Our business and results of operations are subject to numerous risks, uncertainties, and other factors that you should be aware of. You should carefully review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth in Part II, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as amended, under the heading “Risk Factors”. There have been no material changes from the risk factors disclosed in our 2025 Annual Report on Form 10-K, as amended, other than as set forth below. The risks, uncertainties and other factors described in the risk factors are not the only ones facing our company. Additional risks, uncertainties and other factors not presently known to us or that we currently deem immaterial may also impair our business operations. Any of the risks, uncertainties and other factors could have a materially adverse effect on our business, financial condition, results of operations, cash flows or product market share and could cause the trading price of our common stock to decline substantially. Risks Related to our Business, Products, and Industry Adverse global and regional economic conditions have and may continue to materially adversely affect our business, results of operations and financial condition. We conduct operations internationally with sales in the Americas, Europe and the Middle East, and Asia-Pacific regions. Our manufacturing operations are primarily performed at our manufacturing facility in Thailand, and to a lesser extent, with third-party contract manufacturers in Southeast Asia. We also purchase certain products and key components from a limited number of sources that depend on the supply chain, including freight, to receive components, transport finished goods and deliver our products across the world. As a result, adverse global and regional economic conditions may materially adversely affect our business, results of operations and financial condition. Such conditions, including but not limited to geopolitical tensions, inflation, tariffs, sanctions or other trade restrictions, slower growth or recession, higher interest rates and currency fluctuations, and other conditions that may impact market volatility, consumer confidence and spending may adversely affect demand for our products and our operations. For example, armed conflicts and heightened geopolitical tensions in the Middle East, including ongoing U.S. and Israeli military operations against Iran, pose risks to the global economy and to our business, even though we do not have direct operations in the region. An escalation of military action in the Middle East could adversely affect global supply chains, including through disruptions to shipping routes and increases in transit times and freight costs for components and raw materials. During fiscal years 2025 and 2024, we were impacted by adverse macroeconomic conditions including but not limited to inflation, foreign currency fluctuations, and the slowdown of economic activity around the globe. Adverse conditions included experiencing delays and reductions in customer orders, shifting supply chain availability and component shortages. Global economic conditions have also impacted our suppliers, contract manufacturers, logistics providers, and distributors, causing increases in cost of materials and higher shipping and transportation rates, which then impacted the pricing of our products. Price increases may not successfully offset cost increases or may cause us to lose market share and, in turn, may adversely impact our operations. In fiscal year 2025, we were impacted by increases in U.S. tariffs applicable to products manufactured in Thailand, which created additional uncertainty in our supply chain and pricing environment. For additional information regarding our exposure to U.S. trade policy changes and tariffs, see the risk factor entitled “—Changes in U.S. trade policy and the impact of tariffs may have a material adverse effect on our business and results of operations” in our 2025 Annual Report on Form 10-K, as amended. More recently, adverse macroeconomic conditions have had a greater impact on our consumer-facing applications, where demand for higher-end products has softened. In particular, one of our larger consumer-facing customers accumulated significant inventory over the last three quarters and has paused new order activity for several months to align its inventory levels with current demand. Although the customer has indicated that it expects to resume ordering later this year, the timing and volume of any resumed orders are uncertain. This pause will negatively affect our third and fourth quarter results, and may affect future periods depending on when orders resume and the levels of those orders. Further softening in demand, prolonged or additional customer inventory adjustments, or reductions or delays in customer orders could materially adversely affect our revenue, results of operations and cash flows. 28 Our financial performance depends on the extent and pace of RFID and BLE market adoption and end-user adoption of our RFID and BLE products and the timing of customer deployments. Our financial performance depends on the pace, scope and depth of end-user adoption of our RFID and BLE products in multiple industries. If RFID and BLE market adoption, and adoption of our products specifically, does not meet our expectations, then our growth prospects and operating results will be adversely affected. If we are unable to meet end-user or customer volume or performance expectations, then our results of operations and business prospects may be adversely affected. In addition, given the uncertainties of the specific timing of our customer deployments, we cannot be assured that we will have appropriate inventory and capacity levels or that we will not experience inventory shortfalls or overages in the future. We seek to mitigate those risks by being deeply embedded in our customers’ design cycle, working with our chip partners on long lead time components, managing our limited capital equipment needs within a short cycle and expanding our facilities