NASDAQ: MSAI

Through collaboration with several blue-chip multinational customers during development and deployment, we have validated high-value, mission-critical use cases across our target markets: distribution and logistics, manufacturing and data centers. These engagements have informed our product evolution and reinforced our belief that integrated, AI-enabled multi-sensor monitoring represents a structural shift in how industrial reliability and asset protection are managed.

Industry Background

Applied Infrared Technology

​As thermal imaging and sensing technology has grown in sophistication, and decreased dramatically in cost, it has been applied across numerous applications, such as production process monitoring, electrical equipment monitoring, industrial plant monitoring, early fire detection, pressure vessel monitoring, tank level monitoring, and liquid and gas leak detection. Many industrial operators are moving from intermittent, manual inspections to continuous monitoring that can surface early warning signals sooner. Our solution supports this shift by combining multi-sensor data with software insights and reliability expertise to detect anomalies early and guide response.

Continuous Monitoring and Data-Driven Insight

In industrial settings, thermal technology has historically been applied primarily through handheld devices in order to inspect equipment on a periodic basis. As thermal camera prices have decreased and computing and communications technology have advanced over the last two decades, there has been an increase in the use of fixed thermal sensing technologies to monitor critical assets on a continuous basis. Similarly, advancements in technology and declines in prices in acoustic imagers, vibration sensors, and other industrial sensors have made continuous multi-modal data monitoring economical and effective. By deploying thermal and other sensors in continuous monitoring applications, organizations have been able to minimize unplanned downtime and reduce process waste through enhanced predictive maintenance.

We believe we have been at the forefront of this movement towards using thermal imaging and other related sensing technology for continuous monitoring of critical assets. Most of the focus in the industry, historically, has been on the development of the sensing technology hardware itself in an effort to enhance accuracy and reliability. Having optimized fixed-mount hardware, we have shifted our focus towards the acquisition, storage and analysis of data through our proprietary software platform, MSAI Connect, available both as cloud-based subscription service and as an on-premises deployment (formally referred to as MSAI Edge).

Technology

Infrared Sensing Technology

Infrared is a portion of the electromagnetic spectrum that is adjacent to the visible spectrum but is invisible to the human eye due to its longer wavelengths. Unlike visible light, infrared radiation (or heat) is emitted directly by all objects above absolute zero in temperature. Thermal imaging systems detect this infrared radiation in an array of microbolometer pixels and convert individual temperature readings into an electronic signal, which is then processed for display as a video signal and/or analyzed by sophisticated software to conduct temperature data analysis. Thermal sensors provide several benefits over ubiquitous, visible, light-based sensing technologies, including the ability to measure temperature remotely and without touching the surface of the object, detect and image many types of otherwise invisible gases, observe in complete darkness, image through obscurants such as smoke and steam, detect and discriminate living beings from other sources of heat in an efficient and reliable way, and see over long distances with minimal atmospheric interference. For these reasons, we feel that the potential of our core technology to grow in prevalence and importance is significant.

Acoustic Imaging Technology

Audible and ultrasonic sounds across the mechanical wave spectrum have historically been detected and analyzed using single point microphones. Recently developed acoustic imaging technology combines an array of microphones surrounding a visible imaging sensor to both detect soundwaves and to estimate their source location within the camera’s field of view using sophisticated software. The software analysis of these soundwaves can then identify, quantify, and localize compressed air or gas leaks as well as partial electrical discharge in industrial equipment.

Vibration Monitoring Technology

Mechanical vibrations of industrial equipment can be monitored using piezoelectric or accelerometer-based vibration sensors. Vibration sensor data can then be analyzed by sophisticated software to identify mechanical anomalies based upon frequency and intensity of detected vibrations and their position on the asset being monitored.

Multi-Sensor Technology

Modern industrial environments are increasingly automated, interconnected, and operationally complex. As asset density rises and tolerance for disruption declines, single-sensor systems and periodic manual inspections may be insufficient to detect emerging risks across interconnected equipment and infrastructure. We believe these environments require integrated, multi-sensor monitoring approaches capable of continuously analyzing diverse data streams to identify early indicators of performance degradation or failure. Our integrated solutions leverage data generated from multiple sensor types and sensing modalities to protect our customers' most critical assets. We combine condition monitoring data with proprietary edge and cloud-based software to transform raw sensor inputs into actionable operational insights. These insights are designed to enable earlier intervention and more informed decision making which we believe can minimize unplanned downtime, reduce maintenance costs, mitigate the risk of catastrophic failures and extend asset life.

