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Item 1A. Risk Factors

2026-03-30 compared with 2025-03-31 · 392 added, 434 removed, 485 unchanged (63% of the section changed)

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You should carefully consider these risk factors, together with all of the other information included in this Annual Report on Form 10-K as well as our other publicly available filings with the SEC.

Risks Related to Our Growth

If our business does not grow as we expect, or if we fail to manage our growth effectively, our operating results and business prospects would suffer.

Our ability to successfully grow our business depends on a number of factors including our ability to:

• accelerate our acquisition of new customers;

• further sell expansions of coverage areas to our existing customers;

• expand our international footprint;

• expand into new vertical markets, such as precision policing, and security solutions;

• increase awareness of the benefits that our solutions offer;

• maintain our competitive and technology leadership position;

• manage our business successfully through macroeconomic pressures, such as the imposition of tariffs, inflation, rising interest rates, and past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, and any resulting impact on economic conditions, including conditions impacting the availability of funding for our public safety solutions.

As usage of our solutions grows, we will need to continue to make investments to develop and implement new or updated solutions, technologies, security features and cloud-based infrastructure operations.

In addition, we will need to appropriately scale our internal business systems and our services organization, including the suppliers of our detection equipment and customer support services, to serve our growing customer base.

Any failure of, or delay in, these efforts could impair the performance of our solutions and reduce customer satisfaction.

Further, our growth could increase quickly and place a strain on our managerial, operational, financial and other resources, and our future operating results depend to a large extent on our ability to successfully manage our anticipated expansion and growth.

To manage our growth successfully, we will need to continue to invest in sales and marketing, research and development, and general and administrative functions and other areas.

We are likely to recognize the costs associated with these investments earlier than receiving some of the anticipated benefits, and the return on these investments may be lower, or may develop more slowly, than we expect, which could adversely affect our operating results.

If we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities or develop new solutions or upgrades to our existing solutions, satisfy customer requirements, maintain the quality and security of our solutions or execute on our business plan, any of which could have a material adverse effect on our business, operating results and financial condition.

Risks Related to Our Business and Operations

Our success depends on maintaining and increasing our sales, which depends in part on factors we cannot control, including the availability of funding to our customers.

To date, substantially all of our revenues have been derived from contracts with local governments and their agencies, in particular the police departments of major cities in the United States.

To a lesser extent, we also generate revenues from federal agencies, foreign governments and higher education institutions.

We believe that the success and growth of our business will continue to depend on our ability to maintain existing contracts with government agencies and to add new police departments and other government agencies, domestically and internationally, as customers of our public safety solutions and new universities, corporate campuses, hospitals, casinos and key infrastructure and transportation centers as customers of our security solutions.

In order to maintain and add customers, we must protect our brand and reputation, including as a result of negative publicity, and address any public concerns

or perceptions regarding privacy and surveillance.

See “Real or perceived false positive gunshot alerts or false positive security threat detection, or failure or perceived failure to generate alerts for actual gunfire or missed weapon detection could adversely affect our customers and their operations, damage our brand and reputation and adversely affect our growth prospects and results of operations,” “The nature of our business may result in undesirable press coverage or other negative publicity, which could adversely affect our growth prospects and results of operations,” and “Concerns regarding privacy and government-sponsored surveillance may deter customers from purchasing our solutions.”

In addition, many of our target customers have restricted budgets, such that we are forced to compete with programs or solutions that offer an alternative use of the same funds.

Many factors outside of our control could cause current and/or potential customers to delay or refrain from purchasing our solutions, prevent expansion of, or reduce coverage areas and/or terminate use of our solutions, including:

• decreases or changes in available funding, tax revenues, budgetary allocations, government grants and other government funding programs;

• potential delays or changes in appropriations or other funding authorization processes;

• changes in fiscal or contracting policies;

• macro- and/or local economic changes, such as the imposition of tariffs, inflation, rising interest rates and bank failures, that may affect customer funding;

• changes in elected or appointed officials.

Many of our customers rely to some extent on funds from the U.S.

federal government in order to purchase and pay for our solutions.

Any reduction in federal funding for local law enforcement efforts could result in our customers having less access to funds required to continue, renew, expand or pay for our solutions.

Social unrest, protests against racial inequality and protests against police brutality have increased in past years.

In addition, four members of Congress previously requested the Inspector General of the Department of Homeland Security to investigate the appropriateness of the use of federal funds to purchase our ShotSpotter solution.

Furthermore, the New York Comptroller previously issued a report with certain conclusions questioning the accuracy and value of our ShotSpotter solution, that we disputed in a formal reply on the basis that they were misinformed and did not give adequate weight to the New York Police Department’s views.

Changes in the availability of federal funding, such as under American Rescue Plan Act of 2021 (“ARPA”) or due to policies implemented by federal agencies under the Trump administration, may lead to changes in the operations of federal agencies, which may adversely impact our business and operating results.

These events may directly or indirectly affect municipal and police agency budgets, including federal funding available to current and potential customers.

If federal funding is reduced or eliminated and our customers cannot find alternative sources of funding to purchase our solutions, our business will be harmed.

The occurrence of any of the foregoing would impede or delay our ability to maintain or increase the amount of revenues derived from these customers, which could have a material adverse effect on our business, operating results and financial condition.

Our quarterly results of operations may fluctuate significantly due to a wide range of factors, which makes our future results difficult to predict.

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• the introduction of products or services that may compete with us for the limited funds available to our customers, and changes in the cost of such products or services;

• changes in our customers’ and potential customers’ budgets;

• changes in our customers';

and potential customers' budgets;

• our ability to control costs, including our operating expenses;

• our ability to hire, train and maintain our direct sales force;

• the timing of satisfying revenues recognition criteria in connection with initial deployment and renewals;

• the timing of satisfying revenue recognition criteria in connection with initial deployment and renewals;

• fluctuations in our effective tax rate;

• the concentration of our revenue in a small number of large contracts with the potential for fluctuations and delays;

• general economic factors, such as the imposition of tariffs, inflation, rising interest rates, past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, and political conditions, both domestically and internationally.

For example, with regard to the concentration of our revenue, for the year ended December 31, 2024, the City of New York and the City of Chicago as our two largest customers accounted for 23% and 10% of the Company’s total revenues, respectively.

Our contract with the City of Chicago ended in November 2024 and we renewed our two contracts with the City of New York in the first quarter of 2025.

The ending of our contract with the City of Chicago and any inability to renew or delays in renewal of our contract with the City of New York or any of the other factors above or other factors discussed elsewhere in this report will result in fluctuations in our revenues and operating results, meaning that quarter-to-quarter comparisons of our revenues, results of operations and cash flows may not necessarily be indicative of our future performance.

