What changed in this filing

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Item 1A. Risk Factors

2026-05-13 compared with 2025-11-13 · 5 added, 88 removed, 7 unchanged (93% of the section changed)

2 unchanged sentences

risk factors previously disclosed in our 2025 Form 10-K, other than as set forth below.

The risks described below and those other risks included in our 2024 Form

10-K are the currently known risks facing our Company that management deems to be material to the Company.

Additional risks and uncertainties, not currently known to us or that we currently deem to be immaterial, also may materially adversely

affect our business, financial condition or future results.

We may not realize the expected benefits of our acquisition of a perpetual license to the BOHA!

source code within

the anticipated time frame or at all.

On August 5, 2025, the Company entered into a Source Code Purchase and Perpetual License Agreement (the “License Agreement”) and a related Transition

Statement of Work (together with the License Agreement, the “Source Code Transition Agreement”) with Avery Dennison Corporation (“Avery Dennison”).

Pursuant to the Source Code Transition Agreement, the Company has acquired a non-exclusive, perpetual and royalty free license to a copy of the source

code and associated documentation for the BOHA™ Control Center, BOHA™ Ops (including labeling, media, checklist and timer modules), and the BOHA™ Temp and BOHA™ Sense applications (the “Code”), subject to payment by the Company of the full purchase

price of $2.55 million.

This license allows the Company to use, modify, market, host, distribute, sublicense, copy and create derivative works of the Code for the Company’s business purposes.

The Source Code Transition Agreement involves numerous

risks, as described further below.

The transition of the Code as contemplated by the Source Code Transition Agreement may require us to incur non-recurring and other charges, increase

certain expenditures, and divert certain engineering resources and management attention to support the transition of the Code into the Company’s systems.

In addition, Avery Dennison may be unable to deliver the Code on a timely basis or at all, or may be unable to provide the transition services required

by the Source Code Transition Agreement, including its obligations under each milestone for the transition services, or there may be defects in the Code.

In any such case, if the Company is unable to use the Code, we may need to seek comparable

software from third parties or develop it internally, which could require significant time and expense.

There could also be an interruption in the Company’s services during any period, including during or after the transition period, in which the

Company has to develop a comparable capability, whether on its own or using third-party products.

There is no assurance that a comparable software is readily available from other sources, or that if available, it would be of comparable quality and

Moreover, Avery Dennison retains ownership of the Code under the Source Code Transition Agreement.

Further, there can be no assurance that the Company will be successful in making any of the anticipated enhancements to the Code, that such enhancements

will not result in defects in the Code, or that such enhancements will be well received by customers.

We currently rely on a third-party cloud service provider for hosting services with respect to the BOHA!

software, which is currently managed by Avery

During the completion of the transition services under the Source Code Transition Agreement, we anticipate entering into a new agreement with the existing third-party cloud service provider to ensure continued hosting and support.

software provider or cloud services provider were to terminate operations or otherwise be unavailable to provide hosting services, including during the transition from one hosting provider to another, the availability or usage of our software

products could be disrupted and our customers could be adversely affected.

Pursuant to the Source Code Transition Agreement, the Code, documentation and data are to be migrated into such third-party cloud hosting services that we would directly

During such transition from one hosting environment to another, the availability or usage of the BOHA!

software could be disrupted and our customers could be adversely affected.

The third-party developer also currently provides certain

product support and maintenance services to the Company’s customers.

The Company will be responsible for providing these services going forward, and there can be no assurance that the Company will have sufficient capacity to timely provide such

services in a manner satisfactory to its customers.

Any such occurrence could materially and adversely impact our reputation, business, financial condition and results of operations.

If we are unable to effectively manage these risks and uncertainties, our acquisition of the Code may not deliver the expected benefits within the

anticipated time frame, or at all, and may also introduce other material risks that could adversely affect future results of the Company.

We are currently dependent upon a manufacturer located in Thailand for the manufacturing and assembly of

substantially all of our printers and terminals, and any further or future disruption in the businesses or operations of this manufacturer or changes to our relationship with this manufacturer/increased costs of products from this manufacturer,

including as a result of political, social or economic instability, war, trade restrictions or tariffs, severe weather, changes in climate, additional public health crises and other events out of our control, could materially adversely affect our

business, financial condition and results of operations.

