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What changed in DATA I/O CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of DATA I/O CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+170 added−117 removedSource: 10-K (2026-04-16) vs 10-K (2025-04-01)

Top changes in DATA I/O CORP's 2025 10-K

170 paragraphs added · 117 removed · 77 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

31 edited+62 added−29 removed24 unchanged
Biggest changeDevice support is a critical aspect of our business and consists of writing software algorithms for devices and developing socket adapters to hold and connect to the device for programming. 4 Table of Contents Sales Percentage of Total Sales Breakdown by Type Sales Type 2024 2023 Drivers Equipment Sales 51% 58% Capacity, Process improvement, Technology Adapter Sales 33% 29% Capacity utilization, New customer products Software and Maintenance Sales 16% 13% Installed base, Added capabilities Total 100% 100% The table below presents our main products and the key features that benefit our customers: Products Key Features Customer Benefits PSV Systems: Off-line · Fast program and verify speeds · Managed and secure programming (Automated) · · Up to 112 programming sites Up to 3000 devices per hour throughput · High throughput for high-density flash memory programming · · UFS Support Supports LumenX and FlashCORE III programmers · Flexible I/O options (tray, tape, tube), marking/labeling and vision for coplanarity inspection · · Supports multiple media types Supports quality options – fiber laser marking, ink dot marking, 2D inspection, 3D coplanarity · · Scalable solutions for low to high-volume manufacturing Access to system data for connected factory and traceability · ConneX Service Software enables connected factory integration and automation LumenX Programmer (Non-automated) · Extensible architecture for fast programming, verify and download speeds · · Managed and secure programming Fast setup and job changeover · Supports UFS memory, microcontrollers, serial flash, secure elements and other device types · · Highest yield and low total cost of programming High performance · · Large file size support Secure job creation · Create and validate designs before moving down the firmware supply chain · Eight sockets with tool-less changeover with single-socket adapters FlashPAK III programmer: (Non-automated) · · Scalability Network control via Ethernet · Create and validate designs before moving down the firmware supply chain · Stand-alone operation or PC compatible · Unmatched ease of use in manual production systems · Parallel programming · Four sockets · Universal device support SentriX Security Deployment System · Unique ability to securely provision keys and certificates one device at a time · · Create secure IoT devices across a global network Maintain IP control over their product’s lifecycle · Broad set of secure devices supported with wide range of silicon partners · Secure supply chain and flexible key management architecture · Software license model allows easy upgrades from deployed PSV data programming systems · Pay per use model 5 Table of Contents Customers/Markets We sell our solutions to customers worldwide, many of whom are world-class manufacturers of electronic devices used in a broad range of industries, as described in the following table: OEMs EMS Programming Centers Automotive Electronics IoT, Industrial, Consumer Electronics, including Wireless Contract Manufacturers Notable end customers Borg Warner, Bosch, Alps Alpine, Visteon, Kostal, JVCKenwood, Harman, Hitachi, Denso Ten, Continental, Aptiv Panasonic, Magna, Marelli, Tesla, Desay, BYD LG, TCL, Siemens, Danfoss, Philips, Schneider, Endress+Hauser, Insta, Sony, UTEC, Nokia Pegatron, Flex, Jabil, Wistron, Sanmina SCI, Foxconn, Salcomp, Calcomp, Plexus Arrow, Avnet, BTV, CPS, Semitron, NOA Leading Business drivers Infotainment, Advanced Driver Assist (ADAS), electrification, connectivity, and security Higher functionality driven by increasing electronic content.
Biggest changeOur automated systems have list selling prices ranging from approximately $150,000 to $210,000 and our manual systems have list selling prices ranging from approximately $8,000 to $11,000. 5 Table of Contents Sales Percentage of Total Sales Breakdown by Type Sales Type 2025 2024 Drivers Platform Sales 42% 51% Capacity, Process improvement, Technology Adapter Sales 37% 33% Capacity utilization, New customer products Software and Maintenance Sales 21% 16% Installed base, Added capabilities Total 100% 100% The table below presents our main products and the key features that benefit our customers: Products Key Features Customer Benefits PSV Systems: Off-line (Automated) • Fast program and verify speeds • Up to 112 programming sites • Up to 2000 devices per hour throughput • UFS Support • Supports LumenX and FlashCORE III programmers • Supports multiple media types • Supports quality options – fiber laser marking, ink dot marking, 2D inspection, 3D coplanarity • ConneX Service Software enables connected factory integration and automation and system monitoring dashboards • Managed and secure programming • High throughput for high-density flash memory programming • Flexible I/O options (tray, tape, tube), marking/labeling and vision for coplanarity inspection • Scalable solutions for low to high-volume manufacturing • Access to system data for connected factory and traceability Lumen®X Programmer (Non-automated) • Extensible architecture for fast programming, verify and download speeds • Supports UFS memory, microcontrollers, serial flash, secure elements and other device types • Large file size support • Secure job creation • Four or eight sockets configuration with tool-less changeover with single-socket adapters • Managed and secure programming • Fast setup and job changeover • Highest yield and low total cost of programming • High performance • Create and validate designs before moving down the firmware supply chain FlashPAK III programmer: (Non-automated) • Scalability • Network control via Ethernet • Stand-alone operation or PC compatible • Parallel programming • Four sockets • Universal device support • Create and validate designs before moving down the firmware supply chain • Unmatched ease of use in manual production systems 6 Table of Contents Customers/Markets We sell our solutions to customers worldwide, many of whom are world-class manufacturers of electronic devices used in a broad range of industries.
However, any claim of infringement, with or without merit, could be costly and a diversion of management’s attention, and be an adverse determination could adversely affect our reputation, potentially preclude us from offering certain products, and subject us to substantial liability. As of December 31, 2024, we were not subject to any pending actions regarding infringement claims.
However, any claim of infringement, with or without merit, could be costly and a diversion of management’s attention, and be an adverse determination could adversely affect our reputation, potentially preclude us from offering certain products, and subject us to substantial liability. As of December 31, 2025, we were not subject to any pending actions regarding infringement claims.
The size of backlog at any date is not necessarily a meaningful indicator of the trend of our business. 8 Table of Contents Research and Development We believe that continued investment in research and development is critical to our future success. We continue to develop new technologies and products and enhance existing products.
The size of backlog at any date is not necessarily a meaningful indicator of the trend of our business. 9 Table of Contents Research and Development We believe that continued investment in research and development is critical to our future success. We continue to develop new technologies and products and enhance existing products.
For the years prior to joining Data I/O, as President and owner of Wentworth Advisors, he has consulted in the programming, IT, and private equity markets, focusing on expanding deal flow, performing due diligence and Board service. Gerald Y.
For the years prior to joining Data I/O, as President and owner of Wentworth Advisors, he has consulted in the programming, IT, and private equity markets, focusing on expanding deal flow, performing due diligence and Board service.
We make foreign sales through our wholly-owned subsidiaries in Germany and China, as well as through independent distributors and sales representatives operating in 32 countries. Our independent foreign distributors purchase our products for resale and we generally recognize the sale at the time of shipment to the distributor.
We make foreign sales through our wholly-owned subsidiaries in Germany and China, as well as through independent distributors and sales representatives operating in 39 countries. Our independent foreign distributors purchase our products for resale and we generally recognize the sale at the time of shipment to the distributor.
Most orders are scheduled for delivery within 1 to 90 days after receipt of the order. Our backlog of pending orders was approximately (in millions) $3.5, $2.8 and $4.8 as of December 31, 2024, 2023 and 2022, respectively.
Most orders are scheduled for delivery within 1 to 90 days after receipt of the order. Our backlog of pending orders was approximately (in millions) $1.6, $3.5, and $2.8 as of December 31, 2025, 2024 and 2023, respectively.
Industry Background We enable companies to improve productivity, increase supply-chain security and reduce costs by providing device data programming and security deployment solutions that allow our customers to take IP (large design and data files) and protect and program it into memory, microcontroller, security and logic devices quickly and cost-effectively.
Industry Background Data I/O enables companies to improve productivity, increase supply-chain security and reduce costs by providing device data programming and security deployment solutions that allow our customers to take IP (large design and data files) and protect and program it into memory, microcontroller, security and logic devices quickly and cost-effectively.
As with U.S. sales representatives, sales made by international sales representatives are on an agency basis, with sales made directly to the customer by us. Net international sales for 2024, 2023 and 2022 were (in millions) $20.4, $25.3 and $22.4, respectively.
As with U.S. sales representatives, sales made by international sales representatives are on an agency basis, with sales made directly to the customer by us. Net international sales for 2025, 2024 and 2023 were (in millions) $20.2, $20.4, and $25.3, respectively.