• general economic factors, such as the imposition of tariffs, inflation, rising interest rates, bank failures, and political conditions, both domestically and internationally.

For example, our revenues with respect to certain customers have varied significantly during recent years.

The City of Chicago did not renew our contract in November 2024.

The City of Chicago was our second largest customer by revenue in 2023 and 2024.

As a result, the significance of our largest customer by revenue, the City of New York, increased from 23% of our revenue for 2024 to 29% of our revenue for 2025.

Any inability to renew or delays in renewal of our contract with the City of New York in the future or any of the other factors above or other factors discussed elsewhere in this report will result in fluctuations in our revenues and operating results, meaning that quarter-to-quarter comparisons of our revenues, results of operations and cash flows may not necessarily be indicative of our future performance.

Because of the fluctuations described above, our ability to forecast revenues is limited and we may not be able to accurately predict our future revenues or results of operations.

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Consequently, a decline in sales, customer renewals or market acceptance of our solutions in any one quarter would not necessarily be fully reflected in the revenues in that quarter and would negatively affect our revenues and profitability in future quarters.

This ratable revenue recognition also makes it difficult for us to rapidly increase our revenues through additional sales

in any period, as revenues from new customers generally are recognized over the applicable agreement term.

This ratable revenue recognition also makes it difficult for us to rapidly increase our revenues through additional sales in any period, as revenues from new customers generally are recognized over the applicable agreement term.

Our subscription-based approach may result in uneven recognition of revenues.

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We begin recognizing revenues from a ShotSpotter sale only when all of these steps are complete and the solution is live.

As with ShotSpotter contracts, CaseBuilder, CrimeTracer, ResourceRouter and SafePointe are

typically sold on a subscription basis, each with a customized deployment plan.

For CaseBuilder, ResourceRouter and SafePointe contracts, there is a delay until we begin recognizing revenues from such contracts when the subscription service is operational and ready to go live.

For CrimeTracer, we generally invoice the first year's subscription price when the contract is fully executed.

While most of our customers elect to renew their subscription agreements following the expiration of a term, in some cases, they may not be able to obtain the proper approvals or funding to complete the renewal prior to such expiration.

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We had a net loss of $9.4 million for the year ended December 31, 2025 and as of December 31, 2025, we had an accumulated deficit of $113.7 million.

Although we posted net income in 2020 and 2022, we had a net loss in 2021 and 2023.

We are not certain whether we will be able to maintain enough revenues from sales of our solutions to sustain or increase our growth or maintain profitability in the future.

We also expect our costs to increase in future periods, which could negatively affect our future operating results if our revenues do not increase.

In particular, we expect to continue to expend substantial financial and other resources on:

• higher costs to procure the sensors required for our solutions due to inflationary pressures;

In particular, we have previously and expect to continue to expend substantial financial and other resources on:

• higher costs to procure the sensors required for our solutions due to inflationary pressures or tariffs;

• sales and marketing, including a significant expansion of our sales organization, both domestically and internationally;

• research and development related to our solutions, including investments in our engineering and technical teams;

• research and development related to our solutions, including investments in our engineering and technical teams and investments in AI;

• acquisition of complementary technologies or businesses, such as our acquisition of LEEDS, LLC, now known as Technologic, in November 2020, our acquisition of Forensic Logic in January 2022 and our acquisition of SafePointe in August 2023;

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If our revenue growth does not meet our expectations in future periods, our financial performance may be harmed, and we may not maintain profitability in the future.

We may require additional capital to fund our business and support our growth, and our inability to generate and obtain such capital on acceptable terms, or at all, could harm our business, operating results, financial condition and prospects.

We intend to continue to make substantial investments to fund our business and support our growth.

In addition, we may require additional funds to respond to business challenges, including the need to develop new features or enhance our solutions, improve our operating infrastructure or acquire or develop complementary businesses and technologies.

As a result, in addition to the revenues we generate from our business and our existing cash balances, we may need to engage in additional equity or debt financings to provide the funds required for these and other business endeavors.

If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

We may not be able to obtain such additional financing on terms favorable to us, if at all.

If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be adversely affected.

In addition, our inability to generate or obtain the financial resources needed may require us to delay, scale back, or eliminate some or all of our operations, which may have a material adverse effect on our business, operating results, financial condition and prospects.

Risks Related to Our Public Safety Business

Our success depends on maintaining and increasing our sales, which depends on factors we cannot control, including the availability of funding to our customers.

To date, substantially all of our revenues have been derived from contracts with local governments and their agencies, in particular the police departments of major cities in the United States.

To a lesser extent, we also generate revenues from federal agencies, foreign governments and higher education institutions.

We believe that the success and growth of our business will continue to depend on our ability to add new police departments and other government agencies, domestically and internationally, as customers of our public safety solutions and new universities, corporate campuses and key infrastructure and transportation centers as customers of our security solutions.

Many of our target customers have restricted budgets, such that we are forced to compete with programs or solutions that offer an alternative use of the same funds.

A number of factors could cause current and/or potential customers to delay or refrain from purchasing our solutions, prevent expansion of, or reduce coverage areas and/or terminate use of our solutions, including:

• decreases or changes in available funding, including as a result of policies implemented by Trump administration’s Department of Government Efficiency within the Office of Management and Budget (“DOGE”), tax revenues, budgetary allocations, government grants and other government funding programs;

• potential delays or changes in appropriations or other funding authorization processes;

• changes in fiscal or contracting policies;

• macro- and/or local economic changes, such as the imposition of tariffs, inflation, rising interest rates, and past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, that may affect customer funding;

• changes in elected or appointed officials;

• changes in public perception of the accuracy of our solutions and the appropriate use of our solutions by law enforcement, including as a result of negative publicity;

• changes in laws or public sentiment regarding privacy or surveillance.

For example, our contract with the City of Chicago ended in November 2024 and we were not able to renew or extend our contract.

The City of Chicago was one of our largest customers and represented 10% of our total revenues for the year ended December 31, 2024.

The past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other

macroeconomic pressures in the United States and the global economy such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, could also cause or exacerbate any of the foregoing.

Contracting with government entities can be complex, expensive, and time-consuming.

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Additionally, even once we have secured a government contract, the renewal process can be lengthy and as time-consuming as the initial sale, and we may be providing our service for months past the contract expiration date without certainty if the renewal agreement will be signed or not.

During periods of economic uncertainty resulting from the past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other macroeconomic pressures in the United States and the global economy such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, these risks are more pronounced than usual, as government entities struggle with reduced levels of resources related to implications of such global events.

Changes in the underlying regulatory conditions, political landscape or required procurement procedures that affect these types of customers could be introduced prior to the completion of our sales cycle, making it more difficult or costly to finalize a contract with a new customer or expand or renew an existing customer relationship.