In an effort to maximize cost savings and operational benefits, we have outsourced substantially all of the manufacturing and assembly of our printers

and terminals to a contract manufacturer located in Thailand.

As a result, we are dependent on this manufacturer for the manufacturing of our products, and any disruption in such manufacturing or the export of products from this manufacturer to

the United States, or the cost of such manufacturing and export, may adversely affect our business, financial condition and results of operations.

Risks affecting the businesses and operations of our manufacturer in

Thailand and the cost to us of the products sourced from this manufacturer include:

political and regional strife;

labor shortages;

severe weather and natural disasters such as earthquakes, hurricanes, fires, and floods, whether as a

result of climate change or otherwise;

lengthy power outages;

increased pricing, financial instability and capacity constraints of shippers;

and concerns with or threats of public health crises, contagious diseases or health epidemics.

also exposed to risks relating to the government imposition of tariffs, which may impact the cost or availability of products or components that we purchase.

For example, on October 26 , 2025, the U.S.

government and Thai government issued a joint statement announcing a Framework for an Agreement on Reciprocal Trade, pursuant to which, among other things, the U.S.

has agreed to maintain a tariff of 19% on goods imported from Thailand, as set forth in

Executive Order 14257 issued April 2 , 2025 , as amended, with certain products eventually to be identified for a 0% tariff rate.

The Company continues to

monitor the rapidly evolving and uncertain tariff and global trade environment and the potential impact to its Consolidated Financial Statements.

We expect that these tariffs will impact certain goods that are assembled and imported from our contract manufacturer in Thailand.

Potential future changes in tariffs and trade policies by the United States on imports from Thailand (or other countries, such as China), or retaliatory trade measures in response, may result in additional costs and pricing pressures, supply chain

disruptions, volatile or unpredictable customer spending patterns and increased economic or geopolitical risk that we may not be able to offset or otherwise mitigate, any or all of which could adversely impact our business, financial condition and

results of operations.

In addition, the risk to our business posed by any disruption in manufacturing or impacts resulting from tariffs or trade policy uncertainty, such as price increases, is exacerbated by the concentration of substantially all

of our manufacturing operations in one manufacturer located in Thailand, and there can be no assurance that we will be able to successfully mitigate any such risk by making changes to our supply chain practices, sources of supply, or manufacturing

locations, or raising the prices on products subject to such tariffs and sharing these costs with our customers, which could also have significant impacts on our financial results.

If the contract manufacturer is unable to manufacture our products or continue operating its facilities, as occurred in connection with the COVID-19

pandemic, or if cost increases (as a result of tariffs or otherwise) make continued reliance on the contract manufacturer impractical, we will have limited means for the final assembly of a majority of our products until we are able to secure the

manufacturing capability at another facility, develop an alternative manufacturing facility or qualify and begin sourcing from an alternative contract manufacturer, which could be costly and time consuming and have a material adverse effect on our

operating and financial results.

We may also incur increased business continuity and reputational risks to the extent that we continue to outsource the manufacturing and assembly of our

products to foreign third-party service providers.

For example, outsourcing of manufacturing prevents us from exercising control over the assembly of certain of our products and related operations or processes, including the internal controls

associated with operations and processes conducted and the quality of our products assembled by contract manufacturers.

If we are unable to effectively manage and oversee our outsourcing strategy, we may not realize cost structure efficiencies and

our operating and financial results could be materially adversely affected.

Outsourcing also exposes us to increased risk of infringement or misappropriation of our intellectual property, to which our manufacturers have access.

manufacturer is located in Asia, there is no guarantee that our intellectual property rights will be protected or enforced to the same extent as under U.S.

federal and state laws.

Consequently, we may not be able to prevent third parties from

developing or selling products made using our technologies.

The risk described below and those other risks included in our 2025 Form 10-K are the currently known risks facing our Company that management deems to be

material to the Company.

Additional risks and uncertainties, not currently known to us or that we currently deem to be immaterial, also may materially adversely affect our business, financial condition or future results.

As of the date of this filing, there have been no material changes to the risks

described in our Annual Report on Form 10-K for the year ended December 31, 2025.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

3 unchanged sentences

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What changed 10-Q

Item 1A. Risk Factors