Net sales in the U.S. for 2024, 2023 and 2022 were (in millions) $1.4, $2.8 and $1.8, respectively. Some of our customers’ orders delivered internationally are heavily influenced by U.S. sales-based efforts. 7 Table of Contents International Sales International sales represented approximately 94%, 90% and 93% of net sales in 2024, 2023 and 2022, respectively.
Net sales in the U.S. for 2025, 2024 and 2023 were (in millions) $1.3, $1.4, and $2.8, respectively. Some of our customers’ orders delivered internationally are heavily influenced by U.S. sales-based efforts. 8 Table of Contents International Sales International sales represented approximately 94%, 94%, and 90% of net sales in 2025, 2024 and 2023, respectively.
Employees - Human Capital As of December 31, 2024, we had a total of 95 employees, of which 45 were located outside the U.S. and 7 of which were part time. We also utilize independent contractors for specialty work, primarily in research and development, and utilize temporary workers to adjust capacity to fluctuating demand and for special projects.
Employees - Human Capital As of December 31, 2025, we had a total of 97 employees, of which 44 were located outside the U.S. and 7 of which were part time. We also utilize independent contractors for specialty work, primarily in research and development, and utilize temporary workers to adjust capacity to fluctuating demand and for special projects.
Process improvement and simplification as well as new product rollouts, memory and new technology, security New contracts from OEMs, programming solutions specified by OEMs Large algorithm device support library, contract wins, capacity utilization of their installed base of equipment, small parts handling, security Buying criteria Quality, throughput, reliability, configuration control, traceability, global support, IP protection, security Quality, reliability, configuration control, traceability, global support, IP protection, security Lowest equipment procurement cost, throughput, global support Flexibility, lowest lifecycle cost per programmed part, low changeover time; use of multiple vendors provides negotiating leverage, device support availability Security Deployment End-customer focus End-customer focus End-customer and partner focus Partner focus of our SentriX deployments Our solutions address the data programming and security deployment needs of programmable semiconductor devices.
Process improvement and simplification as well as new product rollouts, memory and new technology security New contracts from OEMs, programming solutions specified by OEMs Large algorithm device support library, contract wins, capacity utilization of their installed base of equipment, small parts handling, security Buying criteria Quality, throughput, reliability, configuration control, traceability, global support, IP protection, security Quality, reliability, configuration control, traceability, global support, IP protection, security Lowest equipment procurement cost, throughput, global support Flexibility, lowest lifecycle cost per programmed part, low changeover time; use of multiple vendors provides negotiating leverage, device support availability Security Deployment End-customer focus End-customer focus End-customer and partner focus Partner focus of our SentriX deployments Our solutions address the data programming and security deployment needs of programmable semiconductors (flash memory, microcontrollers and secure elements) at high volumes, with security, quality and traceability requirements.
Shift from analog to connected intelligent devices, security Production contract wins Value-added services, logistics, security Programming equipment drivers Growing electronic content, global support, resilient supply chains, new product rollouts, growing file sizes, quality control, traceability, and security Growing electronic content and need for IP protection.
Shift from analog to connected intelligent devices, security. Initial buildout of Edge AI impacting investment decisions. Production contract wins Value-added services, logistics, security Programming equipment drivers Growing electronic content, global support, resilient supply chains, new product rollouts, growing file sizes, quality control, traceability, and security Growing electronic content and need for IP protection.
We also provide services related to hardware support, system installation and repair, and device programming. Companies that design and manufacture products utilizing programmable electronic devices, ranging from automobiles to cell phones, purchase programming solutions from us.
We also provide services related to hardware support, system and repair, and device programming. Companies that design and manufacture products utilizing programmable electronic devices, ranging from automobiles to industrial controls to edge AI, purchase programming solutions from us.
The following represented greater than 10% of net sales for the applicable year: Percentage of Net Sales 2024 2023 2022 Number of customers 2 2 1 Approximate percentage of net sales 34 % 24 % 23 % Percentage of each 19 % 13 % 23 % Percentage of each 15 % 11 % n/a The following represented greater than 10% of our consolidated accounts receivable for the applicable years: Percentage of Consolidated Accounts Receivable 2024 2023 2022 Number of customers 2 3 3 Approximate percentage of consolidated accounts receivable balance 43 % 47 % 39 % Percentage of each 30 % 18 % 15 % Percentage of each 13 % 16 % 13 % Percentage of each - 13 % 11 % Geographic Markets and Distribution We market and sell our products through a combination of direct sales, indirect sales representatives and distributors, as well as services through programming centers.
The following represented greater than 10% of net sales for the applicable year: Percentage of Net Sales 2025 2024 2023 Number of customers 3 2 2 Approximate percentage of net sales 41 % 34 % 24 % Percentage of Customer 1 18 % 19 % 13 % Percentage of Customer 2 12 % 15 % 11 % Percentage of Customer 3 11 % - - The following represented greater than 10% of our accounts receivable: Percentage of Accounts Receivable 2025 2024 2023 Number of customers 3 2 3 Approximate percentage of AR balance 49 % 43 % 47 % Percentage of Customer 1 19 % 30 % 18 % Percentage of Customer 2 16 % 13 % 16 % Percentage of Customer 3 14 % - 13 % Geographic Markets and Distribution We market and sell our products through a combination of direct sales, indirect sales representatives and distributors, as well as services through programming centers.
Data I/O ® designs, manufactures and sells programming and security deployment systems and services for electronic device manufacturers, specifically targeting high-growth areas such as high-volume users of flash memory and flash memory-based microcontrollers.
Data I/O designs, manufactures and sells programming and security deployment systems and services for electronic device manufacturers, specifically targeting high-growth areas such as high-volume users of flash memory and flash memory-based microcontrollers. Our mission is to bring the world’s electronic devices to life.
Products To accommodate the expanding variety and quantities of programmable devices being manufactured today, we offer multiple solutions for the numerous types of device mix and volume usage by our customers in the various market segments and applications. We work closely with leading manufacturers of programmable devices to develop our products to meet the requirements of a particular device.
Products To accommodate the expanding variety and quantities of programmable devices being manufactured today, we offer multiple solutions for the numerous types of device mix and volume usage by our customers in the various market segments and applications.
As a resilient supply chain strategy, we manufacture various products in both of our production facilities. This strategy allows opportunity to mitigate some of the risks of having only one location, as well as enabling tariff and tax optimization strategies. We use a combination of standard components and fabricated parts manufactured to our specifications.
This strategy allows opportunity to mitigate some of the risks of having only one location, as well as enabling tariff and tax optimization strategies. We use a combination of standard components and fabricated parts manufactured to our specifications.
Programmable devices are used in products such as automobile electronics, smartphones, HDTV, smart meters, gaming systems and a broad category called Internet of Things (“IoT”). IoT is a broad term that addresses the interconnectivity of devices and other electronic or smart products.
Programmable devices are used in products such as automobile electronics, smartphones, HDTVs, smart meters, gaming systems and a broad category called Internet of Things (“IoT”).
Ng 63 Vice President, Chief Financial Officer, Secretary and Treasurer William Wentworth joined Data I/O as a member of the Board of Directors on May 2023 and assumed the President position on September 1,2024 and Chief Executive Officer (“CEO”) position on October 1, 2024.
Set forth below is certain information concerning the executive officers of Data I/O as of April 16, 2026: Name Age Position William Wentworth 60 President and Chief Executive Officer Charles DiBona 61 Vice President, Chief Financial Officer, Secretary and Treasurer William Wentworth joined Data I/O as a member of the Board of Directors on May 2023 and assumed the President position on September 1, 2024 and Chief Executive Officer (“CEO”) position on October 1, 2024.
Our solutions, some of which include security deployment and process control capabilities, enable us to address the demanding requirements of the electronic device market, where applications security and IP protection are essential to our customer’s success.
Our solutions, some of which include security deployment and process control capabilities, enable us to address the demanding requirements of the electronic device market, where applications security and IP protection are essential to our customer’s success. Data I/O was incorporated in the State of Washington in 1969 and its business was founded in 1972. Our website address is www.dataio.com.
Manufacturing, Raw Materials and Backlog We strive to manufacture and provide the best solutions for advanced programming. We primarily assemble and test our products at our principal facilities in Redmond, Washington and Shanghai, China. Both of these locations are ISO 9001:2015 certified. We outsource our circuit board manufacturing and fabrication.