For example, customers may require a competitive bidding process with extended response deadlines, review or appeal periods, or customer attention may be diverted to other government matters, postponing the consideration of the purchase of our products.

Such delays could harm our ability to provide our solutions efficiently and to grow or maintain our customer base.

If we are unable to further penetrate the public safety market, our revenues may not grow.

Our ability to increase revenues will depend in large part on our ability to sell our current and future public safety solutions.

For example, our ability to have our ShotSpotter customers renew their annual subscriptions and expand their mileage coverage or purchase and implement our other products, such as CaseBuilder and ResourceRouter, drives our ability to increase our revenues.

Most of our ShotSpotter customers begin using our solution in a limited coverage area.

Our experience has been, and we expect will continue to be, that after the initial implementation of our solutions, our new customers typically renew their annual subscriptions, and many also choose to expand their coverage area.

However, some customers may choose to not renew or reduce their coverage, including as a negative reaction to price increases.

If existing customers do not choose to renew or expand their coverage areas, or choose to reduce their coverage, our revenues will not grow as we anticipate, or may even decline.

During periods of economic uncertainty resulting from past and potential future disruptions in access to bank deposits and lending

commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other macroeconomic pressures in the United States and the global economy, such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, this risk is more pronounced than usual, as our customers’ priorities may change or they may have greater uncertainty regarding the availability of funding for our solutions as a result.

Our ability to further penetrate the market for our public safety solutions depends on several factors, including:

maintaining a high level of customer satisfaction and a strong reputation among law enforcement;

increasing the awareness of our SoundThinking solutions and their benefits;

the effectiveness of our marketing programs;

the availability of funding to our customers;

geopolitical developments and other macroeconomic pressures as described above;

our ability to expand our solutions;

and the costs of our solutions.

Some potential public safety customers may be reluctant or unwilling to use our solution for a number of reasons, including concerns about additional costs or increased prices, unwillingness to expose or lack of concern regarding the extent of gun violence in their community, uncertainty regarding the reliability and security of cloud-based offerings or lack of awareness of the benefits of our public safety solutions.

If we are unsuccessful in expanding the coverage of SoundThinking solutions by existing public safety customers or adding new customers, our revenues and growth prospects would suffer.

We are experiencing a delayed contract renewal with Puerto Rico which, contrary to our prior dealings with them, has a new requirement of issuing a formal request for proposal process in order to renew an agreement.

This delay and other such delays could harm our ability to provide our solutions efficiently and to grow or maintain our customer base.

Our sales cycle can be lengthy, time-consuming and costly, and our inability to successfully complete sales could harm our business.

Our sales process involves educating prospective customers and existing customers about the use, technical capabilities and benefits of our solutions.

Prospective customers, especially government agencies, often undertake a prolonged evaluation process that may last up to nine months or more and that typically involves comparing the benefits of our solutions to alternative uses of funds.

Prospective customers, especially government agencies, often undertake a prolonged evaluation process that may last up to nine months or more, with an even longer process for international customers, and that typically involves comparing the benefits of our solutions to alternative uses of funds.

We may spend substantial time, effort and money on our sales and marketing efforts without any assurance that our efforts will produce any sales.

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If we are unable to succeed in closing sales with new and existing customers, our business, operating results and financial condition will be harmed.

During periods of economic uncertainty resulting from the past and potential future disruptions in access to bank capital and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other macroeconomic pressures in the United States and the global economy, such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, this risk is more pronounced than usual, as our customers’ priorities may change or they may have greater uncertainty regarding the availability of funding for our solutions as a result.

Changes in the availability of federal funding to support local law enforcement efforts could impact our business.

Many of our customers rely to some extent on funds from the U.S.

federal government in order to purchase and pay for our solutions.

Any reduction in federal funding for local law enforcement efforts could result in our customers having less access to funds required to continue, renew, expand or pay for our solutions.

Social unrest, protests against racial inequality, protests against police brutality and movements such as “Defund the Police” have increased in past years.

Furthermore, the New York Comptroller previously issued a report with certain conclusions questioning the accuracy and value of our ShotSpotter solution, which that we disputed in a formal reply on the basis that they were misinformed and did not give adequate weight to the New York Police Department’s views.

Additionally, funds under the American Rescue Plan Act (“ARPA”), which is a federal stimulus bill that included emergency funding for state, local, territorial and tribal governments to aid public health and economic recovery from the COVID-19 pandemic, are nearing their limit.

Changes in the availability of federal funding, such as under ARPA or due to policies implemented by DOGE, may lead to changes in the operations of federal agencies, which may adversely impact our business and operating results.

These events may directly or indirectly affect municipal and police agency budgets, including federal funding available to current and potential customers.

If federal funding is reduced or eliminated and our customers cannot find alternative sources of funding to purchase our solutions, our business will be harmed.

For example, we are working on a delayed contract renewal with Puerto Rico which, contrary to our prior dealings with them, has a new requirement of issuing a formal request for proposal process in order to renew an agreement.

During periods of economic uncertainty resulting from the past and potential future disruptions in access to bank

capital and lending commitments due to bank failures, geopolitical developments such as the conflicts between Ukraine and Russia and in the Middle East, and other macroeconomic pressures in the United States and the global economy, such as the imposition of tariffs, rising inflation and interest rates, supply chain constraints, labor market shortages, energy prices and recession fears, and any associated impact on economic conditions, this risk is more pronounced than usual, as our customers’ priorities may change or they may have greater uncertainty regarding the availability of funding for our solutions as a result.

Real or perceived false positive gunshot alerts or false positive security threat detection, or failure or perceived failure to generate alerts for actual gunfire or missed weapon detection could adversely affect our customers and their operations, damage our brand and reputation and adversely affect our growth prospects and results of operations.

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The perception of a false positive alert or of a failure to generate an alert or missed weapon detection, even where our customers understand that our solutions were utilized correctly, could lead to negative publicity or harm the public perception of our solutions, which could harm our reputation and adversely impact our business and operating results.

Concerns regarding privacy and government-sponsored surveillance may deter customers from purchasing our solutions.

Governmental agencies and private citizens have become increasingly sensitive to real or perceived government or third-party surveillance and may wrongly believe that our outdoor sensors allow customers to listen to private conversations and monitor private citizen activity.

Our sensors are not designed for “live listening” and are triggered only by loud impulsive sounds that may likely be gunfire.

However, perceived privacy concerns may result in negative media coverage and efforts by private citizens to persuade municipalities, educational institutions or other potential customers not to purchase our precision policing solutions for their communities, campuses or facilities.

In addition, laws may exist or be enacted to address such concerns that could impact our ability to deploy our solutions.

