NASDAQ: DAIO

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.

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. 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. 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.

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. 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. 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. 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. 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. 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. This diversification is expected to continue as the Company expands its addressable market from traditional programming capex into the broader data provisioning ecosystem.

During 2025, the Company underwent a significant transition in its financial leadership. 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. 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. 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.

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. 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. 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.

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. 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. 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. 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. 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. 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.

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. 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. The shift toward servicing the overall data provisioning market represents a significantly larger opportunity than the traditional programming equipment market. Early evidence of customer alignment and interest in this expanded value proposition was encouraging in the fourth quarter 2025 and into early 2026.

During 2025, the Company deployed artificial intelligence internally across all functional departments to accelerate operations and reduce costs. AI-enabled efficiencies contributed to a 7% reduction in normalized operating expense run-rate, from an annualized $26.7 million at the time of the CEO transition in November 2024 to $24.8 million by year end 2025, with plans for at least an additional $1 million of annual run rate savings within the first half of 2026. AI tools were applied to software engineering to accelerate programming algorithm development and device support, ERP implementation planning and data migration, customer support processes, legal documentation, and internal business operations. These capabilities enabled the Company to accomplish its transformation objectives faster than originally planned.

Additionally, in January 2026, the Company filed a shelf registration statement on Form S-3 providing the ability to issue up to $20 million dollars of equity securities, providing financial flexibility for potential strategic initiatives, including acquisitions aligned with the Company’s growth strategy. The Company also engaged a leading boutique middle-market investment bank during 2025 to support inorganic growth initiatives.

Subsequent to year end, in February 2026, the Company announced a collaboration with IAR, a leader in embedded development tools and security solutions, to combine IAR’s security expertise with Data I/O’s provisioning expertise to create a frictionless solution that reduces the complexity that exists with current device provisioning approaches. This collaboration is intended to simplify the process of securely programming and provisioning devices across global manufacturing supply chains.

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. 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. 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. Tariff policies created additional cost pressures and business uncertainty in the market with some players shifting production locations in response to trade tensions and thereby affecting demand patterns.

In line with the multi-year cyclical downturn in the broader semiconductor market, automotive electronics, historically the Company’s largest end market, has exhibited notable weakness continuing into 2025 as a reassessment of electric vehicle capacity and manufacturing plans affected customer ordering patterns. Automotive electronics represented approximately 64% of 2025 bookings, compared to 59% in 2024. More generally, overall capital equipment spending has seen a reallocation of technology spending towards AI and AI datacenter-related investments. Responding to and taking advantage of these long-term trends, the Company has shifted its strategic focus towards expanding into the greater data provisioning market and positioning to capitalize on the nascent buildout of Edge AI. Semiconductors in general, but especially within the emerging Edge AI sector, have exhibited an increasing need for security provisioning.

The data provisioning market has also continued to diversify such that adjacent segments such as programming services and programming at test now exceed the company’s traditional market segment of capital equipment.

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 and invested in 2025 in updating our programming platform to meet customers’ evolving needs.

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. 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. The 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. 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.

Our 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.

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

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.

OEMs

EMS

Programming Centers

Automotive Electronics

IoT, Industrial, Consumer Electronics

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

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. 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. 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. We provide our programming solutions in the factory and through service, programming centers and programming at test to support our customers’ manufacturing requirements.

Our device programming solutions currently target two high volume growing markets: automotive electronics and IoT, including industrial, consumer electronics and wireless.

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.

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.

·
Adding intelligence and processing into devices.

·
Connecting previously unconnected devices to networks and the internet (such as smart home, including security, appliances, wearables and other devices).

·
Emergence of new devices and applications (such as health and wellness wearable devices and applications).

Diversification of net sales and accounts receivable

During 2025, we sold products to approximately 170 customers throughout the world.

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. We continually evaluate our sales channels against our evolving markets and customers and realign them as necessary to ensure that we reach our existing and potential customers in the most effective and efficient manner possible.

U.S. Sales

We market our products throughout the U.S. using a variety of sales channels, including our own field sales management personnel, independent sales representatives and direct sales. Our U.S. independent sales representatives obtain orders on an agency basis, with shipments made directly to the customer by us. 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.