We primarily assemble and test our products at our principal facilities in Redmond, Washington and Shanghai, China. Both of these locations are ISO 9001:2015 certified. We outsource our circuit board manufacturing and fabrication. As a resilient supply chain strategy, we manufacture various products in both of our production facilities.
In addition to this commitment, the Company has a track record of meeting its ESG regulatory obligations, being a solid corporate citizen, delivering superior value to its customers and partners, and demonstrating corporate stewardship including returning capital to shareholders through past share buybacks. 9 Table of Contents As the largest and only publicly traded company in its sector, according to our internal analysis, Data I/O has led its industry in disclosing significant operational and financial information.
In addition to this commitment, the Company has a track record of meeting its ESG regulatory obligations, being a solid corporate citizen, delivering superior value to its customers and partners, and demonstrating corporate stewardship including returning capital to shareholders through past share buybacks. 11 Table of Contents Executive Officers of the Registrant During 2025, the Company underwent a significant transition in its financial leadership.
Our research and development efforts have resulted in the release of significant new products and product enhancements over the past several years. During 2024, 2023 and 2022, we made expenditures for research and development of (in millions) $6.2, $6.5 and $6.1, respectively, representing 29%, 23% and 25% of net sales, respectively. Research and development costs are generally expensed as incurred.
During 2025, 2024 and 2023, we made expenditures for research and development of (in millions) $6.5, $6.2 and $6.5, respectively, representing 30%, 29% and 23% of net sales, respectively. Research and development costs are generally expensed as incurred.
Initiatives within these areas apply to the Company’s daily global operations as well as within its supply chains. Our facilities are subject to numerous laws and regulations concerning the discharge of materials or otherwise relating to the environment.
Our facilities are subject to numerous laws and regulations concerning the discharge of materials or otherwise relating to the environment.
Our device programming solutions currently target two high volume growing markets: automotive electronics and IoT systems, including industrial and consumer devices. 6 Table of Contents Growth drivers for automotive electronics · Consumers desire advanced car features requiring higher levels of sophistication, including autonomous cars, infotainment options (audio, radio, dashboard displays, navigation), ADAS, wireless connectivity and electrification · Proliferation of programmable microcontrollers to support the next-generation electronic car systems · Increasing use of high-density flash to provide memory for advanced applications · Increasing complexity to support autonomous vehicles · Increasing need for security solutions for a secure supply chain and lifecycle firmware integrity · Growing software size Growth drivers for IoT, including industrial, consumer electronics and wireless · Securely controlling groups of connected devices through a secure supply chain and lifecycle firmware integrity management · Adding intelligence and processing into devices · Connecting previously unconnected devices to networks and the internet (such as smart home, including intelligent thermostats and lighting) · Emergence of new devices and applications (such as health and wellness wearable devices and applications) Diversification of accounts receivable and net sales During 2024, we sold products to approximately 197 customers throughout the world.
Our device programming solutions currently target two high volume growing markets: automotive electronics and IoT, including industrial, consumer electronics and wireless. 7 Table of Contents Growth drivers for automotive electronics · Consumers desire advanced car features requiring higher levels of sophistication, including autonomous vehicle capabilities and safety assistance. · Proliferation of programmable microcontrollers to support the next-generation electronic car systems. · Increasing use of high-density flash to provide memory for advanced applications. · Increasing complexity to support autonomous vehicles. · Increasing need for security solutions for a secure supply chain and lifecycle firmware integrity. · Growing software size.
Our software products are not typically sold or licensed separately from sales of programming systems. However, when we license software separately, we recognize revenue upon the transfer of control of the software, which is generally upon shipment, provided that only inconsequential performance obligations remain on our part and substantive acceptance conditions, if any, have been met.
However, when we license software separately, we recognize revenue upon the transfer of control of the software, which is generally upon shipment, provided that only inconsequential performance obligations remain on our part and substantive acceptance conditions, if any, have been met. 10 Table of Contents Because of the rapidly changing technology in the semiconductor, electronic equipment and software industries, portions of our products might infringe upon existing patents or copyrights, and we may be required to obtain licenses or discontinue the use of infringing technology.
Under Bill's leadership, Source developed compelling programming solutions for the automotive and consumer industries, expanding the business and limiting its industry and customer concentration.
He led the sale of controlling interest of Source Electronics to HIG Capital in 2001 and the company’s subsequent sale to Avnet in 2008 with significant investor return. Under Bill’s leadership, Source developed compelling programming solutions for the automotive and consumer industries, expanding the business and limiting its industry and customer concentration.
Bill Wentworth brings a wealth of industry experience spanning over 35 years, including private equity and M&A exposure.
Bill Wentworth brings a wealth of industry experience spanning over 35 years, including private equity and M&A exposure. In 1988 he cofounded Source Electronics, the global market share leader in programming and test services, and a Data I/O customer.
In addition, new security devices may be required to be programmed using device-specific programmers developed by the semiconductor manufacturer. While we are not aware of any published industry market information covering the programming systems or security deployment market, according to our internal analysis of competitors’ revenues, we believe we continue to be the largest supplier in the programming systems market.
While we are not aware of any published industry market reports covering the programming systems or security deployment market, according to our internal analysis of competitors’ revenues, we believe we continue to be one of the largest suppliers in the programming systems market. Manufacturing, Raw Materials and Backlog We strive to manufacture and provide the best solutions for advanced programming.
Environmental, Social and Governance (“ESG”) Data I/O is committed to the responsibilities associated with modern age ESG. The Company’s key pillars for ESG support a framework for sustainable growth and include Leadership & Governance, Environment, Innovation, Human Capital, Social Capital, and Financial Excellence.
The Company’s key pillars for ESG support a framework for sustainable growth and include Leadership & Governance, Environment, Innovation, Human Capital, Social Capital, and Financial Excellence. Initiatives within these areas apply to the Company’s daily global operations as well as within its supply chains.
Trends of increasing device densities, shrinking device packages, increased demands for security, and customers increasing their software content file sizes, combined with the increasing numbers of intelligent devices such as automotive electronics and IoT applications, are driving demand for our solutions. 3 Table of Contents Traditionally, our programming market opportunity focused on the number of semiconductor devices to be programmed, but because of the rapid increase in the density of devices, and increasing demands for supply-chain security, the focus has shifted in many cases, from the number and type of devices to the number and type of bits per device to be programmed or securely provisioned.
Trends of increasing device densities, shrinking device packages, increased demands for security, and customers increasing their software content file sizes, combined with the increasing numbers of intelligent devices such as automotive electronics and IoT applications, are driving demand for our solutions. Geopolitical, economic and trade uncertainties continued to impact the Company’s markets in 2025.
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Most electronic products today incorporate a number of programmable semiconductor devices that contain data, operating instructions and security credentials essential for the proper operation of the product and more and more products require security deployment. Our mission is to bring the world’s electronic devices to life.
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Major Impacts on 2025 The year ended December 31, 2025 was defined by the Company’s strategic transformation, directed by President and CEO William Wentworth, who assumed the role in the fourth quarter of 2024.
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Our largest customers are heavy users of programmable semiconductor devices and include original equipment manufacturers (“OEMs”) and tier 1 suppliers in automotive electronics, industrial electronics, consumer electronics and IoT markets as well as their programming center partners and electronic manufacturing service (“EMS”) contract manufacturers.
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The Company’s strategic plan was designed around six priorities: modernizing our go-to-market strategy, investing in our core technology platform, strengthening customer relationships, optimizing business operations and IT infrastructure, improving operational processes, and deploying artificial intelligence across the organization.
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Data I/O was incorporated in the State of Washington in 1969 and its business was founded in 1972. Our website address is www.dataio.com .
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As we enter 2026, management believes the transformation is approximately one year ahead of the original execution timeline projected by management and that the Company believes it is well positioned to return to revenue growth and a path to positive operating cash flow.
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Major Impacts on 2024 Due to economic and automotive electronics uncertainties and slower customer capacity expansion, shipments of the Company’s automated systems in the Americas and Europe were lower which was partially offset by revenue growth in Asia.
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A central element of the strategy was the rapid refresh of the Company’s core technology platform, initiated and completed through the course of 2025. The Company launched the next-generation LumenX2 programming platform and LumenX2-M4 manual programmer at the productronica 2025 tradeshow in Munich, Germany in November 2025.
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COVID-19 impacts in past years were no longer an operational challenge with personnel staffing, inventory levels, supply chain and operational activities returning to normal levels. However, late in 2024 with the new incoming United States Administration, geo-political, economic and trade uncertainties have increased. The resulting future impact on the Company’s markets, customers, supply chain and operations are uncertain.