For example, the City of Toronto, Canada decided against using SoundThinking solutions because the Ministry of the Attorney General of Ontario indicated that it may compromise Section 8 of Canada’s Charter of Rights and Freedoms, which relates to unreasonable search and seizure.

If customers choose not to purchase our solutions due to privacy or surveillance concerns, then the market for our solutions may develop more slowly than we expect, or it may not achieve the growth potential we expect, any of which would adversely affect our business and financial results.

The nature of our business may result in undesirable press coverage or other negative publicity, which could adversely affect our growth prospects and results of operations.

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Our reputation and our business may be harmed by inaccurate reporting, which could have an adverse impact on new sales or renewals or expansions of coverage areas by existing customers, which would adversely impact our financial results and future prospects.

For example, in July 2021, VICE Media, LLC (“VICE”) falsely accused us of illegal behavior, which has had a material adverse effect on our business.

We initiated a defamation lawsuit against VICE that has since been dismissed.

The role of our solutions and our personnel in criminal prosecutions or other court proceedings may result in unfavorable judicial rulings that generate negative publicity or otherwise adversely impact new sales or renewals or expansions of coverage areas by existing customers, which would adversely impact our financial results and future prospects.

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Economic uncertainties or downturns could adversely affect our business and operating results.

Negative conditions in the general economy both in the United States and abroad, including past and potential future disruptions in access to bank deposits and lending commitments due to bank failures, conditions resulting from changes in gross domestic product growth, labor market shortages, the imposition of tariffs, inflation, interest rates, financial and credit market fluctuations, political deadlock, natural catastrophes, warfare, geopolitical tensions, such as the ongoing conflicts between Russia and Ukraine and in the Middle East, terrorist attacks, climate change and global pandemics, could cause a decrease in funds available to our existing and potential customers and negatively affect the rate of growth of our business.

Changes in the availability of federal funding, such as under ARPA, and the leadership of federal agencies under the Trump administration, including return-to-office policy, hiring freeze, layoffs, and other policies implemented by DOGE, may lead to changes in the operations of federal agencies, which may adversely impact our business and operating results.

Negative conditions in the general economy both in the United States and abroad, including conditions resulting from changes in gross domestic product growth, labor market shortages, the imposition of tariffs, inflation, interest rates, financial and credit market fluctuations, political deadlock, natural catastrophes, warfare, geopolitical tensions, terrorist attacks, climate change and global pandemics, could cause a decrease in funds available to our existing and potential customers and negatively affect the rate of growth of our business.

Changes in the availability of federal funding, such as under ARPA, and the leadership of federal agencies under the Trump administration, including return-to-office policy, hiring freeze, layoffs, and other policies implemented federal agencies under the Trump Administration, may lead to changes in the operations of federal agencies, which may adversely impact our business and operating results.

These economic conditions may make it extremely difficult for our customers and us to forecast and plan future budgetary decisions or business activities accurately, and they could cause our customers to reevaluate their decisions to purchase our solutions, which could delay and lengthen our sales cycles or result in cancellations of planned purchases.

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If the economic conditions of the general economy or industries in which we operate worsen from present levels, or if past political changes result in less funding being available to purchase our solutions, our business, operating results, financial condition and cash flows could be adversely affected.

New competitors may enter the market for our public safety solutions.

If cities and other government entities increase their efforts to reduce gun violence or our solutions gain visibility in the market, companies could decide to enter into the public safety solutions market and thereby increase the competition we face.

In addition to other gunshot detection products, vehicle and plate identification and weapons detection, we also compete with other technologies and solutions targeting our public safety customers’ resources for law enforcement, security teams and crime prevention.

Our competitors could benefit from the disclosure of our data or information concerning our techniques and processes due to legal or other obligations (for example, as a result of public-records requests or subpoenas to provide information or to testify in court).

Because there are several possible uses for these limited budgetary resources, if we are not able to compete successfully for these limited resources, our business may not grow as we expect, which could adversely impact our revenues and operating results.

Concerns regarding privacy and government-sponsored surveillance may deter customers from purchasing our solutions.

Our sensors are not designed for “live listening” and are triggered only by loud impulsive sounds that may likely be gunfire.

laws may exist or be enacted to address such concerns that could impact our ability to deploy our solutions.

Ongoing social unrest may have a material adverse effect on our business, the future magnitude or duration of which we cannot predict with accuracy.

We may be adversely affected by ongoing social unrest, protests against racial inequality, protests against police brutality and movements such as “Defund the Police” or increases in such unrest that may occur in the future, and such unrest may be exacerbated by inaccurate information or negative publicity regarding our solutions.

We may be adversely affected by ongoing social unrest, protests against racial inequality and protests against police brutality or increases in such unrest that may occur in the future, and such unrest may be exacerbated by inaccurate information or negative publicity regarding our solutions.

These events may directly or indirectly affect police agency budgets and funding available to current and potential customers.

Participants in these events may also attempt to create the perception that our solutions are contributing to the “problem” which may adversely affect us, our business and results of operations, including our revenues, earnings and cash flows from operations.

Strategic and Operational Risks

If we are unable to sell our solutions into new markets, or cross-sell our other solutions to our existing customers, our revenues may not grow.

Part of our growth strategy depends on our ability to increase sales of our security and public safety solutions in markets outside of the United States.

and to increase sales of our other solutions to our existing ShotSpotter customers.

We are focused on expanding the sales of these solutions into new markets, but customers in these new markets may not be receptive or sales may be delayed beyond our expectations, causing our revenue growth and growth prospects to suffer.

We are also trying to increase our cross-selling efforts targeted at our existing customers, for example by encouraging our existing ShotSpotter customers to implement our other solutions such as CaseBuilder and ResourceRouter but there is no assurance that our existing customers will be receptive to our other solutions.

Our ability to successfully face these challenges depends on several factors, including increasing the awareness of our solutions and their benefits;

the effectiveness of our marketing programs;

the costs of our solutions;

our ability to attract, retain and effectively train sales and marketing personnel;

and our ability to develop relationships with communication carriers and other partners.

If we are unsuccessful in developing and marketing our solutions into new markets, or growing our revenues from our existing customers through cross-selling, new markets for our solutions might not develop or might develop more slowly than we expect, or we may not be able to expand our relationships with our existing customers, all of which would harm our revenues and growth prospects.

The failure of our solutions to meet our customers’ expectations or of our solutions generally could, in some cases, result in injury or loss of life, and could harm our reputation, which may have a material adverse effect on our business, operating results and financial condition.

Promoting and demonstrating the utility of our solutions as useful, reliable and important tools for law enforcement and security personnel is critical to the success of our business.

Our ability to secure customer renewals, expand existing customer coverage areas, and enter into new customer contracts is dependent on our reputation and our ability to deliver our solutions effectively.