Products

Software

​MSAI Connect, our condition-based monitoring and early threat detection software platform, is available in both cloud-hosted and on-premises configurations. The platform utilizes continuous data inputs from strategically deployed sensor devices to monitor the health and performance of critical assets. MSAI Connect processes multi-sensor data in real time to surface early anomaly signals that may indicate developing mechanical or electrical degradation. MSAI Connect, when deployed and connected to the cloud, is a

subscription service and is contracted for a period of 12 to 48 months. MSAI Connect, when deployed on-premises, is sold as both a term-based software license, which generally provides access to the software for a period of 12 months, and as a perpetual license.

​MSAI Connect, when deployed on the cloud, runs on the Amazon Web Services platform and communicates bilaterally with one or more devices as well as with other cloud-hosted industrial data repositories via any suitable internet connection. MSAI Connect thereby receives and stores sensor data from our directly connected sensor devices and indirectly connected sensors communicating with our edge software via standard industrial communications protocols or other cloud-connected industrial sensor data repositories. In addition to receiving and storing this data, MSAI Connect provides a centralized monitoring dashboard that enables users to view live thermal and visual data streams, temperature trends, and anomaly alerts across multiple facilities. For customers operating geographically distributed sites, this capability supports standardized monitoring and earlier risk identification across their operational footprint.

​The MSAI Connect platform is distinguished by its capability to transmit radiometric image data, not only thermal imaging metadata and RGB video from the edge to the cloud. This radiometric capability enables the full analytical power of infrared cameras to be harnessed in the cloud as well as at the edge. This data enables vastly broader artificial intelligence and machine learning (“AI/ML”) capabilities, as models can be trained on radiometric data from large infrared datasets gathered from every camera connected at the edge. We expect this “big data” capability to be a significant advantage as we continue to develop transformative AI models.

Hardware

Our sensor hardware covers a broad range of the electromagnetic and mechanical spectrums, encompassing visible-light imagers, shortwave, midwave, and longwave infrared imagers, ultraviolet imagers, acoustic imagers, and tunable diode laser emitter-detector pairs for laser absorption spectrometry. While our sensor devices generally include an infrared imager as a core sensor technology, many of them are multi-sensor and include two or more of the aforementioned sensor devices. Sensor hardware is paired with our software to create customized solutions for predictive maintenance and is also sold on a standalone basis via our online store, www.infraredcameras.com.

Services

We offer installation services that cover on-site hardware mounting, sensor commissioning, and connectivity into the MSAI Connect platform. MSAI Solution Architects configure camera views and assist with establishing initial alerting thresholds and defining regions of interest so customers can quickly realize the full benefits of the MSAI Connect platform. We also perform calibrations and maintenance on hardware. We previously performed training through August 2025 and inspections through September 2025.

Roadmap and Development

​Over the past several years, we have been transitioning from a transactional sensor device provider into a subscription-based, integrated condition monitoring platform company. Our roadmap reflects this transformation. Rather than developing standalone hardware products, we now design and deploy coordinated device, edge, data hub, and cloud software capabilities that operate as a unified system to address complex industrial reliability challenges.

Hardware Development

Our hardware roadmap is focused on expanding and enhancing our multi-sensor portfolio to support broader industrial use cases and higher-performance environments. Development efforts prioritize:

•sensors with improved sensitivity, resolution, and durability;

•cost-efficient designs that support scalable deployment models; and

•expanded sensing modalities to enable multi-dimensional asset intelligence.

This approach supports our transition toward integrated subscription-based deployments in which hardware operates as a data acquisition layer within a broader software-driven intelligence platform.

Platform and Software Development

​Our platform and software roadmap is centered on transforming sensor data into automated, scalable insights. Development priorities include:

•Integration of new sensor modalities into a unified data architecture

•Incorporation of radiometric and multi-sensor data into advanced analytical and AI-driven anomaly detection models

•Expansion of automated notification channels and workflow integrations

•Continuous refinement of system architecture to improve performance, reliability, and cost efficiency

We are focused on evolving from alert-based monitoring toward increasingly predictive and prescriptive capabilities that embed operational expertise directly into the platform.