to accommodate several scenarios for growth potential. BLE inlays and labels are a newer technology and product category, which carry additional market adoption risks as these solutions have not been widely scaled across multiple industries. Many customer deployments depend on successful product development and manufacturing process development, and we cannot assure you that technical product and manufacturing process development will be completed on schedule or achieve required performance specifications and satisfy applicable customer and/or cost requirements. Development risks have and may continue to delay or prevent customer deployments and adversely affect our operating results. If end users with sizable projects change requirements or choose to delay due to market conditions or strategic prioritization or if we are not able to develop products that meet customer requirements on a cost effective basis, we have and may continue to experience significant fluctuation in revenue on a quarterly or annual basis, and we anticipate that such uncertainty and fluctuations may continue to characterize our business for the foreseeable future. In particular, we are negotiating with an existing customer on terms related to increase in costs for a BLE product under development which could impact the commercialization timeline. There can be no assurances that our negotiations will be successful. We depend on a number of suppliers and contract manufacturers for the production of our products and components, making us vulnerable to supply disruption. Our reliance on suppliers and contract manufacturers for the production of our products and components has and may continue to result in product delivery problems and delays. We have recently experienced chip allocation delays for certain products, which have delayed production and shipment of some customer orders. We may suffer a disruption if the supply of chips or other components causes us to be unable to purchase sufficient components on a timely basis. For example, the global semiconductor shortage that began in 2021 adversely impacted our ability to meet product demand in a timely fashion and had a negative impact on our revenue and operating results. Component shortages or low inventory levels can affect our ability to meet customer demand, delay production and shipments, lengthen lead times and potentially cause us to defer or lose revenue, miss opportunities, lose market share and/or damage customer relationships, also adversely affecting our business. We are currently experiencing significantly longer lead times with several of our chip suppliers and anticipate delays in certain chips in the third and fourth quarters of 2026 which could impact our results. We are also experiencing increases in prices for many of these chips. We are able to pass along these costs in certain cases, but not all. There can be no assurance that our efforts to secure adequate supply will be successful. If we are not able to get the necessary products and components on a timely basis, our business, financial condition and results of operations may be adversely affected. Risks Related to the Asset Sale Failure to complete the Asset Sale could materially and adversely affect our business, results of operations, financial condition and stock price. The closing of the Asset Sale is conditioned on the receipt of the Required Stockholder Approval, as well as the satisfaction of other closing conditions, including those referenced in the risk factor entitled “—We cannot be sure if or when the Asset Sale will be completed”. In the event the Asset Sale is not completed or is delayed for any reason, our business, results of operations, financial condition and stock price may be harmed because: •management's and our employee's attention may be diverted from our day-to-day operations as they focus on matters related to the Asset Sale; •we may lose key employees if such employees experience uncertainty about their future roles with us or Buyer and decide to pursue other opportunities; •we may lose customers or vendors, harm existing customer or vendor relationships, and new customer or vendor contracts could be delayed or reduced; •activities related to the Asset Sale and related uncertainties may lead to a loss of revenue and market position unrelated to 29 the Asset Sale that we may not be able to regain if the Asset Sale does not occur; •the failure to consummate, or delays in consummating, the Asset Sale may result in a negative impression of us with customers, potential customers or the investment community; and •our stock price may continue to fluctuate significantly based on announcements by us, Buyer or other third parties regarding the Asset Sale or our business. In addition, we have agreed to restrictions in the Purchase Agreement that limit how we conduct our business prior to the closing of the Asset Sale. Subject to certain exceptions, these restrictions require Buyer’s prior written consent before we may take certain actions, including, among other things, making certain capital expenditures, investments and acquisitions, selling, transferring or disposing of our assets, entering into material contracts outside of the ordinary course of business, amending our organizational documents and incurring indebtedness. These restrictions may not be in our best interests and may disrupt or otherwise adversely affect our business and our relationships with our customers, prevent us from pursuing otherwise attractive business opportunities, limit our ability to respond effectively to competitive pressures, industry developments and future opportunities, and otherwise harm our business, financial results and operations. The occurrence of these or other events individually or in combination could have a material adverse effect on our business, results of operations, financial condition and stock price. If the Asset Sale is not completed, the Board of Directors, in discharging its fiduciary obligations, may evaluate other strategic alternatives that may be available, which alternatives