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The LumenX2 platform, with higher pin counts and increased power, significantly expands the breadth of device technologies supported on the LumenX architecture, including microcontrollers, eMMC, UFS, SPI NOR flash, Secure Elements, and other device types. The LumenX2-M4 features VerifyBoost technology delivering verify speeds of up to 750 megabytes per second.
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We will leverage the experience gained from the impacts of COVID-19, along with the expertise of our leadership and operational teams, to effectively navigate and mitigate these potential challenges.
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The LumenX2 platform received the 2025 Global Technology Award in the Programming category, and the refreshed LumenX-M8 manual programmer received both the 2025 Mexico Technology Award and the 2025 Step-by-Step Excellence Award.
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After a period of stability which lasted over a decade, a key organizational leadership transition occurred in the fourth quarter of 2024 with the planned retirement of Anthony Ambrose and the appointment of a new CEO and President, William Wentworth. Subsequent changes have also occurred in the leadership of the Sales, Marketing and Engineering functions.
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These products support the Company’s Unified Programming Platform strategy, which provides a single, scalable programming architecture from design and new product introduction through high-volume production, creating a seamless transition across the preprogrammed parts supply chain. With the updated programming platform, the Company has turned its attention to broadening and stabilizing its business model.
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With expected growth in IoT applications, the business opportunity for this market differs depending on quality, security and automation. Some of our automated programming systems integrate data programming, automated handling functions and/or security deployment into a single product solution. Quality and security-conscious customers, particularly those in high-volume manufacturing and programming, drive this portion of our business.
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Historically, Data I/O’s revenues have been overwhelmingly tied to capital expenditure cycles in programming equipment, making the business highly cyclical and dependent on customers’ capacity expansion decisions. The Company is now focusing its efforts on progressing toward a more balanced revenue model that incorporates recurring services and consumables revenues, including adapter sales, software services, and programming-at-test service offerings.
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Our newer products are positioned and recognized as some of the most advanced programming and security deployment solutions. Our programming solutions include a broad range of products, systems, modules and accessories, grouped into two general categories: automated programming systems and manual programming systems.
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For the full year, consumable adapters and services revenue represented approximately 58% of total revenue, helping to moderate the impact of continued softness in capital equipment demand.
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Our PSV family of automated programming systems delivers a broad range of programming capacity and capability to the marketplace. Our PSV2800 Automated Programming System focuses on dedicated high-volume manufacturing in a lower cost platform.
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This diversification is expected to continue as the Company expands its addressable market from traditional programming capex into the broader data provisioning ecosystem. 3 Table of Contents During 2025, the Company underwent a significant transition in its financial leadership.
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Our PSV7000 Automated Programming System continues to be well adopted in the marketplace, in particular for automotive electronics customers and as a base for security deployment upgrades. Our PSV5000 Automated Programming System combines mid-range capacity and flexibility with competitive pricing and also supports security deployment. Our PSV3500 Automated Programming System is a lower cost platform for basic programming needs.
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Gerald Ng, who had served as Vice President, Chief Financial Officer, Secretary and Treasurer since August 2023, departed the Company in July 2025. Todd Henne served as interim CFO during the transition period.
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Our PSV family of handlers has won multiple industry awards for technical excellence and innovation and has a large global installed base. Our automated systems have list selling prices ranging from approximately $62,000 to $690,000 and our manual systems have list selling prices ranging from approximately $10,000 to $20,000.
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Effective August 11, 2025, the Company appointed Charles DiBona as Vice President of Finance, and as an Executive Officer of the Company and the Company’s Vice President, Chief Financial Officer, Secretary and Treasurer, effective August 15, 2025. Mr.
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Our security deployment system, SentriX®, is offered as a software license added to existing programming systems or on a pay per part use basis along with related fees. Data I/O programming technology is integrated with the PSV family to create highly-flexible systems that deliver outstanding performance with low total cost of ownership.
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DiBona brings extensive experience in financial leadership across public and private companies, including prior roles at Microsoft Corporation, Unify Square, Inc., and LabVantage Solutions, Inc. The leadership transition was part of a broader deliberate strengthening of the executive suite to ensure the Company has the right team in place to execute its growth strategy.
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The Lumen®X programming engine is our highest performance programming engine, designed to support eMMC and UFS programming of large NAND FLASH, as well as microcontrollers, serial FLASH and other devices. Increasing memory densities and the need for faster data interfaces are resulting in an expected transition to the use of UFS devices.
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On August 16, 2025, the Company experienced a ransomware incident affecting certain internal IT systems. Upon discovery, the Company promptly activated its response protocols, secured its global IT systems and implemented containment measures, including proactively taking certain platforms offline. The Company engaged leading cybersecurity experts to support system recovery and conduct a comprehensive investigation.
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LumenX is available on our PSV7000 and PSV5000 and as a standalone manual programmer. FlashCORE™, and our universal job setup tool, Tasklink™ for Windows®, are available in each family of our automated programming systems and in FlashPAK™, our manual programming system. The SentriX security system adds security capability to our data programming system.
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It was determined that the attack was not specifically targeted at Data I/O but originated through a vulnerability in a commercially available third-party firewall service provider. By September 2025, the incident had been completely contained and remediated, all global systems were restored, and the Company does not believe it has any remaining risk exposure from the incident.
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SentriX allows customers of any size and demand-profile to securely add keys, certificates, and other security information to specialized regions of authentication integrated circuits ("ICs”), secure elements and secure microcontrollers. We provide device support and service on all of our products.
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The remediation and associated professional fees resulted in approximately $388,000 of one-time costs, primarily recorded in the third quarter of 2025. As an outcome of the incident, the Company’s IT systems and cybersecurity posture were strengthened, with improved corporate processes and enhanced security infrastructure.
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Semiconductor devices are a large, growing market, in terms of units, bits programmed and need for security. We believe that our sales are driven by many of the same forces that propel the semiconductor industry as well as the automotive electronics industry. We sell to the manufacturers who are consumers of certain semiconductors.
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In the latter part of 2025, the Company began the implementation process of a new enterprise resource planning (“ERP”) system, Acumatica, to replace the legacy IFS system. This initiative is part of the broader effort to optimize business operations and IT infrastructure.
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When their business grows, they buy more semiconductors which, in turn, require additional programming equipment to maintain production speeds or program new device technologies.
Added
The Company is leveraging AI-driven tools to accelerate traditionally time-consuming aspects of the ERP implementation, including chart of accounts mapping, data migration planning, and intercompany policy documentation. The ERP transition is expected to improve operational efficiency, enhance financial reporting capabilities, and support the Company’s growth objectives.
Removed
Because of the rapidly changing technology in the semiconductor, electronic equipment and software industries, portions of our products might infringe upon existing patents or copyrights, and we may be required to obtain licenses or discontinue the use of infringing technology.
Added
The Acumatica implementation project remains on schedule with a target switchover date of July 1, 2026. Geopolitical, economic and trade uncertainties continued to impact the Company’s markets in 2025. Tariff policies affecting goods manufactured in the United States and China created additional cost pressures and business uncertainty for the Company and its customers.
Removed
The Company's Board currently includes Data I/O's CEO and four Independent Directors. It is diverse in gender, education, professional experience and differences in viewpoints and skills.
Added
As a company that produces products in both the United States and China and sells into global markets, the evolving tariff environment required ongoing evaluation of manufacturing strategies, supply chain resilience, and pricing. Some customers continued to shift production locations in response to trade tensions, affecting demand patterns.
Removed
Through its continuous improvement practices and our operations’ focus on assembly and test with no fabrication, the Company consumes relatively little energy, has minimal or no emissions or pollutants to air and wastewater, and complies with workplace labor, safety and business practices on three continents.
Added
The Company’s dual-sourced manufacturing strategy in Redmond, Washington and Shanghai, China provides flexibility to navigate these challenges and optimize tariff exposure and to support customers to the extent they shift manufacturing to the Americas.
Removed
Additionally, the Company started to purchase only sustainable (green) electric power (in our China & U.S. facilities in 2023; German facility in prior years) and started to purchase offsets for its carbon emissions from natural gas use in the U.S. facility. For our vehicles, we have been replacing company-owned cars with hybrid or electric vehicles where feasible.
Added
While oil price increases and conflicts in the Middle East have limited direct effect on our input factors, their broader impacts on general price levels and economic activity could affect our customers and end markets as well as our material, labor, and shipping costs.
Removed
None of these actions have had a material financial impact. Recent developments to climate regulations and guidelines have increased customer demands for climate disclosures on their timelines as opposed to regulations applicability to the Company. Data I/O is also committed to giving back to our local communities through volunteer and internship programs. The Company provide employees time-off to volunteer.