Product Enablement and Governance

To support this platform evolution, we have established a dedicated product enablement function comprised of sales, marketing and engineering representatives. This group provides structured portfolio governance, disciplined prioritization, and cross-functional alignment across product management, engineering, reliability expertise, and commercial teams. Product enablement is designed to ensure that roadmap investments are aligned with validated customer use cases, scalable subscription economics, and measurable operational outcomes. We believe this disciplined, platform-oriented development approach positions us to expand across automation-intensive industries and to support the broader industry shift from intermittent inspection models to continuous, AI-enabled condition intelligence.

Market Opportunity

Overall Market Opportunity

Our early threat detection and condition-based monitoring solution, centered on the MSAI Connect platform and supported by integrated hardware has application across a range of automation-intensive and infrastructure-driven industries. As organizations increasingly adopt continuous, data-driven maintenance and reliability strategies to reduce unplanned downtime and safety risk, we believe meaningful market opportunities exist for our platform in the sectors we target.

During the year, we realigned our market strategy to focus on the industries and countries where we believe the largest opportunity exists for our current platform offerings. These industries include distribution and logistics, manufacturing, and data centers in the United States, Canada, European Union member states and the United Kingdom. This realignment resulted in the deprioritization of certain industries, products, and services. Regarding industries, we have deprioritized oil and gas and metals and mining, where the applications generally require specialized sensors and customized solutions to handle the often-harsh environmental conditions in which monitoring is being performed. Regarding products, we made the strategic decision to cease marketing, development, and sale of drone related product offerings given the high degree of customization required and limited overlap with our software platform. Regarding services, we discontinued offering training and inspection related services which were ancillary to our core offerings. We believe this realignment will allow us to focus on our core competencies and offerings and position us for success in 2026.

We estimate the total addressable market (“TAM”) in these target markets based on a combination of the total number of estimated potential customers and facilities in each market, our expectations regarding the scope of potential uses of our predictive maintenance and reliability platform in those markets, and our estimates of average selling prices in those markets and potential opportunity for our platform to increase the utility of maintenance and reliability programs.

Our TAM calculations are based on third-party industry and governmental sources estimating the total number of facilities in the United States, Canada, European Union member states, and the United Kingdom. These facilities include distribution and fulfillment centers, commercial airports, data centers, food and beverage manufacturing plants, automobile manufacturing facilities, and EV charging infrastructure. These calculations were made with several assumptions and limitations, applied consistently across all three target markets. Specifically, these assumptions and limitations include:

●We evaluated data regarding facilities located within the United States, Canada, European Union member states, and the United Kingdom. Our assumption regarding target countries may deviate from the location of future installations and the Company may operate in other countries not considered in this analysis in the near or long term.

●Our calculations did not assume any market opportunities for secondary industries where we may have active deployments, use cases or pilots. Our target industries may change and industries may be reprioritized based on the development of our solutions and commercial traction achieved.

●Data sourced and utilized in the analysis was as of a point in time, which may differ between sources and data points. We did not make any assumptions about future potential growth or reduction of facilities from the point in time data obtained.

Based on our commercial experience and estimates of the number of critical assets, sensor coverage, and expected return on investment of individual use cases per facility, we estimated how many of our multi-sensor systems could be deployed across these facilities. We estimate that the TAM in our target markets was approximately $9.0 billion in 2025, consisting of $6.6 billion in hardware sales and $2.4 billion in software and service sales annually. Our market share in each of our three target markets represented less than 0.1% penetration of the estimated TAM in 2025.

There are risks inherent to selling into each of these target markets. Please see Part I, Item 1A, “Risk Factors — Risks Related to Our Business and Industry” and “Risk Factors — Risks Related to Our Products” for a more detailed discussion of the risks applicable to the adoption of our hardware and software products in each of the three target markets.

Distribution and Logistics Market Opportunity

We believe the distribution and logistics TAM in 2025 was approximately $3.9 billion. This TAM includes conveyor system anomaly detection, hotspot detection, process automation, predictive maintenance, and failure avoidance, among other applications. Demand is expected to be driven by financial incentives related to process improvements and increased regulations pertaining to facility safety.

Manufacturing Market Opportunity

We believe the manufacturing TAM in 2025 was approximately $2.7 billion. This includes process monitoring and control, predictive maintenance, electrical panel monitoring (sub-grid scale), production motor drives, early fire detection, and electrified transport battery monitoring, among other applications. We expect demand to be driven by continued commercial adoption of data-driven predictive maintenance and manufacturing processes.