may not be as favorable to our stockholders as the Asset Sale. These may include retaining and continuing to operate the IoT Business or pursuing an alternate sale transaction that would yield reduced consideration or involve significant delays. The Board of Directors may also decide to wind down the operations of the Company. Any future sale of substantially all of the assets of the Company or other transactions may be subject to further stockholder approval. We cannot be sure if or when the Asset Sale will be completed. The consummation of the Asset Sale is subject to the satisfaction or waiver, to the extent permitted by applicable law, of various conditions, including: •the Company having obtained the Required Stockholder Approval of the Asset Sale; •the absence of any order or law enjoining, restraining, prohibiting or making illegal the consummation of the Asset Sale; •the absence of any pending or overtly threatened legal proceeding challenging or seeking to restrain or prohibit the consummation of the Asset Sale; •each party’s representations and warranties being true and correct to the applicable specified standard as of the date of the Purchase Agreement and as of the closing of the Asset Sale; •each party’s material compliance with covenants required to be performed or complied with prior to or on the closing of the Asset Sale; •delivery of the stock certificate representing the Buyer Series C Shares; •delivery of the ancillary agreements; •delivery of the Purchased Assets and the Purchased Cash (each as defined in the Purchase Agreement); and •the filing by Buyer of a charter amendment with the Secretary of State of the State of Delaware to increase the authorized number of shares of Buyer Series C Preferred Stock. We cannot guarantee that the closing conditions set forth in the Purchase Agreement will be satisfied. If either party is unable to satisfy the closing conditions in the other party’s favor or if other mutual closing conditions are not satisfied, a party will not be obligated to complete the Asset Sale. The Purchase Agreement contains provisions that could discourage a potential competing acquirer. The Purchase Agreement contains “no solicitation” provisions that restrict our ability to solicit, initiate, or knowingly encourage or knowingly facilitate third party proposals for the acquisition of 20% of our assets or 20% of our outstanding voting securities or to pursue an unsolicited offer, subject to certain limited exceptions. In addition, Buyer has an opportunity to modify or amend the terms of the Asset Sale in response to any unsolicited competing acquisition proposal before the Board of Directors may withdraw or change its recommendation with respect to the Asset Sale. Upon the termination of the Purchase Agreement to pursue an alternative transaction with respect to a Superior Proposal (as defined in the Purchase Agreement), we will be required to pay Buyer $750,000 as a termination fee. 30 These provisions could discourage a potential third-party acquirer from considering or proposing an acquisition transaction, even if it were prepared to pay a higher price than what would be received in the Asset Sale. These provisions might also result in a potential third-party acquirer proposing to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable. The Buyer preferred equity we receive in the Asset Sale is illiquid and may not generate the value we expect. In connection with the Asset Sale, we expect to receive Buyer Series C Shares with an agreed value of $50.0 million. There is currently no public market for Buyer’s equity securities, and there can be no assurance that any public market for its equity securities will develop in the future or that we will otherwise be able to monetize our investment on favorable terms, or at all. In addition, our investment in Buyer will be subject to transfer restrictions that may limit our ability to monetize the investment. Subject to limited exceptions, we, or any liquidating trust, grantor trust or similar vehicle established for our benefit and/or the benefit of our stockholders, may transfer our Buyer Series C Shares only to a transferee that is an accredited investor, is not a competitor of Buyer, subject to specified exceptions, and is reasonably acceptable to Buyer. Any transfer also must satisfy a minimum share threshold. In addition, our Buyer Series C Shares will be subject to standard market stand-off restrictions in connection with certain liquidity events We may not be able to sell the preferred equity at the time, price or valuation we desire, or at all, and the value attributed to the preferred equity in the Asset Sale may not reflect the amount we ultimately realize, if any. The value of our Buyer Series C Shares will depend on Buyer’s future performance, financial condition, liquidity, strategic decisions and ability to execute its business plan, all of which are outside of our control. In addition, because Buyer is a private company and not subject to reporting obligations applicable to public companies, our stockholders will have limited visibility into Buyer’s financial performance and prospects. Following the Asset Sale, we do not expect to provide periodic financial or operating information or other metrics regarding Buyer’s business or performance, other than information required to be disclosed in our periodic reports in connection with our accounting for our Buyer Series C Shares. If Buyer does not perform as expected, if there is not sufficient information about the Buyer available, if the value of Buyer's equity declines or if we are unable to realize liquidity from our investment, our financial condition, results of operations and the market price of our common stock could be adversely affected. We have and will continue to incur significant expenses in connection with the Asset Sale, whether or not it is consummated. We have and will continue to incur substantial expenses related to the Asset Sale, whether or not it is completed. We recorded transaction-related expenses of approximately $1.9 million