International Sales

International sales represented approximately 94%, 94%, and 90% of net sales in 2025, 2024 and 2023, respectively. 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. 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. We determine international sales by the international geographic destination into which the products are sold and delivered and include not only sales by foreign subsidiaries but also export sales from the U.S. to our foreign distributors and to our representatives’ customers. International sales do not include transfers between Data I/O and our foreign subsidiaries. Export sales are subject to U.S. Department of Commerce regulations. We have not, however, experienced difficulties to date as a result of these requirements. Our products typically do not require export licenses. We have not made sales to Iran or any Iranian governmental entities or any other blacklisted companies or countries.

Fluctuating exchange rates and other factors beyond our control, such as the coronavirus, international monetary stability, tariff and trade policies and U.S. and foreign tax and economic policies, may affect the level and profitability of international sales. We cannot predict the effect of such factors on our business, but we try to consider and respond to changes in these factors, particularly as the majority of our costs are U.S. based while the vast majority of our sales are international.

Competition

The competition in the programming systems market is fragmented with several companies selling directly competitive solutions. Our direct competition competes primarily based on price. Many of these competitors compete on a regional basis. Although competition in the security deployment market is developing, we expect competition in the market to increase as security deployment becomes more important. There are alternative security deployment solutions such as software-based security, rather than the hardware-based security of our SentriX equipment.

In addition, we compete with multiple substitute forms of device programming including “home grown” solutions. Programming after device placement may be done with In Circuit Test (“ICT”), In System Programming (“ISP”), and End of Line Downloading (“EOL”). Some automotive products may also be programmed over the air (“OTA”). IoT devices may also be programmed with ICT, ISP, EOL or OTA. 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 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. 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. 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. Most components used are available from a number of different suppliers and subcontractors but certain items, such as some handler and programmer and security deployment subassemblies, custom integrated circuits, hybrid circuits and connectors, are purchased from single sources. We believe that additional sources can be developed for most present single-source components without significant difficulties. Single-source components may not always continue to be readily available or may be subject to part shortage delays. If we cannot develop alternative sources for these components, or if we experience deterioration in relationships with these suppliers, there may be price increases, minimum order quantities, end of life purchase requirements, costs associated with integrating alternatively sourced parts, and delays or reductions in product introductions or shipments, which may materially adversely affect our operating results.

In accordance with industry practices, generally all orders are subject to cancellation prior to shipment without penalty, except for contracts calling for custom configuration. To date, such cancellations have not had a material effect on our sales volume. To meet customers’ delivery requirements, we manufacture certain products based upon a combination of backlog and anticipated orders. 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. The size of backlog at any date is not necessarily a meaningful indicator of the trend of our business.

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. Future growth is largely dependent upon the timely development and introduction of new products, as well as the development of technology and algorithms to support the latest programmable devices. Where possible, we may pursue partnerships and other strategic relationships to add new products, capabilities and services, particularly in security deployment. We are currently focusing our research and development efforts on strategic growth markets, including automotive electronics, IoT and security deployment. We are continuing to develop technology for manual and automated systems to program new categories of semiconductors, including Secure Elements, TPMs, Authentication Chips, and Secure Microcontrollers. We plan to deliver new programming technology, automated handling systems, factory automation communications software, and enhancements for security deployment in the manufacturing environment. We also continue to focus on increasing our capacity and responsiveness for new device support requests from customers and programmable integrated circuit manufacturers by revising and enhancing our internal processes and tools. Our research and development efforts have resulted in the release of significant new products and product enhancements over the past several years.

During 2025, the Company’s R&D efforts focused on the development and launch of the next-generation LumenX2 programming platform and LumenX2-M4 manual programmer, which were introduced at the productronica 2025 tradeshow in November 2025. The LumenX2 programming platform, with higher pin counts and increased power, significantly expands the breadth of device technologies supported, including microcontrollers, eMMC, UFS, SPI NOR flash, Secure Elements, and other device types. The R&D team has begun the systematic integration of artificial intelligence tools to accelerate programming algorithm development and device support.

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.