Our ability to secure customer renewals, expand existing customer coverage areas, and enter into new customer contracts is dependent on our reputation and

our ability to deliver our solutions effectively.

We believe that our reputation among police departments using SoundThinking solutions is particularly important to our success.

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If our products fail to detect security threats for any reason, including failures due to customer personnel or security processes, it may also result in significant costs, the attention of our key personnel could be diverted, our customers may delay or withhold payment to us or elect not to renew or cause other significant customer relations problems to arise.

Interruptions or performance problems associated with our technology and infrastructure may adversely affect our business and results of operations.

We have in the past experienced, and may in the future experience, performance issues due to a variety of factors, including infrastructure changes, human or software errors, intentional or accidental damage to our technology (including sensors and cameras), website or third-party hosting disruptions or capacity constraints due to a number of potential causes including technical failures, natural disasters or security attacks.

If our security is compromised, our platform is unavailable or our users are unable to receive our alerts or otherwise communicate with our IRC reviewers, within a reasonable amount of time or at all, our business could be negatively affected.

In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time.

In addition, our IRC department personnel operate either in a hybrid work model or out of our offices.

Any interruption or delay in service from our IRC, such as from a communications or power outage, could limit our ability to deliver our solutions.

In addition, it may become increasingly difficult to maintain and improve the performance of our solutions, especially during peak usage times as the capacity of our IRC operations reaches its limits.

If there is an interruption or delay in service from our IRC operations and a gunshot is detected but not reviewed in the allotted time, our software will flag the incident for off-line review.

This may result in delayed notifications to our customers and as a result, we could experience a decline in customer satisfaction with our solutions and our reputation and growth prospects could be harmed.

We expect to continue to make significant investments to maintain and improve the performance of our solutions.

To the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology to accommodate actual and anticipated changes in technology, our business, operating results and financial condition may be adversely affected.

We rely on wireless carriers to provide access to wireless networks through which our acoustic sensors communicate with our cloud-based backend and with which we provide our notification services to customers, and any interruption of such access would impair our business.

We rely on wireless carriers, mainly AT&T and Verizon, to provide access to wireless networks for machine-to-machine data transmissions, which are an integral part of our services.

Our wireless carriers may suspend wireless service to expand, maintain or improve their networks.

These wireless carriers perform routine maintenance and periodic software and firmware updates that may damage our sensors or make them inoperable.

Any suspension or other interruption of services would adversely affect our ability to provide our services to our customers and may adversely affect our reputation.

In addition, the terms of our agreements with these wireless carriers provide that either party can cancel or terminate the agreement for convenience.

If one of our wireless carriers were to terminate its agreement with us, we would need to source a different wireless carrier and/or modify our equipment during the notice period in order to minimize disruption in the performance of our solutions.

Price increases or termination by our wireless carriers or changes to existing contract terms could have a material adverse effect on our business, operating results and financial condition.

Furthermore, our reliance on wireless carriers may require updates to our technology and making such updates could also result in interruptions in our service or increase our costs of operations.

We may not be able to successfully implement new technologies or adapt existing technologies to changing market demands.

If we are unable to adapt timely to changing technologies, market conditions or customer preferences, our business, operating results and financial condition could be materially and adversely affected.

Natural disasters, infectious disease outbreaks, power outages or other events impacting us or our customers could harm our operating results and financial condition.

We rely on the cooperation of customers and third parties to permit us to install our ShotSpotter sensors and SafePointe bollards on their facilities, and failure to obtain these rights could increase our costs or limit the effectiveness of our ShotSpotter and SafePointe solutions.

Our ShotSpotter solution requires us to deploy ShotSpotter sensors in our customer coverage areas, which typically entails the installation of approximately 15 to 25 sensors per square mile.

The ShotSpotter sensors are mounted on city facilities and third-party buildings, and occasionally on city or utility-owned light poles, and installing the sensors requires the consent of the property owners, which can be time-consuming to obtain and can delay deployment.

Generally, we do not pay a site license fee in order to install our sensors, and our contractual agreements with these facility owners provide them the right to revoke permission to use their facility with notice of generally 60 days.

Our SafePointe solution requires us to install sensors, cameras, and networking equipment on our customer’s property.

SafePointe does not pay a site license fee to install our sensors, cameras, and networking equipment and is typically paid by the customer to complete the installation.

In almost all cases, the property is owned by the customer, and no additional approvals or consents are required.

To the extent that required consents delay our ability to deploy our solutions or facility owners do not grant permission to use their facilities, revoke previously granted permissions, or require us to pay a site license fee in order to install our sensors or bollards, our business may be harmed.

If we were required to pay a site license fee in order to install sensors or bollards, our deployment expenses would increase, which would impact our gross margins.

If we cannot obtain a sufficient number of sensor or bollard mounting locations that are appropriately dispersed in a coverage

area, the effectiveness of our ShotSpotter and SafePointe solutions would be limited, and we may need to reduce the coverage area of the solution.

Natural disasters, infectious disease outbreaks, power outages and other events outside of our control may impact us or our customers and harm our operating results and financial condition.

We recognize revenue on a subscription basis as our solutions are provided to our customers over time.

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Our facilities would likely be costly to repair or replace, and any such efforts would likely require substantial time.

In addition, like many companies, at the beginning of the COVID-19 pandemic, we implemented a work from home policy.

We expect to work in a hybrid work model for the foreseeable future.

In addition, we expect to continue to work in a hybrid work model for the foreseeable future.

This policy may negatively impact productivity of our employees.

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The incurrence of debt may impact our financial position and subject us to additional financial and operating restrictions.

On September 27, 2018, we entered into a senior secured revolving credit facility with Umpqua Bank (the “Umpqua Credit Agreement”) and in November 2022, we amended the Umpqua Credit Agreement to, among other things, extend the maturity date from November 27, 2022 to October 15, 2024, increase the revolving credit commitment from $20.0 million to $25.0 million and increase the letter of credit sub-facility from $6.0 million to $7.5 million.

In February 2024, we amended the Umpqua Credit Agreement to extend the maturity date from October 15, 2024 to October 15, 2025.

As of December 31, 2024, there was $4.0 million outstanding on our line of credit.

Under the Umpqua Credit Agreement, we are subject to various negative covenants that limit, subject to certain exclusions, our ability to incur indebtedness, make loans, invest in or secure the obligations of other parties, pay or declare dividends, make distributions with respect to our securities, redeem outstanding shares of our stock, create subsidiaries, materially change the nature of our business, enter into related party transactions, engage in mergers and business combinations, the acquisition or transfer of our assets outside of the ordinary course of business, grant liens or enter into collateral relationships involving company assets or reincorporate, reorganize or dissolve the company.

We have a revolving credit facility with Columbia Bank with a revolving credit commitment of $40.0 million that matures on October 15, 2027.

