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Intelligent Protection Management (IPM) Risk Analysis
Risk Overview Q2, 2026
Risk Change Over Time
- Supply Chain - Risk 1Supply chain constraints in connection with our procurement services have in the past and may in the future delay revenue recognition, increase our costs and adversely affect our business, financial condition and results of operations.
As part of our procurement services offering, we obtain hardware and software products, including servers and other equipment incorporating memory, CPU and GPU components, on behalf of our customers. Depending on the terms of the applicable customer arrangement, we may act as an agent, pursuant to which our vendors drop ship products directly to our customers. Under this type of arrangement, we do not take control of the underlying products, and we recognize procurement revenue on a net basis when the products are shipped. With respect to larger or project-based arrangements, including sales of AI-related equipment, we may act as principal, pursuant to which we obtain the underlying components. Under this type of arrangement, we are primarily responsible for fulfilling the customer's order and bear inventory and fulfillment risk until control of the product transfers to the customer, at which point we recognize revenue on a gross basis. We rely on third-party suppliers and distribution channels for the memory, CPU and GPU components incorporated into the hardware we procure and, in certain cases, configure for our customers, and we do not control the availability, pricing or timing of delivery of these components. We have experienced, and may in the future experience, supply shortages, price increases and longer lead times affecting these components. Supply chain constraints may be driven by factors such as industry-wide allocation constraints, manufacturing capacity limitations, logistics and freight constraints, inflation, geopolitical tensions, trade disputes, tariffs, natural disasters, or changes in our suppliers' financial or business condition. During the six months ended June 30, 2026, supply chain constraints extended our product lead times compared to historical levels, resulting in delays between customer bookings and product shipments. As a result of these delays, a portion of our booked orders remained unrecognized as revenue pending fulfillment and delivery as of June 30, 2026. We cannot predict with certainty when these conditions will normalize, and continued constraints could result in further delays in revenue recognition, causing our reported revenue and results of operations to fluctuate and not accurately reflect underlying customer demand. These disruptions have also altered, and may in the future alter, the cost structure associated with fulfilling customer orders, which has resulted, and may in the future result, in losses on orders originally booked at expected margins. We cannot assure you that similar cost increases will not recur, particularly if constraints persist, worsen, or are replaced by new sources of disruption. If we are unable to effectively manage these constraints and related cost pressures, our customers cancel orders and seek products from our competitors and our gross margins, results of operations and financial condition could be materially and adversely affected.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 28
- Share Price & Shareholder Rights - Risk 1The ownership of our common stock is significantly concentrated in a small number of investors, some of whom are affiliated with our Board and management, which could prevent stockholders from having input on the course of our operations or otherwise lead to actual or potential conflicts of interest.
As of March 13, 2026, Jason Katz, our Chairman of the Board, and our Chief Executive Officer, and our largest stockholder, The J. Crew Delaware Trust B, beneficially owned an aggregate of approximately 26.5% of our outstanding common stock. The J. Crew Delaware Trust B is a trust formed by Mr. Katz for the benefit of certain of his family members. Mr. Katz is not a beneficiary of the trust and does not hold voting or dispositive power over the shares held by the trust. Mr. Katz, The J. Crew Delaware Trust B and others that have significant beneficial ownership of our common stock have substantial influence regarding matters submitted for stockholder approval, including proposals regarding: - any merger, consolidation or sale of all or substantially all of our assets;- the election of members of our Board; and - any amendment to our Certificate of Incorporation, as amended (the "Certificate of Incorporation"). The current or increased ownership position of any of these stockholders and/or their respective affiliates could delay, deter or prevent a change of control or adversely affect the price that investors might be willing to pay in the future for our common stock. In addition, the interests of these stockholders and/or their respective affiliates may significantly differ from the interests of our other stockholders and they may vote the common stock they beneficially own in ways with which our other stockholders disagree.
- Share Price & Shareholder Rights - Risk 2Our common stock is historically thinly traded, stockholders may be unable to sell at or near ask prices or at all and the price of our common stock may be volatile.
Historically, shares of our common stock have been thinly traded The Nasdaq Capital Market ("Nasdaq"), meaning that the number of persons interested in purchasing our common stock at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stockbrokers, institutional investors and others in the investment community that generate or influence sales volume. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on stock price. However, during certain periods, we have received, and may continue to receive, a high degree of media coverage that is published or otherwise disseminated by third parties, including blogs, articles, message boards and social and other media. This may include coverage that is not attributable to statements made by the Company or our Board. Information provided by third parties may not be reliable or accurate and could materially impact the trading price of our common stock, which could cause stockholders to lose their investments. The market prices and trading volume of our common stock have in the past experienced, and may continue to experience in the future, extreme volatility, which could cause purchasers of our common stock to incur substantial losses. We believe that the historical volatility and our historical market prices during such periods reflected market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know if these dynamics will continue in the future. Although our common stock is listed for trading on Nasdaq, a broader or more active public trading market for our common stock may not develop or be sustained, and the current trading level of our common stock may not be sustained. Due to these conditions, stockholders may be unable to sell their common stock at or near ask prices or at all if they desire to sell shares of common stock. The stock markets in general have experienced substantial volatility that has often been unrelated to the operating performance of individual companies. These broad market fluctuations may also adversely affect the trading price of our common stock, especially in light of the macro-economic factors including rising inflation rates, increased interest rates, bank-specific and broader financial institution liquidity challenges, the Russia-Ukraine conflict, the Israel-Hamas conflict and the ongoing conflict in Iran and the Middle East. In the past, following periods of volatility in the market price of a company's securities, stockholders have often instituted class action securities litigation against those companies. Such litigation, if instituted, could result in substantial costs and diversion of management attention and resources, which could significantly harm our profitability and reputation. Because of the limited trading market for our common stock, and because of the possible price volatility, stockholders may not be able to sell their shares of common stock when you desire to do so. The inability to sell shares in a rapidly declining market may substantially increase the risk of loss because of such illiquidity and because the price for our common stock may suffer greater declines because of its price volatility.