through June 30, 2026, and we will incur additional costs and expenses until completion of the Asset Sale. In addition, we will incur additional financial advisory fees that are payable upon consummation of the Asset Sale. We may also be required to pay $750,000 to Buyer if we terminate the Purchase Agreement in certain circumstances. Our executive officers and directors have interests in the Asset Sale that may be different from, or in addition to, the interests of our stockholders generally. Our executive officers and members of the Board of Directors may be deemed to have interests in the Asset Sale that may be different from or in addition to those of our stockholders, generally. These interests may create potential conflicts of interest. The Board of Directors was aware of these potentially differing interests and considered them, among other matters, in evaluating and negotiating the Purchase Agreement and in reaching its decision to approve the Purchase Agreement and the transactions thereunder. We may become subject to litigation related to the Asset Sale, which may be expensive and could delay or impair our post-closing plans. We may become subject to litigation in connection with the Asset Sale. Litigation and other claims are a common occurrence in connection with transactions similar to the Asset Sale, and we face potential for litigation or other disputes that relate to the Asset Sale, including claims related to our process or disclosures and investigatory demands under Delaware law. We have received demand letters in connection with the Asset Sale. We can provide no assurance that litigation, disputes, or additional demands will not arise in the future. Any litigation or proceedings, whether successful or not, could result in significant settlement amounts, damages, fines, or other penalties, divert financial and management resources, and result in significant legal fees. Further, any such litigation could delay the closing of the Asset Sale or could have a material adverse effect on our business, financial condition, and results of operations. Following completion of the Asset Sale, we may be considered a “public shell” company under the Nasdaq listing rules, which could have negative consequences, including potential Nasdaq delisting of our common stock. Our common stock is currently listed on the Nasdaq Capital Market. We have no current plans to delist our common stock from Nasdaq. However, following completion of the Asset Sale, we may be considered a “public shell” company under the Nasdaq listing rules. Although Nasdaq evaluates whether a listed company is a public shell company based on a facts and circumstances determination, a Nasdaq-listed company with no or nominal operations and either no or nominal assets, assets consisting solely of cash and cash equivalents, or assets consisting of any amount of cash and cash equivalents and nominal other assets is generally considered to be a public shell company. Listed companies determined to be public shell companies by Nasdaq may be subject to 31 delisting proceedings or additional and more stringent listing criteria. Delisting would adversely affect the liquidity and market price of our common stock, impair our ability to pursue strategic acquisitions, reduce the types of investors that may be willing or able to invest in our common stock, result in the potential loss of confidence among investors, suppliers, customers, end users, and employees, reduce business development opportunities, and otherwise adversely affect our business. In addition, if following the Asset Sale we are determined to be a “shell company” for purposes of the federal securities laws, we would be subject to certain additional restrictions under the Securities Act of 1933, as amended, including restrictions on our ability to use Form S-8 to register securities under employee benefit plans, limitations on the availability of Rule 144 for resales of our securities, and limitations that may increase the time, expense and uncertainty associated with completing future acquisitions. If we are deemed to be an investment company under the Investment Company Act of 1940 (the “Investment Company Act”), we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to execute on our anticipated go-forward business strategy and may result in our decision to liquidate or wind-down the Company. We may need to rely on one or more statutory or regulatory provisions under the Investment Company Act in order to avoid being deemed an investment company. Investment companies are subject to extensive, restrictive and potentially adverse statutory provisions and regulations relating to, among other things, their operations, management, capital structure, indebtedness, dividends and transactions with affiliates. There is no assurance that we will not be deemed an investment company. Following the closing of the Asset Sale, we intend to pursue acquisitions of operating businesses. As discussed in the risk factor entitled “—We may not be able to identify or acquire suitable SaaS businesses on favorable terms, and acquisitions may not achieve the expected benefits”, however, we have only recently begun the process of evaluating potential acquisition targets, and there can be no assurance that we will be able to identify, negotiate or complete one or more acquisitions on acceptable terms or at all. If we are required to register as an investment company or take other actions to avoid becoming subject to the Investment Company Act, our ability to implement our anticipated go-forward business strategy could be materially impaired. If we are unable to avoid investment company status for any reason, we may instead determine to wind down our business. A wind-down could require us to dispose of assets, including our equity interest in Buyer and any SaaS businesses that we may acquire in connection with our planned Physical AI Solutions Business. These divestitures could be at prices below the price we paid or on otherwise unfavorable terms. In addition, if we were deemed to be an investment