Added
The broader semiconductor market has experienced a multi-year cyclical downturn continuing into 2025, with notable softness in automotive electronics, historically the Company’s largest end market, as a reassessment of electric vehicle capacity and manufacturing plans affecting customer ordering patterns. Automotive electronics represented approximately 64% of 2025 bookings, compared to 59% in 2024.
Removed
In addition, the Company provides internships to local high school and college students through STEM and technical colleges. Compliance with environmental laws has not had, nor is it currently expected to have, a material effect on our capital expenditures, financial position, results of operations or competitive position.
Added
Demand for capital equipment was further impacted by a reallocation of technology spending, with AI and AI datacenter-related investments taking priority. In response, the Company has shifted its strategic focus to diversify its market reach, expanding into the broader data provisioning market and positioning to capitalize on the emerging buildout of Edge AI.
Removed
Potential regulations regarding climate change measurements and disclosures could require significant effort and costs. Executive Officers of the Registrant Set forth below is certain information concerning the executive officers of Data I/O as of March 18, 2025: Name Age Position William Wentworth 59 President and Chief Executive Officer Gerald Y.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

41 edited+20 added−2 removed64 unchanged
Biggest changeNEW PRODUCTS OR SERVICES We are pursuing new product or service initiatives, and business models that may develop more slowly and/or to a lesser extent than expected.
Biggest changeThe escalation of military conflict involving Iran and other actors in the Middle East, including risks of broader regional war, cyberattacks, and disruption to critical shipping routes and energy infrastructure, could materially impact global economic conditions and adversely affect our business, including through increased costs, supply chain disruptions, and demand volatility. 13 Table of Contents NEW PRODUCTS OR SERVICES We are pursuing new product or service initiatives, and business models that may develop more slowly and/or to a lesser extent than expected.
As a public company, we are subject to numerous governmental and stock exchange requirements which we believe, we are in compliance with. Our failure to meet regulatory requirements and exchange listing standards may result in actions such as: the delisting of our stock, impacting our stock’s liquidity; SEC enforcement actions; and securities claims and litigation.
As a public company, we are subject to numerous governmental and stock exchange requirements with which we believe we are in compliance. Our failure to meet regulatory requirements and exchange listing standards may result in actions such as: the delisting of our stock, impacting our stock’s liquidity; SEC enforcement actions; and securities claims and litigation.
The Sarbanes-Oxley Act of 2002 and the Securities and Exchange Commission (SEC) have requirements that we may fail to meet or we may fall out of compliance with, such as the internal controls auditor attestation required under Section 404 of the Sarbanes-Oxley Act of 2002, with which we are not currently required to comply as we are a smaller reporting company.
The Sarbanes-Oxley Act of 2002 and the Securities and Exchange Commission (SEC)SEC have requirements that we may fail to meet or we may fall out of compliance with, such as the internal controls auditor attestation required under Section 404 of the Sarbanes-Oxley Act of 2002, with which we are not currently required to comply as we are a smaller reporting company.
Due to the length of time to market from design to production in security provisioning, if these markets develop more slowly than planned, or if our security deployment solutions are not widely accepted, then we may not achieve our expected return on investment in new technologies, which may significantly affect the results of our existing business.
Due to the length of time to market from design to production in security provisioning, if these markets develop more slowly than planned, or if our solutions are not widely accepted, then we may not achieve our expected return on investment in new technologies, which may significantly affect the results of our existing business.
If we cannot develop alternative sources of these components, if sales of parts or software are discontinued by the supplier, if we experience deterioration in our relationship with these suppliers, or if these suppliers require financing which is not available, there may be delays or reductions in product introductions or shipments, which may materially adversely affect our operating results.
If we cannot develop alternative sources of these components, if sales of parts or software are discontinued by the supplier, if we experience deterioration in our relationship with these suppliers, or if these suppliers require financing which is not available, there may be delays or reductions in product introductions or shipments, which may materially and adversely affect our operating results.
Improper SMT process control can negatively impact the end customer’s ability to successfully program devices. This can cause them to change their programing methods away from pre-programming to post placement programming techniques, including ISP, ICT.
Improper SMT process control can negatively impact the end customer’s ability to successfully program devices. This can cause them to change their programming methods away from pre-programming to post placement programming techniques, including ISP, ICT.
Any substantial inability to achieve our current business plan could have an adverse impact on our financial position, liquidity, or results of operations and may require us to reduce expenditures and/or seek additional financing. 16 Table of Contents Therefore, we may seek additional funding through public or private debt or equity financing or from other sources.
Any substantial inability to achieve our current business plan could have an adverse impact on our financial position, liquidity, or results of operations and may require us to reduce expenditures and/or seek additional financing. Therefore, we may seek additional funding through public or private debt or equity financing or from other sources.
We assume that we will continue to have the status of a smaller reporting company based on the aggregate market value of the voting and non-voting shares held as of June 30, 2024.
We assume that we will continue to have the status of a smaller reporting company based on the aggregate market value of the voting and non-voting shares held as of June 30, 2025.
Unfortunately, increased regulations pushed onto public companies may have a disproportionate impact to smaller public companies.
Increased regulations pushed onto public companies may have a disproportionate impact to smaller public companies.
Any financing we obtain may contain covenants that restrict our freedom to operate our business or may require us to issue securities that have rights, preferences or privileges senior to our Common Stock and may dilute your ownership interest. Our stock price may be volatile and, as a result, our shareholders may lose some or all their investment.
Any financing we obtain may contain covenants that restrict our freedom to operate our business or may require us to issue securities that have rights, preferences or privileges senior to our Common Stock and may dilute your ownership interest. 19 Table of Contents Our stock price may be volatile and, as a result, our shareholders may lose some or all their investment.
We could be forced to incur significant expenses if we were required to modify our products, our services or our existing security and privacy procedures to comply with new or expanded regulations. REGULATORY REQUIREMENTS Failure to comply with increasing regulatory requirements may adversely affect our stock price and business.
We could be forced to incur significant expenses if we were required to modify our products, our services or our existing security and privacy procedures to comply with new or expanded regulations. 20 Table of Contents REGULATORY REQUIREMENTS Failure to comply with increasing regulatory requirements may adversely affect our stock price and business.
The reader is advised, however, to consult any future disclosures we make on related subjects in our 10-Q, 8-K and 10-K reports to the SEC and press releases. Also, note that we provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business.
The reader is advised, however, to consult any future disclosures we make on related subjects in our 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission (“SEC”) and press releases. Also, note that we provide the following cautionary discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business.
Acquisitions may include risks, such as: · burdening management and our operating teams during the integration of the acquisition; · diverting management’s attention from other business concerns; · failing to successfully integrate, scale or monetize the acquired products or technologies; · lack of acceptance of the acquired products by our sales channels or customers; · entering markets where we have no or limited prior experience; · potential loss of key employees of the acquired company; and/or · additional burden of support for an acquired programmer architecture.
Acquisitions may include risks, such as: · burdening management and our operating teams during the integration of the acquisition; · diverting management’s attention from other business concerns; · failing to successfully integrate, scale or monetize the acquired products or technologies; · lack of acceptance of the acquired products by our sales channels or customers; · entering markets where we have no or limited prior experience; · potential loss of key employees of the acquired company; and/or · additional burden of support for an acquired programmer architecture. 15 Table of Contents Future acquisitions may also affect our financial position.
These will require significant costs, work and reputational risk for failing to meet requirements, with miniscule impact to the global environment. Item 1B. Unresolved Staff Comments None.
These will require significant costs, work and reputational risk for failing to meet requirements, with miniscule impact to the global environment. 21 Table of Contents Item 1B. Unresolved Staff Comments None.
For example, we may encounter these problems: · technical problems in the development of a new programming and/or security deployment systems or the robotics for new automated handing systems; · inability to hire qualified personnel or turnover in existing personnel or inability to engage or retain key technology partners; · delays or failures to perform by us or third parties, including some smaller early stage or recently acquired companies, involved in our development projects; 12 Table of Contents · dependence on large semiconductor companies for cooperation and support to securely provision their devices.
For example, we may encounter these problems: · technical problems in the development of a new programming or provisioning systems; · inability to hire qualified personnel or turnover in existing personnel or inability to engage or retain key technology partners; · delays or failures to perform by us or third parties, including some smaller early stage or recently acquired companies, involved in our development projects; · dependence on large semiconductor companies for cooperation and support to securely provision their devices.
