

against us, we could incur substantial costs defending the lawsuit.

Such a lawsuit could also divert the time and attention of our management

from our business, which could significantly harm our profitability and reputation.

conversion of outstanding convertible notes or preferred stock or exercise of outstanding warrants into shares of common stock could

In the event any of the foregoing factors occur, the market price of our common stock could be

highly volatile and may materially decline.

Further, in the past, when the market price of a stock has been volatile, holders of that

stock have sometimes instituted securities class action litigation against the company that issued the stock.

If any of our stockholders

brought a lawsuit against us, we could incur substantial costs by defending the lawsuit.

Such a lawsuit could also divert the time and

attention of our management from our business, which could significantly harm our profitability and reputation.

conversion of outstanding convertible notes or preferred stock into shares of common stock could

materially dilute our stockholders.

of March 13, 2025, we had $15.6 million aggregate principal amount of convertible notes outstanding, convertible into shares of our

common stock at a conversion price ranging from $2.70 to $15.00 per share;

200,000 shares of Series A Preferred Stock, no par value (“Series

A Preferred Stock”) outstanding, which has an original issue price of $25.00 per share and is convertible into shares of common

stock at a conversion price of $2.00 per share;

260,000 shares of Series A-1 Preferred Stock, no par value (“Series A-1 Preferred

Stock”) outstanding, which has an original issue price of $25.00 per share and is convertible into shares of common stock at a

conversion price of $2.00 per share;

and warrants to purchase 1,523,667 shares of our common stock outstanding at a n exercise price

ranging from $2.70 to $18.00 per share.

The effective conversion price of the notes or preferred stock or exercise price of the warrants

may be less than the market price of our common stock at the time of conversion or exercise and may be subject to future adjustment due

to certain events, including our issuance of common stock or common stock equivalents at an effective price per share lower than the

conversion rate or exercise rate then in effect.

If the entire principal amount of all the outstanding convertible notes is converted

into shares of common stock, we would be required to issue an aggregate of no less than approximately 6,063,890 shares of common stock.

If all the outstanding warrants are exercised for shares of common stock, we would be required to issue an aggregate of 1,523,667 shares

of common stock.

If all of the Series A Preferred Stock and Series A-1 Preferred Stock outstanding are converted into shares of common

stock, we would be required to issue an aggregate of 2,500,000 and 3,250,000 shares of common stock, respectively.

If we issue any or

all of these shares, the ownership of our stockholders will be diluted.

of March 18, 2026, we had $18.2 million aggregate principal amount of convertible notes outstanding, convertible into shares of our common

stock at a weighted average conversion rate of $1.28 and $13.8 million invested in our shares of Preferred Series A, A-1 and A-2, convertible

at a weighted average rate of $1.25 per share.

effective conversion price of the notes or preferred stock or exercise price of the warrants may be less than the market price of our

common stock at the time of conversion or exercise If the entire principal amount of all the outstanding convertible notes and preferred

shares is converted into shares of common stock, we would be required to issue an aggregate 25,679,364 shares of common stock.

If we issue any or all of these shares, the ownership of our stockholders will be diluted.

outstanding preferred stock has rights, preferences and privileges that will not be held by, and will be preferential to, the rights

of holders of our common stock, which could adversely affect the liquidity and financial condition of the Company, and may result in

the interests of the holders of our outstanding preferred stock differing from those of the holders of our common stock.

Series A Preferred Stock, Series A-1 Preferred Stock, and Series A-2 Preferred Stock rank on parity with each other with respect to liquidation

Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of such preferred stock will

be entitled to receive distributions out of the Company’s assets in an amount per share equal to $25.00 plus all accrued and unpaid

dividends, whether capital or surplus, before any distributions shall be made on any shares of common stock.

dividend obligations to the holders of preferred stock could limit the Company’s ability to obtain additional financing, which

could have an adverse effect on its financial condition.

The preferential rights described above could also result in divergent interests

between the holders of shares of preferred stock and the holders of our common stock.

securities analysts do not publish research or reports about our business, or if they publish negative evaluations of our stock, the

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in turn could cause our stock price to decline.

executive officers, directors, principal stockholders, and their affiliates exercise significant influence over us, which will limit

executive officers, directors, principal stockholders, and their affiliates exercise considerable influence over us, which will limit

your ability to influence corporate matters and could delay or prevent a change in corporate control.

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preferred stock has voting rights, which reduce the relative voting power of holders of our common stock.

executive officers, directors, 5% holders of our common stock and their affiliates beneficially own, in the aggregate, approximately

30.1% of our outstanding common stock, or 30.3% of our total voting power, as of March 13, 2025.

In addition, holders of our Series

A Preferred Stock and Series A-1 Preferred Stock, which includes certain of our officers, are entitled to vote, on an as-converted basis,

together with holders of our common stock on all matters submitted to a vote of the holders of our common stock.

As a result, the issuance

of such preferred stock effectively reduced the relative voting power of the holders of our common stock.

The holders of such preferred

stock have approximately 5.2% of the Company’s total voting power, including both common stock and such preferred stock, as of

March 13, 2025.

Our executive officers, directors, 5% holders of our common stock and their

affiliates beneficially own, in the aggregate, approximately 23.6% of our outstanding common stock, or 23.6% of our total voting power,

as of March 18, 2026.

In addition, holders of our Series A Preferred Stock, Series A-1 Preferred Stock and Series A-2 Preferred Stock,

which includes certain of our officers, are entitled to vote on an as-converted basis, together with holders of our common stock on all

matters submitted to a vote of the holders of our common stock.

As a result, the issuance of such preferred stock effectively reduced

the relative voting power of the holders of our common stock.

The holders of such preferred stock have approximately 7.1% of the Company’s

total voting power as of March 18, 2026.

stockholders, if they act together, will be able to influence our management and affairs and the outcome of matters submitted to our

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due to our status as a smaller reporting company may make it harder for investors to analyze the results of operations and financial

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our

stock price may be more volatile.

We cannot predict if investors will find our common stock less attractive because we may rely on these reduced reporting requirements.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock,

and our stock price may be more volatile.

and economic conditions may negatively impact on our business, financial condition and share price.

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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