company and failed to register when required, we could, among other material adverse consequences, become subject to monetary penalties or injunctive relief, and contracts entered into during the period in which we operated as an unregistered investment company could be subject to challenge, including rescission claims. Our ability to utilize our net operating loss carryforwards and other tax attributes may be limited following completion of the Asset Sale. We have federal, state, and foreign net operating loss (“NOL”) carryforwards and other tax attributes that may be available to offset future taxable income. If the Asset Sale is completed, we may experience an “ownership change” for purposes of Section 382 of the Internal Revenue Code. If an ownership change occurs, our ability to utilize our pre-ownership change NOLs and certain other tax attributes to offset future taxable income may become subject to significant annual limitations. These limitations could substantially reduce or defer the tax benefits associated with such NOLs, and could cause a portion of them to expire unused. As a result, we may be unable to realize the full benefit of our NOLs and other tax attributes, which could adversely affect our results of operations, cash flows, and financial condition. The ultimate availability of these tax attributes will depend on various factors, including future ownership changes, any future taxable income following completion of the Asset Sale, and applicable tax laws and regulations. Our ability to utilize our net operating loss carryforwards and other tax attributes may be limited, which could result in increased tax liability. We have federal, state, and foreign net operating loss (“NOL”) carryforwards and other tax attributes that may be available to offset future taxable income. Under Sections 382 and 383 of the Internal Revenue Code, if we experience an ownership change, our ability to utilize these NOLs and other tax attributes may become subject to significant annual limitations. In general, an ownership change occurs if one or more stockholders (or groups of stockholders) that own 5% or more of our stock increase their aggregate ownership by more than 50 percentage points over a rolling three-year period. Some changes in stock ownership may result from purchases and sales by our stockholders that are outside our control. The determination of whether an ownership change has occurred and the amount of any resulting limitation is complex and depends on numerous factual and legal determinations. We expect our NOLs and other tax attributes to be important in reducing the taxable gain that may result from the Asset Sale. However, if an ownership change occurs, we may be unable to utilize a significant portion of our NOLs or other tax attributes which could cause a significant portion of those NOLs and tax attributes to expire unused. As a result, we may be unable to realize the full benefit of our NOLs and other tax attributes, which could significantly increase our cash tax obligations and materially and adversely 32 affect our results of operations, cash flows, and financial condition. The ultimate availability of these tax attributes will depend on various factors, including future equity issuances, acquisitions, redemptions, share repurchases or other changes in stock ownership (including those that may occur following completion of the Asset Sale), any future taxable income, and applicable tax laws and regulations. Risks Related to the Proposed Physical AI Solutions Business if the Asset Sale is Completed We have no operating history in our anticipated Physical AI Solutions Business, and our new business model may not be successful. Following the closing of the Asset Sale, we expect to have substantially reduced operations and to transition to a new business model focused on providing physical AI solutions through the acquisition of targeted compliance SaaS businesses in highly regulated industries that the Company believes may benefit from integration with Buyer’s physical AI platform, including the incorporation of BLE- and RFID-enabled physical data. While certain members of our Board of Directors and management team have relevant experience, we have no operating history in this business as a company. As a result, investors will have limited basis on which to evaluate our prospects in this new business. We may be unable to retain existing employees or attract new employees with the expertise necessary to operate our go-forward strategy. Our anticipated Physical AI Solutions Business is subject to all of the risks, uncertainties and difficulties frequently encountered by companies entering a new and rapidly evolving market, many of which are beyond our control. We may fail to identify attractive opportunities, acquire suitable SaaS businesses, develop a viable operating model, generate revenue, achieve profitability or create stockholder value. If we are unable to execute this business plan successfully, our business, financial condition, results of operations and prospects could be materially and adversely affected, and the value of our common stock could decline substantially. We will need to build substantial parts of our business, including strategy, processes, controls, systems, counterparties, branding and market positioning. We may not be successful in doing so. We will also need to hire employees and management with the necessary expertise to execute our new business strategy, and we may not be able to do so. Companies attempting a transition of this magnitude often encounter unforeseen costs, delays, execution issues and strategic failures. If the Physical AI Solutions Business does not develop successfully, we may fail to generate meaningful revenue, incur substantial losses, need to raise additional capital on unfavorable terms, need to wind down the Company, or pursue additional strategic alternatives. Any such outcome could materially and adversely affect our stockholders. Our plans regarding our anticipated Physical AI Solutions Business necessarily involve