Risk Factors Update Summary

• Increasing environmental regulations could have a material adverse effect on operations or financial condition.
• Increased focus on sustainability may lead to capital access challenges and investor scrutiny.
• The company incurred a net loss of $13.3 million in 2022 and $22.3 million in 2023.
• Increased risks associated with acquisitions, including potential impairment charges, integration challenges, and diversion from core business.
• Added risks related to intellectual property, cybersecurity, and compliance with evolving regulations may impact business operations.
• Climate change regulations may increase expenses, compliance costs, and harm operations.
• Risks related to product failures due to defects, potentially leading to widespread replacements and reputational damage.
• Loss of key management could hinder strategy execution and harm business success.
• Significant dependence on large customers, with top customers representing 44% of revenue in 2023, up from 17% in 2022.
• Increased focus on potential impacts of U.S. government contracting regulations, including cybersecurity requirements and audits.
• The company may continue to incur losses due to expanding sales and marketing efforts.
• Potential adverse impact from significant increases in component prices, affecting profitability and product pricing strategies.
• Future developments in environmental and climate change matters could lead to increased costs.
• The company faces risks associated with reliance on artificial intelligence and machine learning models.
• Long selling cycles and product cancellations may adversely affect business operations and financial results.
• Uncertainty in forecasting long-term customer adoption rates and demand, impacting market share and financial performance.
• Exposure to credit risk on trade receivables and supplier non-trade receivables, heightened during economic downturns.
• Reliance on limited or single-source suppliers for key components, with disruptions posing a risk to business operations.
• Enhanced disclosures on risks related to privacy, data protection, and information security requirements across jurisdictions.
• Sales through distributors expose the company to concentration, credit, and legal risks.
• Failure to manage the expansion of SaaS capabilities could adversely affect financial results.
• Need to attract and retain qualified personnel to implement strategic plan effectively.
• Failure to meet climate change regulations could result in increased costs and regulatory uncertainty.
• Potential environmental liabilities from acquired companies could impact financial condition.
• Changes in Nasdaq listing standards could impact the trading market for securities.
• Failure to comply with regulations may disrupt business, force closure, or relocation.
• Limited operating history providing SaaS solutions poses challenges in evaluating future prospects.