Other factors, which may cause our quarterly operating results to fluctuate, include: · increased competition; · timing of new product announcements and timing of development expenditures; · product or service releases and pricing changes by us or our competitors; 15 Table of Contents · market acceptance or delays in the introduction of new products or services; · production constraints, including part shortages impact on us and our supply chains; · quality issues; · labor or material constraints; · timing of significant orders; · timing of installation or customer acceptance requirements; · sales channel mix of direct vs. indirect distribution; · civil unrest, war or terrorism; · health issues such as the outbreak of the coronavirus or other viruses impacting workers, suppliers, customers, travel, or our facilities; · customers’ budgets; · changes in accounting rules, tax or other legislation; · adverse movements in exchange rates, interest rates, inflation or tax rates; · cyclical and seasonal nature of demand for our customers’ products; · general economic conditions in the countries where we sell products; · expenses and delays obtaining authorizations in setting up new operations or locations; and/or · facilities relocations.
Other factors, which may cause our quarterly operating results to fluctuate, include: · increased competition; · timing of new product announcements and timing of development expenditures; · product or service releases and pricing changes by us or our competitors; · market acceptance or delays in the introduction of new products or services; · production constraints, including part shortages impact on us and our supply chains; · quality issues; · labor or material constraints; · timing of significant orders; · sales channel mix of direct vs. indirect distribution; · civil unrest, war or terrorism; · health issues such as the outbreak of the coronavirus or other viruses impacting workers, suppliers, customers, travel, or our facilities; · customers’ budgets; · changes in accounting rules, tax or other legislation; · adverse movements in exchange rates, interest rates, inflation or tax rates; · cyclical and seasonal nature of demand for our customers’ products; · general economic conditions in the countries where we sell products; · expenses and delays obtaining authorizations in setting up new operations or locations; and/or · facilities relocations. 18 Table of Contents Due to any of the foregoing factors, it is possible that in some future quarters, our operating results will be below the expectations of analysts and investors.
In China, our workers have benefits and similar arrangements provided under a “FSCO” labor agreement, and we could be adversely affected if we were unable to continue that arrangement. We may need to raise additional capital and our future access to capital is uncertain.
In China, our workers have benefits and similar arrangements provided under a “FSCO” labor agreement, and we could be adversely affected if we were unable to continue that arrangement. We may need to raise additional capital and our future access to capital is uncertain. Cash at December 31, 2025 was $7.9 million.
Our business may be adversely affected if our relationships with semiconductor manufacturers deteriorate or if semiconductor manufacturers are not willing to closely work with us on security deployment. Consolidation within the semiconductor industry may also impact us. As we develop more security deployment solutions, we will need to partner more closely with semiconductor manufacturers.
Our business may be adversely affected if our relationships with semiconductor manufacturers deteriorate or if semiconductor manufacturers are not willing to closely work with us on security deployment. Consolidation within the semiconductor industry may also impact us.
Future acquisitions may also affect our financial position. For example, we may use significant cash or incur debt, which would weaken our balance sheet, or issue additional shares, potentially diluting existing shareholders. We may also capitalize goodwill and intangible assets acquired, the amortization or impairment of which would reduce our profitability.
For example, we may use significant cash or incur debt, which would weaken our balance sheet, or issue additional shares, potentially diluting existing shareholders. We may also capitalize goodwill and intangible assets acquired, the amortization or impairment of which would reduce our profitability. We cannot guarantee that future acquisitions will improve our business or operating results.
We cannot guarantee that future acquisitions will improve our business or operating results. If we are unable to protect our IP, we may not be able to compete effectively or operate profitably. We rely on patents, copyrights, trade secrets and trademarks to protect our IP, as well as product development and marketing skill to establish and protect our market position.
If we are unable to protect our IP, we may not be able to compete effectively or operate profitably. We rely on patents, copyrights, trade secrets and trademarks to protect our IP, as well as product development and marketing skill to establish and protect our market position.
Product and service technology in our industry evolves rapidly, making timely product innovation essential to success in the marketplace. Introducing products and services with improved technologies or features may render our existing products obsolete and unmarketable.
Failure to adapt to new technological trends in our industry may impact our competitiveness and financial results. Product and service technology in our industry evolves rapidly, making timely product innovation essential to success in the marketplace. Introducing products and services with improved technologies or features may render our existing products obsolete and unmarketable.
CYBERSECURITY RISKS Cybersecurity breaches or terrorism could result in liabilities or costs as well as damage to or loss of our data or customer access to our website and information systems.
The costs of preventing, responding to and recovering from cybersecurity incidents may be material. Cybersecurity breaches or terrorism could result in liabilities or costs as well as damage to or loss of our data or customer access to our website and information systems.
In order to lead in new and potentially lucrative market opportunities, for example in security deployment of programmable devices, circuit boards and electronic systems, we are making significant investments in people, technology and business development while the market is developing and uncertain.
In order to lead in new and potentially lucrative market opportunities, we are making significant investments in people, technology and business development while the market is developing and uncertain.
There is uncertainty regarding the tariffs expected to be imposed, and any increase in tariff rates and subjecting additional items to tariffs could increase our costs, revenues and the competitiveness of our products due to our manufacturing locations. Trade and tariff issues are creating business uncertainty and may spread to and impact other jurisdictions.
Currently, certain of our products are subject to tariffs imposed by one country on goods manufactured in the other country. There is uncertainty regarding the tariffs expected to be imposed, and any increase in tariff rates and subjecting additional items to tariffs could increase our costs, revenues and the competitiveness of our products due to our manufacturing locations.
If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our stock could drop significantly. 17 Table of Contents While we have policies and procedures in place designed to prevent corruption and bribery, because our business is significantly international, violations of the Foreign Corrupt Practices Act (FCPA) could have a significant adverse effect on our business due to the disruption and distraction of an investigation, financial penalties and criminal penalties.
While we have policies and procedures in place designed to prevent corruption and bribery, because our business is significantly international, violations of the Foreign Corrupt Practices Act (FCPA) could have a significant adverse effect on our business due to the disruption and distraction of an investigation, financial penalties and criminal penalties.
Additionally, ongoing trade tensions between the United States and China are impacting our ability to seamlessly design, build, market and sell our products. These tensions may increase suddenly at any time due to government policies or actions. Some customers have moved production away from China, further from our facilities and engineers.
Trade and tariff issues are creating business uncertainty and may spread to and impact other jurisdictions. Additionally, ongoing trade tensions between the United States and China are impacting our ability to seamlessly design, build, market and sell our products. These tensions may increase suddenly at any time due to government policies or actions.
Our reliance on a small number of suppliers may result in a shortage of key components, which may adversely affect our business, and our suppliers may experience financial difficulties which could impact their ability to service our needs.
As we develop more security deployment solutions, we will need to partner more closely with semiconductor manufacturers. 16 Table of Contents Our reliance on a small number of suppliers may result in a shortage of key components, which may adversely affect our business, and our suppliers may experience financial difficulties which could impact their ability to service our needs.
International sales represented approximately 94%, 90% and 93% of net sales in 2024, 2023 and 2022, respectively. We expect that international sales will continue to be a significant portion of our net revenue.
We expect that international sales will continue to be a significant portion of our net revenue.
Our market growth outlook and related business decisions may be wrong. These factors could have a material adverse effect on our business and financial condition. 14 Table of Contents Our international operations may expose us to additional risks that may adversely affect our business.
These factors could have a material adverse effect on our business and financial condition. 17 Table of Contents Our international operations may expose us to additional risks that may adversely affect our business. International sales represented approximately 94%, 94%, and 90% of net sales in 2025, 2024 and 2023, respectively.
Also, our new products or services may contain defects or errors that give rise to product liability claims against us or cause our products to fail to gain market acceptance. Our future success depends on our ability to successfully compete with other technology firms in attracting and retaining key technical personnel.
Also, our new products or services may contain defects or errors that give rise to product liability claims against us or cause our products to fail to gain market acceptance.
We operate in a cyclical industry. We will continue to examine our level of operating expense based upon our projected revenues. Any planned increases in operating expenses may result in losses in future periods if projected revenues are not achieved or the investment level required is too large.
Any planned increases in operating expenses may result in losses in future periods if projected revenues are not achieved or the investment level required is too large. As a result, we may need to generate greater revenues than we have recently in order to maintain profitability.
Technological advances have reduced the barriers of entry into the market in which we compete. We expect competition to increase from both established and emerging companies.
Technological advances have reduced the barriers of entry into the capital equipment segment of the data provisioning market in which we compete. We expect competition to increase from both established and emerging companies. If we fail to compete successfully against current and future sources of competition, our profitability and financial performance will be adversely impacted.