As of December 31, 2025, we had $4.0 million outstanding on our line of credit.

Under the credit agreement governing our revolving credit facility with Columbia Bank, we are subject to various negative covenants that limit, subject to certain exclusions, our ability to incur indebtedness, make loans, invest in or secure the obligations of other parties, pay or declare dividends, make distributions with respect to our securities, redeem outstanding shares of our stock, create subsidiaries, materially change the nature of our business, enter into related party transactions, engage in mergers and business combinations, the acquisition or transfer of our assets outside of the ordinary course of business, grant liens or enter into collateral relationships involving company assets or reincorporate, reorganize or dissolve the company.

These covenants could adversely affect our financial health and business and future operations by, among other things:

• making it more difficult to satisfy our obligations, including under the terms of the Umpqua Credit Agreement;

• making it more difficult to satisfy our obligations, including under the terms of the Columbia Credit Agreement;

• limiting our ability to refinance our debt on terms acceptable to us or at all;

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We are also required to maintain certain financial covenants tied to our leverage, interest charges and profitability.

Our ability to meet such covenants (those negative covenants discussed in the preceding paragraph) or other restrictions can be affected by events beyond our control, and our failure to comply with the financial and other covenants would be an event of default under the Umpqua Credit Agreement.

If an event of default under the Umpqua Credit Agreement, has occurred and is continuing, the outstanding borrowings thereunder could become immediately due and payable, and we would then be required to cash collateralize any letters of credit then outstanding, and the lender could refuse to permit additional borrowings under the facility.

We have in the past obtained waivers for the financial covenant tied to our profitability, the acquisition and investment covenants related to our acquisition of SafePointe and name change covenant for failure to provide notice of our corporate name change and of the name change of LEEDS, LLC to Technologic Solutions, LLC.

If an event of default under the Columbia Credit Agreement, has occurred and is continuing, the outstanding borrowings thereunder could become immediately due and payable, and we would then be required to cash collateralize any letters of credit then outstanding, and the lender could refuse to permit additional borrowings under the facility.

We cannot assure you that we would have sufficient assets to repay those borrowings and, if we are unable to repay those amounts, the lender could proceed against the collateral granted to them to secure such indebtedness.

We have pledged substantially all of our assets as collateral, and an event of default would likely have a material adverse effect on our business.

The competitive landscape for our security solutions is evolving.

The market for security solutions for university campuses, corporate campuses and transportation and key infrastructure centers includes a number of available options, such as video surveillance and increased human security presence.

In particular, while we have seen growing interest in our security solutions, interest in the indoor gunshot detection offering was limited, and as a result, in June 2018, we made the strategic decision to cease indoor coverage as part of our service offering.

The competitive landscape for our security solutions is evolving and new competitors may enter the market for our public safety solutions.

In addition, the market for security solutions for university campuses, corporate campuses, hospitals, casinos and transportation and key infrastructure centers includes a number of available options, such as video surveillance and increased human security presence.

Because there are several possible uses of funds for security needs, we may face increased challenges in demonstrating or distinguishing the benefits of ShotSpotter for Campus and ShotSpotter for Corporate and establishing the benefits of SafePointe for hospitals or casinos as we try to expand into such markets.

If we experience declining interest in any of our offerings, we may cease offering such impacted solution in the future.

The nature of our business exposes us to inherent liability risks.

Our gunshot detection solutions are designed to communicate real-time alerts of gunfire incidents to police officers and first responders.

Similarly, our SafePointe weapons detection solution is designed to identify potential threats and alert security personnel.

Due to the nature of such applications, we are potentially exposed to greater risks of liability for employee acts or omissions or system failures than may be inherent in other businesses.

Although substantially all of our customer agreements contain provisions limiting our liability to our customers, we cannot be certain that these limitations will be enforced or that the costs of any litigation related to actual or alleged omissions or failures would not have a material adverse effect on us even if we prevail.

Further, certain of our insurance policies and the laws of some states may limit or prohibit insurance coverage for punitive or certain other types of damages or liability arising from gross negligence, or other issues, such as damages caused due to installation of our sensors on buildings owned by third parties, and we cannot assure you that we are adequately insured against the risks that we face.

If we fail to offer high-quality customer support, our business and reputation may suffer.

We offer customer support 24 hours a day, seven days a week, as well as training on best practices, forensic expertise and expert witness services.

Providing these services requires that our personnel have specific experience, knowledge and expertise, making it more difficult for us to hire qualified personnel and to scale up our support

The importance of high-quality customer support will increase as we expand our business and pursue new customers.

We may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services or scale our services if our business grows.

Increased customer demand for these services, without corresponding revenues, could increase our costs and harm our operating results.

If we do not help our customers use applications within our solutions and provide effective ongoing support, our ability to sell additional applications to, or to retain, existing customers may suffer and our reputation with existing or potential customers may be harmed.

We rely on a limited number of suppliers and contract manufacturers, and our proprietary ShotSpotter sensors are manufactured by a single contract manufacturer.

We rely on a limited number of suppliers and contract manufacturers.

In particular, we use a single manufacturer, with which we have no long-term contract and from which we purchase on a purchase-order basis, to produce our proprietary ShotSpotter sensors.

Our reliance on a sole contract manufacturer increases our risks since we do not currently have any alternative or replacement manufacturers, and we do not maintain a high volume of inventory.

In the event of an interruption in our supply from our sole contract manufacturer, we may not be able to develop alternate or secondary sources without incurring material additional costs and substantial delays.

Furthermore, these risks could materially and adversely affect our business if one of our contract manufacturers is impacted by a natural disaster or other interruption at a particular location because each of our contract manufacturers produces our products from a single location.

Although each of our contract manufacturers has alternative manufacturing locations, transferring manufacturing to another location may result in significant delays in the availability of our sensors.

Also, many standardized components used broadly in our sensors are manufactured in significant quantities in concentrated geographic regions, particularly in Greater China.

As a result, protracted regional crises, international trade measures, or issues with manufacturing facilities could lead to eventual shortages of necessary components.

It could be difficult, costly and time consuming to obtain alternative sources for these components, or to change product designs to make use of alternative components.

In addition, difficulties in transitioning from an existing supplier to a new supplier could create delays in component availability that would have a significant impact on our ability to fulfill orders for our products.

Many of the key components used to manufacture our proprietary ShotSpotter sensors also come from limited or sole sources of supply.

In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules.

Developing alternate sources of supply for these components may be time-consuming, difficult, and costly, and we or our suppliers may not be able to source these components on terms that are acceptable to us, or at all, which may undermine our ability to fill our orders in a timely manner.

For example, for our ShotSpotter sensors, it may take a significant amount of time to identify a contract manufacturer that has the capability and resources to build the sensors to our specifications.