substantial estimates and assumptions and may become inaccurate or incomplete as circumstances evolve. Our public disclosures regarding our anticipated Physical AI Solutions Business, opportunities, risks, capital requirements, market demand, acquisition plans, monetization strategies and expected results necessarily depend on estimates, expectations and assumptions that may prove to be incomplete, inaccurate or subject to rapid change. In many cases, we may have only limited third-party information on which to base such judgments. As a result, subsequent developments may differ materially from what is described in our public filings. If investors, regulators, counterparties or other stakeholders believe that our disclosures were incomplete, insufficiently qualified, overly optimistic or otherwise misleading, we could face reputational harm, litigation, regulatory scrutiny, stock price volatility and other adverse consequences. Any such developments could materially adversely affect our business and financial condition. Following the closing of the Asset Sale, we will not have meaningful operations unless and until we complete one or more acquisitions. Unless and until we complete one or more acquisitions of targeted SaaS businesses, we will not have a meaningful operating business, our revenue will consist solely of payments for transition services to Buyer, if any, and our operating activities will be significantly reduced. Although we are actively evaluating potential acquisition opportunities and currently intend to complete a SaaS acquisition shortly after the closing of the Asset Sale, there can be no assurance that we will do so on the timeline currently expected or at all. If we are unable to identify, negotiate and complete acquisitions that satisfy our strategic, financial, technical, regulatory and operational criteria, we may be unable to establish a viable operating business following the closing of the Asset Sale. Even if we complete one or more acquisitions, there can be no assurance that the acquired businesses will generate sufficient revenue or cash flow to sustain our operations, fund our growth or support our acquisition strategy. In that event, our Board of Directors may be required to consider other strategic alternatives, including additional asset sales, a merger, business combination, liquidation, dissolution or other wind-down transaction. Any such alternative may not be available on favorable terms, or at all, and may not result in meaningful value for our stockholders. We may not be able to identify or acquire suitable SaaS businesses on favorable terms, and acquisitions may not achieve the expected benefits. 33 A key element of our expected post-closing strategy is to identify and acquire targeted compliance SaaS businesses that we believe may benefit from integration with Buyer’s physical AI platform and access to Buyer’s customer and partner network. The identification of suitable acquisition candidates is difficult, and we may not be able to complete acquisitions on favorable terms, or at all. Although we are actively evaluating potential acquisition opportunities and currently intend to complete a SaaS acquisition shortly after the closing of the Asset Sale, there can be no assurance that we will do so on the timeline currently expected or at all. With respect to any future acquisitions, we may not be able to integrate acquired businesses successfully, and we could assume unknown or contingent liabilities. Acquisitions involve significant risks, including difficulties integrating acquired businesses, technologies, products, services, operations, systems and personnel; failure to retain customers, partners, suppliers or key employees; disruption to our business; diversion of management’s time and resources from other strategic initiatives and public company obligations; and failure to achieve anticipated revenue growth, margin expansion, operational efficiencies, customer access, licensing opportunities or other expected benefits. Although we expect to conduct due diligence on potential acquisitions, we may not identify all risks or liabilities before completing a transaction. Any acquisition could also result in significant write-offs, impairment charges, the incurrence of debt or contingent liabilities, integration costs or other expenses, any of which could harm our operating results. Changes in services, sources of revenue, product strategy, customer relationships, branding or rebranding initiatives may involve substantial costs and may not be favorably received by customers or other stakeholders. We may also need to divert cash from other uses, incur indebtedness or issue equity securities in order to fund acquisitions, integration activities or the operations of acquired businesses. If the trading price of our common stock is low or volatile, we may not be able to use our common stock as consideration for acquisitions on favorable terms, or at all. In addition, our stockholders may experience substantial dilution as a result of additional securities we may issue in connection with acquisitions, and open market sales of substantial amounts of our common stock issued to stockholders of companies we acquire could depress our stock price. Because our expected post-closing strategy depends on acquisitions, any failure to develop and maintain a pipeline of attractive SaaS targets or to complete acquisitions on acceptable terms could delay or prevent us from establishing a meaningful post-closing business. We may not realize the anticipated benefits of any acquisition, including expected revenue growth, expanded customer access, competitive differentiation, licensing opportunities, synergies with Buyer’s platform or other strategic advantages. Even if these benefits are achieved, they may take longer to realize or require greater costs and resources than anticipated. If we are unable to complete and integrate acquisitions successfully, or if completed acquisitions do not perform as expected, our business, financial condition, results of operations and stock price