- Share Price & Shareholder Rights - Risk 3Shares issuable upon conversion of the Series A Preferred Stock, could depress our stock price.
As partial consideration for the Acquisition, we issued Newtek 4,000,000 shares of our Series A Non-Voting Common Equivalent Stock, par value $0.001 per share (the "Series A Preferred Stock"). As of March 13, 2026, Newtek owned approximately 30.6% of our issued and outstanding common stock or common-equivalent equity (on an as-converted and fully-diluted basis), calculated based on the number of shares of our common stock outstanding as of March 13, 2026. As a holder of our Series A Preferred Stock, Newtek does not have voting rights, except with respect to certain protective matters, such as amendments to the Company's Certificate of Incorporation or the Series A Preferred Stock Certificate of Designations (the "Certificate of Designations") that significantly and adversely affect the preferences, rights, privileges or powers of the Series A Preferred Stock. The Series A Preferred Stock is convertible into common stock only upon certain qualifying transfers to third parties. In addition, we entered into a Registration Rights Agreement with Newtek at the closing of the Acquisition (the "Registration Rights Agreement"), pursuant to which, among other things, we are obligated to use our reasonable best efforts to prepare and file a registration statement registering the resale the shares of our common stock issuable upon conversion of the Series A Preferred Stock. Once registered, the shares of common stock issuable upon conversion of the Series A Preferred Stock held by Newtek generally will not require further registration under the Securities Act, provided, however, that to the extent that Newtek is deemed to be our affiliate for purposes of the Securities Act, its sales of common stock issuable upon conversion of the Series A Preferred Stock will be subject to the resale restrictions of Rule 144 under the Securities Act. Any sale by Newtek of its shares of Series A Preferred Stock (or the perception that any such a sale may occur), coupled with the increase in the outstanding number of shares of our common stock following the conversion of the Series A Preferred Stock upon transfer, could have a dilutive effect to our existing stockholders and may affect the market for, and the market price of, shares of common stock in an adverse manner.
- Share Price & Shareholder Rights - Risk 4If we are not able to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our securities.
Our common stock began trading on Nasdaq on August 3, 2021. However, our common stock may not continue to be listed on Nasdaq in the future. In order to maintain our listing on Nasdaq, we must satisfy minimum financial and other continued listing requirements and standards, including those regarding director independence and independent committee requirements, minimum stockholders' equity, minimum share price, and certain corporate governance requirements. We may not be able to comply with the applicable listing standards, and Nasdaq could delist our common stock as a result. If our common stock is delisted from Nasdaq, we may be unable to list our common stock on another national securities exchange. If our common stock is delisted by Nasdaq, our common stock would likely trade on the OTCQB where an investor may find it more difficult to sell our shares or obtain accurate quotations as to the market value of our common stock.
- Share Price & Shareholder Rights - Risk 5Investor relations activities, nominal "float" and supply and demand factors may affect the price of our common stock.
We have engaged an investor relations firm to create investor awareness for our Company. These campaigns may include non-deal road shows and personal, video and telephone conferences with investors and prospective investors in which our business and business practices are described. We provide compensation to our investor relations firm and may in the future provide compensation to additional investor relations firms or financial advisory firms, for these services, and pay for newsletters, websites, mailings and email campaigns that are produced by third parties based upon publicly available information concerning us. We do not intend to review or approve of the content of such analyst reports or other writings and communications that are based upon analysts' own research or methods. Investor relations firms are generally required to disclose when they are compensated for their efforts and the source of such compensation, but whether such disclosure is made or in compliance with applicable laws is not under our control. In addition, our investors may, from time to time, take steps to encourage investor awareness through similar activities that may be undertaken at the expense of such investors. Investor awareness activities may also be suspended or discontinued, which may impact the trading market of our common stock. The SEC and the Financial Industry Regulatory Authority enforce various statutes and regulations intended to prevent manipulative or deceptive devices in connection with the purchase or sale of any security and carefully scrutinize trading patterns and company news and other communications for false or misleading information, particularly in cases where the hallmarks of "pump and dump" activities may exist, such as rapid share price increases or decreases. We and our stockholders may be subjected to enhanced regulatory scrutiny due to the fact that our affiliates hold a majority of our outstanding common stock and we have a limited number of shares of common stock that are publicly available for resale. The Supreme Court of the United States has stated that manipulative action is a term of art connoting intentional or willful conduct designed to deceive or defraud investors by controlling or artificially affecting the price of securities. Often times, manipulation is associated by regulators with forces that upset the supply and demand factors that would normally determine trading prices. Securities regulators have often cited thinly-traded markets, small numbers of holders and awareness campaigns as components of their claims of price manipulation and other violations of law when combined with manipulative trading, such as wash sales, matched orders or other manipulative trading timed to coincide with false or touting press releases. Our activities or the activities of third parties, or the small number of potential sellers or small percentage of stock in our public float, or determinations by purchasers or holders as to when or under what circumstances or at what prices they may be willing to buy or sell stock, could artificially impact (or could be claimed by regulators to have affected) the normal supply and demand factors that determine the price of our common stock.
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