Finance and Administration

The Company began the implementation process of a new enterprise resource planning system, Acumatica, to replace the legacy IFS system. This initiative is part of the broader effort to optimize business operations and IT infrastructure. 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. The Acumatica implementation project remains on schedule with a target switchover date of July 1, 2026.

During 2025, the Company deployed artificial intelligence internally across all functional departments to accelerate operations and reduce costs. AI tools were applied to software engineering to accelerate programming algorithm development and device support, ERP implementation planning and data migration, customer support processes, legal documentation, and internal business operations. These capabilities enabled the Company to accomplish its transformation objectives faster than originally planned.

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. 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. The remediation and associated professional fees resulted in approximately $388,000 of one-time costs, primarily recorded in the third quarter. As an outcome of the incident, the Company’s IT systems and cybersecurity posture were strengthened, with improved corporate processes and enhanced security infrastructure.

Patents, Copyrights, Trademarks and Licenses

We rely on a combination of patents, copyrights, trade secrets and trademarks to protect our IP, as well as product development and marketing skills to establish and protect our market position and will continue to apply for and add new patents to our patent portfolio as we develop strategic new technologies.

We attempt to protect our rights in proprietary systems (architecture, implementations, software) including Lumen®X, FlashCORE, TaskLink, ConneX, SentriX and other software products, by retaining the title to and copyright of the software and documentation, by including appropriate contractual restrictions on use and disclosure in our licenses, and by requiring our employees to execute non-disclosure agreements. 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.

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. We believe that any exposure we may have regarding possible infringement claims is a reasonable business risk similar to that assumed by other companies in the electronic equipment and software 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, 2025, we were not subject to any pending actions regarding infringement claims.

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. Many of our employees are highly skilled, trained and experienced in specialized areas and our continued success will depend in part upon our ability to attract and retain employees who can be in great demand within the industry. None of our employees are represented by a collective bargaining unit and we believe relations with our employees are favorable. In foreign countries we have employment agreements or, in China, the Shanghai Foreign Services Co., Ltd. (“FSCO”) labor agreement. Because of the creation of specialized knowledge and skills in our business, there are extra short-term challenges to hiring and training replacements. Our hiring and retention strategies and efforts include emphasis on the advantages of working in a technology oriented, smaller, international, public company, and the culture of our organization. We utilize competitive pay practices, incentive compensation, equity awards, and benefits such as health care, life and disability insurance, paid time off, education and volunteer time.

Through the course of 2025 and early 2026, the Company has undertaken organizational changes to centralize the direction and management of business functions in its Redmond, Washington headquarters. The Company believes that this structure will enable a more consistent strategic focus, especially as the Company seeks to expand into adjacent segments of the data provisioning market and generally extend market reach.

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. 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. 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.

Executive Officers of the Registrant

During 2025, the Company underwent a significant transition in its financial leadership. Gerry Ng, who had served as Vice President and Chief Financial Officer since August 2023, departed the Company. Todd Henne served as interim CFO during the transition period. Effective August 11, 2025 as Vice President of Finance, and effective August 15, 2025 as an Executive Officer of the Company and the Company’s Vice President, Chief Financial Officer, Secretary and Treasurer. The leadership transition was part of a broader deliberate strengthening of the Board and executive suite to ensure the Company has the right team in place to execute its growth strategy.

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. 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. 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. 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.

Charles DiBona joined Data I/O on August 11, 2025 as Vice President of Finance, and effective August 15, 2025 as an Executive Officer of the Company and the Company’s Vice President, Chief Financial Officer (“CFO”), Secretary and Treasurer . Mr. DiBona brings extensive experience in financial leadership across public and private companies and equity research. He previously served as the Senior Equity Analyst covering Enterprise Software at Sanford C. Bernstein & Co., LLC. He then served as GM of Strategy and M&A in Microsoft’s Server and Tools Business (which subsequently became Microsoft’s Cloud + Enterprise division). Subsequently, he was CFO of Unify Square, Inc., a purveyor of unified communications monitoring and management solutions which was successfully sold to Unisys Corporation in 2021, and of LabVantage Solutions, Inc., a closely-held leader in the Laboratory Information Management space.