could be materially adversely affected. We may not enter into a definitive strategic agreement with Buyer, and any failure to establish the contemplated strategic relationship could make it more difficult for us to execute our go-forward strategy. In connection with the Asset Sale, we entered into a strategic partnership framework agreement with Buyer under which the parties intend to work toward a definitive agreement to collaborate on new software opportunities that leverage Buyer’s physical AI platform. The framework agreement does not obligate either party to enter into any definitive agreement, and there can be no assurance that we and Buyer will agree on the terms of any definitive strategic agreement at the closing of the Asset Sale, on the timeline currently expected or at all. In addition, any definitive agreement that we may enter into could contain terms that differ materially from those currently contemplated by the strategic framework agreement. The commercial terms of a strategic partnership, including revenue-sharing arrangements, if any, remain subject to negotiation, and any definitive agreement, if executed, may not be on terms consistent with current expectations or may not be executed at all. If we do not enter into a definitive agreement with Buyer, or if any such agreement is delayed, more limited than expected or later terminated, our ability to execute our go-forward strategy could be adversely affected. In particular, we may have greater difficulty identifying attractive acquisition opportunities, evaluating the technical and commercial compatibility of potential targets, integrating acquired software with Buyer’s platform, or realizing the benefits that we currently expect from the strategic relationship. Although Buyer’s chief executive officer is expected to become an observer of our Board of Directors, and our Chair of the Board is expected to become an observer of Buyer’s board of directors, these observer roles may not ensure effective coordination between the companies or prevent conflicts, delays or misalignment from arising. As a result, our business prospects, financial condition, results of operations and stock price could be adversely affected. Our go-forward strategy will depend significantly on Buyer’s physical AI infrastructure and support, and any adverse change in our relationship with Buyer could impair our ability to execute that strategy. Even if we enter into a definitive strategic agreement with Buyer, our expected go-forward strategy will depend significantly on Buyer’s sensor, telemetry and physical AI infrastructure. Any adverse change in our relationship with Buyer, any limitation on our access to Buyer’s platform or infrastructure, any change in Buyer’s strategic priorities or any failure by Buyer to provide the expected level of support could materially impair our ability to execute our go-forward strategy. If we are unable to rely on Buyer’s physical AI infrastructure and support as expected, our business prospects, financial condition, results of operations and stock price could be adversely affected. 34 We may not be able to successfully integrate any acquired software with Buyer’s platform or realize the expected benefits from doing so. A central element of our expected go-forward strategy is to integrate software applications from SaaS businesses we may acquire in the future with Buyer’s physical AI data platform to enable verified physical-world data collection and related capabilities. We may not be able to execute this strategy successfully. Such integrations may not be technically feasible across all acquired platforms, may require significant engineering effort or substantial modification to operate effectively on Buyer’s platform, may not be compatible with legacy systems, may not be completed on expected timelines or budgets, or may be subject to customer, contractual, data privacy, security, regulatory or other constraints that limit our ability to complete or benefit from the integration. In addition, our strategy depends on the accurate collection and transmission of physical-world operational data. Failures in sensors, connectivity or data processing could result in inaccurate data, reduced customer confidence or contractual disputes. Even if we are able to integrate acquired software with Buyer’s platform, customers may not value or adopt the resulting offerings, or adoption may be slower than expected, and such enhancements may not result in increased revenue, improved profitability or other expected operational, strategic or financial benefits. If we are unable to successfully integrate acquired software with Buyer’s platform, or if customers do not value or adopt the resulting offerings, our business, financial condition, results of operations and stock price could be adversely affected. Following the closing of the Asset Sale, we will continue to incur significant expenses as a public company despite having nominal, if any, revenue unless and until we complete one or more acquisitions. Following the closing of the Asset Sale, we will continue to incur significant legal, accounting, administrative and other costs and expenses as a public company. Because we will have only nominal, if any, revenue following the sale of our IoT Business, these expenses will have an adverse effect on our operating results. If we are unable to generate sufficient revenue following the closing of the Asset Sale through the acquisition of one or more SaaS companies, these increased expenses as a percentage of our revenue may have an adverse effect on our ability to execute our go-forward strategy, remain listed on Nasdaq and create stockholder value. The proposed change in our corporate identity and strategic direction may create confusion, reduce credibility and harm our ability to establish the anticipated new business. Following the Asset Sale, we intend to change our corporate name and cease operating our historical IoT Business. This change in identity and strategic direction may create confusion among investors, counterparties, employees