We endeavor to have multi-sourced manufacturing, but this is not currently practical for all products in all locations. War based restrictions, embargos, and supply chain disruptions have and are occurring because of the Russian invasion of Ukraine, which could have economic and other indirect impacts to our business.
War based restrictions, embargos, and supply chain disruptions have and are occurring because of the Russian invasion of Ukraine, which could have economic and other indirect impacts to our business. We do not have any operations in Russia or Ukraine, nor do we rely on any software or hardware components sourced from these two countries.
Due to any of the foregoing factors, it is possible that in some future quarters, our operating results will be below the expectations of analysts and investors. We have a history of operating losses and may be unable to generate enough revenue to achieve and maintain profitability. We have incurred operating losses in five of the last ten years.
We have a history of operating losses and may be unable to generate enough revenue to achieve and maintain profitability. We have incurred operating losses in 8 of the last ten years. We operate in a cyclical industry. We will continue to examine our level of operating expense based upon our projected revenues.
The industries are highly cyclical and are characterized by rapid technological change, short product life cycles and fluctuations in manufacturing capacity and pricing and gross margin pressures. In a difficult economic climate, it may take us longer to receive payments from our customers and some of our customers’ business may fail, resulting in non-payment.
In a difficult economic climate, it may take us longer to receive payments from our customers and some of our customers’ business may fail, resulting in non-payment. Our market growth outlook and related business decisions may be wrong.
As a result, we may need to generate greater revenues than we have recently in order to maintain profitability. However, we cannot provide assurance that our revenues will increase and our business strategies will be successful, resulting in future losses. The loss of key employees may adversely affect our operations. We have employees located in the U.S., Germany and China.
However, we cannot provide assurance that our revenues will increase and our business strategies will be successful, resulting in future losses. The loss of key employees may adversely affect our operations. During 2025, the Company underwent significant leadership transitions, including the appointment of Charles DiBona as Chief Financial Officer in August 2025, replacing Gerald Ng.
These problems may result in a delay or decline in sales or increased costs. We may pursue business acquisitions that could impair our financial position and profitability. We may pursue acquisitions of complementary technologies, product lines or businesses.
These problems may result in a delay or decline in sales or increased costs. We may pursue business acquisitions that could impair our financial position and profitability. During 2025, the Company engaged a leading boutique middle-market investment bank to evaluate inorganic growth opportunities. Management has expressed a preference for non-equity funding sources when pursuing acquisitions.
Failure to adapt to increasing automotive electronics customer requirements and a rapidly changing global automotive electronics ecosystem may impact our competitiveness and result in a decline in sales or increased costs. Concentration in automotive electronics and our orders related to automotive electronics customers has been dominant in recent years at 59% in 2024, 63% in 2023 and 61% in 2022.
Our future success depends on our ability to successfully compete with other technology firms in attracting and retaining key technical personnel. 14 Table of Contents Failure to adapt to increasing automotive electronics customer requirements and a rapidly changing global automotive electronics ecosystem may impact our competitiveness and result in a decline in sales or increased costs.
RISK FACTORS: TARIFFS AND TRADE ISSUES Changes in tariffs and trade issues may adversely affect our business, including revenues and/or gross margins. We produce products in the United States and China. Currently, certain of our products are subject to tariffs imposed by one country on goods manufactured in the other country.
RISK FACTORS: TARIFFS AND TRADE ISSUES Changes in tariffs and issues of trade and global conflict may adversely affect our business, including revenues and/or gross margins. The tariff environment continued to evolve in 2025, with new tariff actions and ongoing trade tensions between the United States and China among others affecting the Company’s costs and competitive position.
If we fail to compete successfully against current and future sources of competition, our profitability and financial performance will be adversely impacted. 13 Table of Contents THIRD PARTY RELATIONSHIPS If we do not develop and enhance our relationships with semiconductor manufacturers, our business may be adversely affected.
The Company is expanding into adjacent segments of the data provisioning market, which has developing competition and may bring exposure to new competitors and competitive forces. THIRD PARTY RELATIONSHIPS If we do not develop and enhance our relationships with semiconductor manufacturers, our business may be adversely affected.
Current and future public health crise, geo-political conflicts, and economic barriers, tariffs and constraints can adversely impact the Company’s financial performance. Our business is highly impacted by capital spending plans and other economic cycles that affect the users and manufacturers of integrated circuits.
Furthermore, the entire market is showing early signs of a recovery led by use cases such as the emerging buildout of Edge AI. Current and future public health crises, geo-political conflicts, and economic barriers, tariffs and constraints can adversely impact the Company’s financial performance.
Removed
We do not have any operations in Russia or Ukraine, nor do we rely on any software or hardware components sourced from these two countries. The Israel - Hamas war could have similar issues, although we have not experienced any material impacts.
Added
The Company produces products in both the United States and China and sells into global markets. Ongoing supply chain planning and other actions have been mitigating the impact of new tariffs, trade and inflationary pressures, including shifting material sourcing and product manufacturing.
Removed
In the security deployment area, we have introduced a pay per use business model and service fees that may not be accepted by our customers who are accustomed to paying for capital equipment upfront, rather than paying per use charges. 11 Table of Contents Failure to adapt to new technological trends in our industry may impact our competitiveness and financial results.
Added
The Company’s dual-sourced manufacturing strategy in Redmond, Washington and Shanghai, China provided flexibility to navigate tariff challenges, optimize tariff exposure and support customers to the extent they shift manufacturing to the Americas.
Added
However, further increases in tariff rates, additional items subject to tariffs, or retaliatory trade actions could increase costs and adversely affect revenues and gross margins and on-going uncertainty surrounding tariffs may continue to affect customer investment decisions and timelines, adversely affect demand for the Company’s offerings. We produce products in the United States and China.
Added
Some customers have moved production away from China, further from our facilities and engineers. We endeavor to have multi-sourced manufacturing, but this is not currently practical for all products in all locations.
Added
Concentration in automotive electronics represented approximately 64% of 2025 bookings, compared to 59% in 2024 and 63% in 2023, as the broader slowdown in the semiconductor industry caught up with the automotive sector.
Added
Demand was further impacted by a broad-based reallocation of technology spending toward AI-related investments and a reassessment of electric vehicle manufacturing capacity and plans by major automotive OEMs and their supply chains.
Added
The emerging buildout of Edge AI represents a potential growth driver as autonomous systems and connected vehicles require increasing volumes of data to be securely provisioned into semiconductor devices at the point of manufacture.
Added
The active pursuit of acquisitions increases the risks described below. We may pursue acquisitions of complementary technologies, product lines or businesses.
Added
The broader semiconductor market has experienced a multi-year cyclical downturn which continued into 2025, with notable softness in automotive electronics as a reassessment of electric vehicle capacity and manufacturing plans affected ordering patterns. Demand for capital equipment was further impacted by a reallocation of technology spending, with AI and AI datacenter-related investments taking priority.
Added
The overall data provisioning market represents a significantly larger opportunity than the traditional programming equipment market. While it has been impacted by many of the same macroeconomic forces as the capital equipment segment, the impact has been somewhat more muted, and the cyclical effects are much less pronounced.
Added
Our business is highly impacted by capital spending plans and other economic cycles that affect the users and manufacturers of integrated circuits. The industries are highly cyclical and are characterized by rapid technological change, short product life cycles and fluctuations in manufacturing capacity and pricing and gross margin pressures.
Added
Additional changes were made in sales, marketing, and engineering leadership as part of the Company’s strategic transformation. While management believes these changes strengthen the Company’s capabilities, leadership transitions carry inherent risks including potential disruption to ongoing operations and loss of institutional knowledge. We have employees located in the U.S., Germany and China.
Added
CYBERSECURITY RISKS Cybersecurity incidents could result in loss of revenue, business disruptions, remediation costs, legal claims and proceedings, regulatory actions, reporting delays, increased insurance costs, or damage to the Company’s reputation which could adversely impact or operations and financial results.
Added
In August 2025, the Company experienced a ransomware incident that resulted in the shutdown of most global operating systems, business disruptions including the inability to timely process certain shipments, and significant remediation costs of approximately $388,000 in the third quarter of 2025.
Added
While the incident was contained and remediated by September 2025 and the Company does not believe any customer data was compromised, the incident demonstrated the Company’s vulnerability to cyber attacks and the potential for material operational and financial impacts.
Added
The Company has implemented significant enhancements to its cybersecurity infrastructure and processes; however, no assurance can be given that these measures will prevent future incidents. A future cybersecurity incident could result in loss of revenue, business disruptions, remediation costs, legal claims and proceedings, regulatory actions, reporting delays, increased insurance costs, or damage to the Company’s reputation.