Identifying suitable suppliers and contract manufacturers is an extensive process that requires us to become satisfied with their quality control, technical capabilities, responsiveness and service, financial stability, regulatory compliance, and labor and other ethical practices.

Accordingly, the loss of any key supplier or contract manufacturer could adversely impact our business, operating results and financial condition.

We are dependent on the continued services and performance of our senior management and other key personnel, the loss of any of whom could adversely affect our business.

Our future success depends in large part on the continued contributions of our senior management and other key personnel.

In particular, the leadership of key management personnel is critical to the successful management of our company, the development of our products, and our strategic direction.

We also depend on the contributions of key technical personnel.

We do not maintain “key person” insurance for any member of our senior management team or any of our other key employees.

Our senior management and key personnel are all employed on an at-will basis, which means that they could terminate their employment with us at any time, for any reason and without notice.

For example, on March 6, 2026, one of our executive officers, Nasim Golzadeh, notified us of her resignation as Managing Director, TechnoLogic and Executive Vice President, Investigative Solutions, effective March 31, 2026.

The loss of any of our key management personnel could significantly delay or prevent the achievement of our development and strategic objectives and adversely affect our business.

If we are unable to attract, integrate and retain additional qualified personnel, including top technical talent, our business could be adversely affected.

Our future success depends in part on our ability to identify, attract, integrate and retain highly skilled technical, managerial, sales and other personnel.

We face intense competition for qualified individuals from numerous other companies, including other software and technology companies, many of whom have greater financial and other resources than we do.

Some of these characteristics may be more appealing to high-quality candidates than those we have to offer.

In addition, new hires often require significant training and, in many cases, take significant time before they achieve full productivity.

We may incur significant costs to attract and retain qualified personnel, including significant expenditures related to salaries and benefits and compensation expenses related to equity awards, and we may lose new employees to our competitors or other companies before we realize the benefit of our investment in recruiting and training them.

Moreover, new employees, especially those who work remotely, may not be or become as productive as we expect, as we may face challenges in adequately or appropriately integrating them into our workforce and culture.

If we are unable to attract, integrate and retain suitably qualified individuals who are capable of meeting our growing technical, operational and managerial requirements, on a timely basis or at all, our business will be adversely affected.

Volatility or lack of positive performance in our stock price may also affect our ability to attract and retain our key employees.

Many of our senior management personnel and other key employees have become, or will soon become, vested in a substantial amount of stock or stock options.

Employees may be more likely to leave us if the shares they own or the shares underlying their vested options have significantly appreciated in value relative to the original purchase prices of the shares or the exercise prices of the options, or, conversely, if the exercise prices of the options that they hold are significantly above the market price of our common stock.

If we are unable to appropriately incentivize and retain our employees through equity compensation, or if we need to increase our compensation expenses in order to appropriately incentivize and retain our employees, our business, operating results and financial condition would be adversely affected.

Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations.

As of December 31, 2025, we had federal net operating loss carryforwards (“NOLs”) of approximately $57.3 million, of which $43.7 million will begin to expire in 2031, if not utilized.

The remaining net operating losses of $13.6 million can be carried forward indefinitely under the Tax Cuts and Jobs Act.

As of December 31, 2025, we also had state NOLs of approximately $45.7 million, which began expiring in 2026.

These federal and state NOLs may be available to reduce future income subject to income taxes.

In general, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income.

Past or future changes in our stock ownership, some of which are outside of our control, may have resulted or could result in an ownership change.

State NOLs generated in one state cannot be used to offset income generated in another state.

In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited.

For example, California recently imposed limits on the usability of California state NOL carryforwards and certain state tax credits in tax years beginning after 2023 and before 2027.

Such suspensions or limitations could accelerate or permanently increase state taxes owed.

Risks Related to Our Growth Strategy

If we are unable to reach additional public safety customers, expand into new markets or cross-sell our other solutions to our existing customers, our revenues may not grow.

Our ability to increase revenues will depend in large part on our ability to sell our current and future public safety solutions.

For example, our ability to have our ShotSpotter customers renew their annual subscriptions and expand their mileage coverage or purchase and implement our other products drives our ability to increase our revenues.

Most of our ShotSpotter customers begin using our solution in a limited coverage area.

However, some customers may choose to not renew or reduce their coverage.

For example, the City of Chicago, which was our largest customer by revenue in 2023 and 2024, did not renew our contract in November 2024, which reduced our revenues.

If existing customers do not choose to renew or expand their coverage areas, or choose to reduce their coverage, our revenues will not grow as we anticipate or may even decline.

Our ability to reach additional public safety customers depends on several factors, including:

maintaining a high level of customer satisfaction and a strong reputation among law enforcement;

increasing the awareness of our SoundThinking solutions and their benefits;

the effectiveness of our marketing programs;

the availability of funding to our customers;

geopolitical developments and other macroeconomic pressures;

our ability to expand our solutions into new markets;

and the costs of our solutions.

Some potential public safety customers may be reluctant or unwilling to use our solution for a number of reasons, including concerns about additional costs or increased prices, lack of concern regarding the extent of gun violence in their community, uncertainty regarding the reliability and security of cloud-based offerings or lack of awareness of the benefits of our public safety solutions.

Part of our growth strategy depends on our ability to increase sales of our security and public safety solutions in markets outside of the United States, and to increase sales of our other solutions to our existing ShotSpotter customers.

In addition, we anticipate expanding our SafePointe weapons detection solution into other verticals such as healthcare and casino gaming, including in connection with new California regulations requiring weapons detection systems in hospitals in 2027.

Customers in these new markets may not be receptive or sales may be delayed beyond our expectations.

We are also focused on increasing our cross-selling efforts to existing customers, for example by encouraging our existing ShotSpotter customers to implement our other solutions such as PlateRanger and CrimeTracer, but there is no assurance that our existing customers will be receptive to our other solutions.

If our business does not grow as we expect, or if we fail to manage our growth effectively, our operating results and business prospects would suffer.

Our ability to successfully grow our business depends on a number of factors including our ability to:

• accelerate our acquisition of new customers, including whether we are successful in winning a new contract with the City of Chicago after our recent submission of a proposal in response to a request for proposals;

• further sell expansions of coverage areas to our existing customers;

• expand our international footprint;

• expand into new vertical markets, such as precision policing, and security solutions, healthcare and casino gaming;

• expand our SafePointe products into new markets in conjunction with new regulations in California requiring weapons detection systems in hospitals in 2027;

• increase awareness of the benefits that our solutions offer;

• maintain our competitive and technology leadership position;

• manage our business successfully through macroeconomic pressures, such as the imposition of tariffs, inflation, rising interest rates, and bank failures, and any resulting impact on economic conditions, including conditions impacting the availability of funding for our public safety solutions.