and other stakeholders regarding who we are, what business we are in and what capabilities we possess. Some market participants may question the credibility or viability of our new strategy or may be reluctant to transact business with us until we establish a track record in the new business. Any reputational challenges, uncertainty or skepticism arising from our abrupt change in business and identity could impair our ability to hire personnel, attract counterparties and create stockholder value. Our use of cash may not generate the expected benefits or returns and could limit our ability to pursue our go-forward strategy. Our Board of Directors and management has broad discretion in the use of our cash resources. We intend to use cash to support our go-forward strategy, including pursuing acquisitions, to pay public company expenses, and for share repurchases. In connection with the Asset Sale, we will also contribute $25.0 million in cash to Buyer, subject to adjustment pursuant to the Purchase Agreement. Uses of our cash following the closing may not generate the expected benefits or returns. Our Board of Directors recently increased the size of our stock repurchase program to $40 million available for repurchases, and currently intends to return up to $40 million of capital to stockholders, which may be accomplished via dividends or other distributions as well as via share repurchases. Our cash resources will also be reduced by transaction-related fees and expenses, ongoing losses and the costs of operating as a public company. If we use significant cash for acquisitions, dividends, distributions or share repurchases and our acquisition strategy is delayed or unsuccessful, we may have fewer resources available to support our post-closing business plan. Because our cash resources are expected to be a significant component of our ability to execute our strategy following the closing of the Asset Sale, any substantial reduction in those resources could impair our ability to pursue strategic opportunities and could adversely affect our business, financial condition, results of operations and stock price. Changes in our management, employee base and operating structure following the closing of the Asset Sale may adversely affect our ability to execute our go-forward strategy. Following the closing of the Asset Sale, we expect to significantly streamline our operations, and a significant number of our employees are expected to transfer to, or become employed by, Buyer. These transfers may not occur on the timeline expected or at all, employees may not accept offers from Buyer, local-law processes may create delays or uncertainty, and we may experience disruption, loss of institutional knowledge or employee attrition in connection with the transition. We expect to retain a small group of employees following the closing to support our go-forward business, including our public company, acquisition, integration and oversight functions. This limited initial operating team may constrain our ability to source 35 acquisitions, integrate acquired businesses, manage our public company obligations and operate the business simultaneously. In addition, Kirsten Newquist, our Chief Executive Officer and a member of the Board of Directors, has informed us that she intends to resign from both positions following the closing of the Asset Sale. Following the closing of the Asset Sale, our Board of Directors intends to add senior leadership with experience in SaaS and M&A integration. We may not be able to retain or attract personnel with the experience necessary to identify, acquire, integrate and operate SaaS businesses, manage our public company obligations or manage our post-closing relationship with Buyer. The loss of employees, changes in management responsibilities, limitations on our ability to coordinate with Buyer, or uncertainty regarding our post-closing operating structure could disrupt our business, divert management’s attention and impair our ability to execute our acquisition strategy. If we are unable to establish an effective post-closing management team and operating structure, our ability to implement our go-forward strategy could be adversely affected, which could adversely affect our business, financial condition, results of operations and stock price. Investors may have difficulty evaluating our future prospects because, after the Asset Sale, we intend to continue as a public company with a new business strategy and no historical information relevant to that business strategy. Following the Asset Sale, investors will have no historical financial information relevant to our anticipated Physical AI Solutions Business. Accordingly, historical results will not be indicative of future performance, and investors may find it difficult to evaluate our prospects, strategy, valuation and risks. This limited visibility may contribute to volatility in the price of our common stock, reduce analyst coverage and impair investor confidence. If investors are unable to assess our future prospects accurately, the market price of our common stock could be materially adversely affected. We may need to establish new systems, policies, procedures and internal controls and failures in doing so could harm us. The Physical AI Solutions Business will likely require new or significantly revised systems, processes and controls, including acquisition, deployment, valuation, revenue recognition, compliance, insurance, cybersecurity, maintenance, and financial reporting and disclosure controls. We may not be able to develop and implement such systems and controls effectively or on a timely basis. If we fail to establish adequate systems, policies, procedures and internal controls, we may experience operational inefficiencies, financial reporting errors or delays, control deficiencies, asset losses, compliance failures, litigation exposure and reputational harm. Any such failures could materially and adversely affect our business, results of operations, financial condition and ability to satisfy public company obligations.