Added
If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our stock could drop significantly.
Added
As previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024, the Company identified a material weakness in internal control over financial reporting related to user access and segregation of duties within certain IT systems.
Added
During 2025, the Company implemented remediation actions including enhancements to system access controls, improved segregation of duties, and expanded monitoring and review procedures.
Added
Meanwhile, the Company has identified an additional instance of material weakness, and while management has taken steps to remediate these internal control issues related to reviews and reporting, these weaknesses did persist during the reporting period of this Form 10-K for the year ended December 31, 2025. See item 9A.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+11 added−8 removed0 unchanged
Biggest changeAs part of its oversight role, the Audit Committee receives reporting about the Company’s cybersecurity program, activities, threats and incidents (if any) through periodic updates. The cybersecurity program is managed by our outsourced IT infrastructure team with oversight and coordination by our CFO, who reports directly to our CEO.
Biggest changeThe Audit Committee of the Board of Directors is responsible for board-level oversight of cybersecurity risk. The cybersecurity program is managed by our outsourced IT infrastructure team with oversight and coordination by our CFO, Charles DiBona, who reports directly to our CEO.
Removed
Item 1C. Cybersecurity CYBERSECURITY GOVERNANCE The Company’s Board of Directors has oversight responsibility for our strategic and operational risks. The Audit Committee of the Board of Directors is responsible for board-level oversight of cybersecurity risk; however, the full Board is typically present for Information Technology (IT) and Cybersecurity briefings.
Added
Item 1C. Cybersecurity The following discussion of our cybersecurity program reflects conditions as of December 31, 2025, including significant enhancements implemented in response to the August 2025 cybersecurity incident described below. On August 16, 2025, the Company was the subject of a targeted ransomware incident affecting certain internal IT systems.
Removed
Utilization of an outsourced IT infrastructure team allows Data I/O to access the necessary breadth and depth of leading cybersecurity programs, staff, expertise, and tools.
Added
Upon discovering the incident, the Company promptly activated its response protocols and implemented containment measures, including proactively shutting down most operating systems globally to manage the safety of the overall global systems environment. The Company engaged leading cybersecurity experts to support system recovery and conduct a comprehensive forensic investigation.
Removed
The IT infrastructure team monitors the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of the cybersecurity function, including the operation of the Company’s incident response plans, which include appropriate escalation to the CFO, CEO and the Audit Committee.
Added
The investigation determined that the attack originated through a vulnerability in a commercially available third-party firewall service provider and was not specifically targeted at Data I/O. By September 2025, the incident had been completely contained and remediated, all global systems were restored, and the Company does not believe it has any remaining risk exposure from the incident.
Removed
CYBERSECURITY RISK MANAGEMENT AND STRATEGY The Company has processes in place to identify, assess, and monitor material risks from cybersecurity threats, which are part of the Company’s overall cybersecurity risk management and have been embedded in the information systems operating procedures and internal controls.
Added
The remediation and associated professional fees resulted in approximately $388,000 of one-time costs, primarily recorded in the third quarter of 2025. The incident was reported on Form 8-K filed with the SEC on August 21, 2025. As an outcome of the incident, the Company’s IT systems and cybersecurity posture were strengthened, with improved corporate processes and enhanced security infrastructure.
Removed
Our IT function manages IT operations and continually evolves and enhances our systems to meet the constantly changing digital environment. Periodic cybersecurity risk assessments are performed to identify, assess, and prioritize potential risks to information, data assets, infrastructure and third-party vendors. The Company addresses significant risks through corrective or mitigating actions as necessary.
Added
Remediation actions included enhancements to system access controls, improved network segmentation, migration of critical systems to cloud-based solutions, and expanded monitoring and review procedures.
Removed
The Company has also established cybersecurity and information security awareness training programs. Employees with access to the Company’s network receive annual training on topics such as phishing, malware, and other cybersecurity risks. Training is administered and tracked through online learning modules with ongoing follow-up testing. All employees and contractors enter into non-disclosure confidentiality agreements.
Added
See “Risk Factors - Cybersecurity incidents could result in loss of revenue, business disruptions, remediation costs, legal claims and proceedings, regulatory actions, reporting delays, increased insurance costs, or damage to the Company’s reputation which could adversely impact or operations and financial results.” CYBERSECURITY GOVERNANCE The Company’s Board of Directors has oversight responsibility for our strategic and operational risks.
Removed
We work to continually evolve our systems to meet the constantly changing digital environment and continue to invest in the cybersecurity and resiliency of our networks and to enhance our internal controls and processes, which are designed to help protect our systems and infrastructure, and the information they contain. 18 Table of Contents There have been no risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition.
Added
During the third quarter of 2025, in connection with the appointment of Charles DiBona as Chief Financial Officer, the Company formalized CFO oversight of the cybersecurity program. Following the August 2025 ransomware incident, the Audit Committee increased the frequency of cybersecurity reporting and the Company enhanced its incident response protocols.
Removed
The nature of potential cybersecurity risks and threats are uncertain, and any future incidents, outages or breaches could have a material adverse effect on the Company’s business, financial conditions or results of operations. For more information about the cybersecurity risks we face, refer to the Risk Factors in section “Cybersecurity Risks” in Part I, Item 1A, "Risk Factors".
Added
The cybersecurity program is managed by the Company’s new outsourced IT infrastructure team, which provides 24/7 monitoring and response capabilities, with oversight and coordination by the CFO, who reports directly to the CEO. The Audit Committee receives regular updates on cybersecurity matters, including threat assessments, incident response activities, and the status of remediation efforts.
Added
CYBERSECURITY RISK MANAGEMENT AND STRATEGY The Company’s cybersecurity risk management program is integrated into its overall enterprise risk management framework. Following the August 2025 ransomware incident, the Company significantly enhanced its cybersecurity risk management processes.
Added
These enhancements included: patching the third-party firewall service provider through which the attack originated and evaluating replacement providers; implementing improved network segmentation and access controls; expanding endpoint detection and response capabilities; enhancing backup and disaster recovery procedures; conducting comprehensive vulnerability assessments across all IT systems; and providing additional cybersecurity awareness training to all employees.
Added
The Company also engaged independent cybersecurity consultants to review and validate the effectiveness of its enhanced security posture. As of September 30, 2025, all remediation activities had been completed and all global systems had been restored to full operational status. The Company continues to assess and adapt its cybersecurity risk management practices to address evolving threats. 22 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The Company has three facilities with our headquarters and primary engineering and operational functions located in Redmond, Washington. Our two subsidiary facilities in Munich, Germany and Shanghai, China provide extended worldwide sales, service, engineering and operations services. The total annual gross or base lease payments during 2024 and 2023 were approximately $795,000 and $823,000, respectively.
Biggest changeItem 2. Properties The Company has three facilities with our headquarters and primary engineering and operational functions located in Redmond, Washington. Our two subsidiary facilities in Munich, Germany and Shanghai, China provide extended worldwide sales, service, engineering and operations services. The total annual gross or base lease payments during 2025 and 2024 were approximately $735,000 and $795,000, respectively.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of December 31, 2024, we were not a party to any legal proceedings or aware of any indemnification agreement claims, the adverse outcome of which in management’s opinion, individually or in aggregate, would have a material adverse effect on our results of operations or financial position. Item 4 .
Biggest changeAs of December 31, 2025, we were not a party to any legal proceedings or aware of any indemnification agreement claims, the adverse outcome of which in management’s opinion, individually or in aggregate, would have a material adverse effect on our results of operations or financial position.
Removed
Mine Safety Disclosures Not Applicable. 19 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Common Stock is listed on the NASDAQ Capital Market (NASDAQ symbol is DAIO). The closing price was $2.77 on December 31, 2024. The approximate number of shareholders of record as of March 18, 2025 was 350.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Common Stock is listed on the NASDAQ Capital Market (NASDAQ symbol is DAIO). The closing price was $3.17 on December 31, 2025. The approximate number of shareholders of record as of April 14, 2026 was 337.
Except for special cash dividend of $4.15 per share paid on March 8, 1989, we have not paid cash dividends on our Common Stock and do not anticipate paying regular cash dividends in the foreseeable future. No sales of unregistered securities were made by us during the periods ended December 31, 2024, 2023 or 2022.
Except for special cash dividend of $4.15 per share paid on March 8, 1989, we have not paid cash dividends on our Common Stock and do not anticipate paying regular cash dividends in the foreseeable future. No sales of unregistered securities were made by us during the periods ended December 31, 2025, 2024 or 2023.

Other DAIO 10-K year-over-year comparisons