If we are unable to successfully grow our business, our stock price may decrease, we may not generate sufficient cash for our operations and debt service, and we may not be able to continue to invest in our existing business.

If usage of our solutions grows, we will need to continue to make investments to develop and implement new or updated solutions, technologies, security features and cloud-based infrastructure operations.

In addition, we will

need to appropriately scale our internal business systems and our services organization, including the suppliers of our detection equipment and customer support services, to serve our growing customer base.

Conversely, if we are unable to grow our business, we may encounter fixed cost deleveraging, if we have built an infrastructure to support a larger business than we operate and we may need to scale our operations to reflect any lack of growth.

If our growth were to increase quickly, either through acquisitions or growth of the acceptance of our existing products, it could place a strain on our managerial, operational, financial and other resources, and our future operating results would depend to a large extent on our ability to successfully manage such expansion and growth.

If we anticipate and build for growth, we are likely to recognize the costs associated with these investments earlier than receiving some of the anticipated benefits, and the return on these investments may be lower, or may develop more slowly, than we expect, which could adversely affect our operating results.

For example, we have recently made significant investments in AI to enhance our public safety solutions, but we will likely not be able to receive the anticipated benefits from this investment for a period of time.

If our business does not grow as we expect or we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities or develop new solutions or upgrades to our existing solutions, satisfy customer requirements, maintain the quality and security of our solutions or execute on our business plan, any of which could have a material adverse effect on our business, operating results and financial condition.

Failure to effectively develop and expand our sales and marketing capabilities could harm our ability to increase our customer base and achieve broader market acceptance of our solutions.

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We may not achieve revenue growth from expanding our sales force if we are unable to hire, develop and retain talented sales personnel with appropriate experience, if our new sales personnel are unable to achieve desired productivity levels in a reasonable period of time or if our sales and marketing programs are not effective.

We plan to increase our presence in international markets, which exposes us to significant risks.

We currently operate in limited number of locations outside the United States.

A key component to our business strategy is to expand our international operations to increase our revenues from customers outside of the United States as part of our growth strategy.

Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks in addition to those we already face in the United States.

We may face additional challenges that may delay contract execution related to negotiating with governments in transition, the use of third-party integrations and consultants.

For example, due to governmental changes and tariff-related impacts, we have experienced a delay in our ShotSpotter deployment in Brazil.

In addition, we will need to invest time and resources in understanding the regulatory framework and political environments of our potential customers overseas in order to focus our sales efforts.

Because such regulatory and political considerations are likely to vary across jurisdictions, this effort will require additional time and attention from our sales team and could lead to a sales cycle that is longer than our typical process for sales in the United States.

We also may need to hire additional employees and otherwise invest in our international operations in order to reach new customers.

Because of our limited experience with international operations as well as developing and managing sales in international markets, our international expansion efforts may be delayed or may not be successful.

In addition, we face and will continue to face risks in doing business internationally that could adversely affect our business, including:

• the potential impact of currency exchange fluctuations;

• the need to comply with local data residency requirements;

• the availability and reliability of local data centers and internet bandwidth providers;

• longer sales cycles and lower visibility on “go live” dates, along with higher attrition or delays in renewal;

• the difficulty of staffing and managing international operations and the increased operations, travel, shipping and compliance costs associated with having customers in numerous international locations;

• potentially greater difficulty collecting accounts receivable and longer payment cycles;

• the availability and cost of coverage by wireless carriers in international markets;

• higher or more variable costs associated with wireless carriers and other service providers;

• the need to offer customer support in various languages;

• challenges in understanding and complying with local laws, regulations and customs in foreign jurisdictions, including laws regarding privacy and government surveillance;

• export controls and economic sanctions administered by the Department of Commerce Bureau of Industry and Security and the Treasury Department’s Office of Foreign Assets Control;

• compliance with various anti-bribery and anti-corruption laws such as the Foreign Corrupt Practices Act and United Kingdom Bribery Act of 2010;

• tariffs and other non-tariff barriers, such as quotas and local content rules;

• more limited protection for our intellectual property in some countries;

• adverse or uncertain tax consequences as a result of international operations;

• currency control regulations, which might restrict or prohibit our conversion of other currencies into U.S.

• restrictions on the transfer of funds;

• deterioration of political relations between the United States and other countries;

• political or social unrest, global pandemics, or economic instability in a specific country or region in which we operate, which could have an adverse impact on our operations in that location.

Also, we expect that due to costs related to our international expansion efforts and the increased cost of doing business internationally, we will incur higher costs to secure sales to international customers than the comparable costs for domestic customers.

As a result, our financial results may fluctuate as we expand our operations and customer base worldwide.

Our failure to manage any of these risks successfully could harm our international operations, and adversely affect our business, operating results and financial condition.

Our strategy includes pursuing acquisitions, and our inability to successfully integrate newly acquired technologies, assets or businesses, or our becoming subject to certain liabilities assumed or incurred with our acquisitions, may harm our financial results.

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We also may enter into relationships with other businesses to expand our platform and applications, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing or investments in other companies.

We believe that part of our continued growth will be driven by acquisitions of other companies or their technologies, assets, businesses and teams.

Acquisitions in the future that we complete will give rise to risks, including:

If we complete acquisitions in the future, those acquisitions will give rise to risks, including:

• incurring higher than anticipated capital expenditures and operating expenses;

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Fully integrating an acquired technology, asset or business into our operations may take a significant amount of time.

We may not be successful in overcoming these risks or any other problems encountered with the acquisition of and integration of Technologic, Forensic Logic and SafePointe, intellectual property assets acquired or any future acquisitions.

To the extent that we do not successfully avoid or overcome the risks or problems related to any such

acquisitions, our results of operations and financial condition could be harmed.

We may not be successful in overcoming these risks or any other problems encountered with the acquisition of and integration of our prior acquisitions or any future acquisitions.

To the extent that we do not successfully avoid or overcome the risks or problems related to any such acquisitions, our results of operations and financial condition could be harmed.

Acquisitions also could impact our financial position and capital requirements or could cause fluctuations in our quarterly and annual results of operations.

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If we issue stock or rights to purchase stock in connection with future acquisitions, net income per share and then-existing holders of our common stock may experience dilution.

The nature of our business exposes us to inherent liability risks.

Our gunshot detection solutions are designed to communicate real-time alerts of gunfire incidents to police officers and first responders.

Similarly, our weapons detection solution obtained from our SafePointe acquisition is designed to identify potential threats and alert security personnel.

Due to the nature of such applications, we are potentially exposed to greater risks of liability for employee acts or omissions or system failures than may be inherent in other businesses.

Risks Related to Our Technology