Data Center Market Opportunity

We believe the data center TAM in 2025 was approximately $2.4 billion. This market includes monitoring and management solutions for backup power generators, liquid cooling systems, battery backup (UPS) infrastructure, and critical power distribution, among other applications. These systems support the reliability and efficiency of increasingly complex data center environments. Demand is expected to be driven by the rapid growth of hyperscale and AI-driven computing workloads, increased power density per rack, and the need for real-time monitoring and predictive maintenance to ensure uptime, optimize energy usage, and reduce the risk of failures in critical infrastructure.

Customers

We primarily target customers in the distribution and logistics, manufacturing and data center markets. For the year ended December 31, 2025, one customer in the distribution and logistics market accounted for 36% of total net revenue. No other customer accounted for more than 10% of total net revenue.

Distribution and Logistics

Our customers in the distribution and logistics market are generally engaged in the maintenance and upkeep of e-commerce and retail distribution centers, couriers and express parcel hubs and their material-handling equipment assets. This includes conveyor systems, transportation and machinery, and electrical infrastructure. Traditionally, target users include mechanical engineers and maintenance and facilities professionals. We believe that our data-driven solutions will expand the user base to include operations and safety executives, process engineers, and other process-oriented leaders.

Manufacturing

Our customers in the manufacturing market primarily include automotive and vehicle manufacturers, chemical and paper manufacturers, and aerospace and defense manufacturers. Our target users in the manufacturing market traditionally include mechanical engineers and facilities and maintenance professionals. As our software solutions continue to evolve, we are increasingly targeting process design, safety, and operational leaders whose priorities involve process waste reduction, enhanced safety protocols, and improved quality of manufacturing outputs.

Data Centers

Our customers in the data center market include operators responsible for maintaining uptime across power distribution and cooling infrastructure. Target users include facilities managers, reliability engineering teams, and infrastructure operations leaders responsible for electrical panels, switchgear, uninterrupted power supply systems, cooling equipment and pumps, and backup power assets. In these environments, continuous monitoring supports earlier identification of developing electrical or thermal anomalies or liquid leaks that could otherwise escalate into outages or safety incidents.

Our Competitive Strengths

We believe the following strengths will allow us to scale our position as a condition monitoring and early threat detection platform.

Proprietary SaaS Technology

We have developed what we believe to be a proprietary platform, MSAI Connect, designed to unify data from multiple sensor types into a single platform to support earlier anomaly detection and more consistent response workflows. This proprietary platform allows users to identify failure points and patterns to inform safety protocols, enhance predictive maintenance to minimize unplanned downtime, and improve manufacturing processes. We believe our SaaS platform represents a significant opportunity to continue to convert our legacy enterprise customers (which we define as Fortune 1000 companies, government agencies and academic institutions, with revenues of greater than $5 million), to a recurring revenue model presented by our software solution. As our platform capabilities expand, we believe our target applications, use cases, and points of differentiation in the marketplace will similarly expand.

Leading Sensor Platform

Our sensor platform utilizes precise device sensor technology coupled with software to drive low-cost customization. With this combination, we expect to develop new innovative solutions for industry-specific applications, expanding our product offering without requiring significant manufacturing or inventory changes. Our system architecture is intentionally modular and extensible, allowing for the integration of sensing modalities developed internally and by third parties.

Diversified Applications

We believe that the diversity of applications in which our technology can be applied in our target markets gives us several advantages. We believe our early entrance into these markets with our MSAI Connect platform will enable us to gain expertise, informing our product development decisions so that we may more effectively customize our solutions for customers’ needs. We also believe that our early entrance into our target markets affords us an advantageous opportunity to establish strong relationships globally with key customers in each market.

Our Growth Strategies

Our goal is to increase our sales by expanding the market for multi-sensor condition-based monitoring across automation-intensive environments. In order to achieve that goal, key elements of our growth strategy include:

Increase Investment in SaaS Solution

We intend to expand investment in our MSAI Connect software platform as a core driver of recurring revenue growth and long-term customer value. Our platform is currently deployed with several blue-chip customers across our target markets, providing a foundation for expanded software-based offerings layered on top of installed sensor infrastructure.

We believe the opportunity to increase software attachment rates across our existing installed base, as well as to introduce new SaaS modules addressing evolving reliability and operational use cases, represents a meaningful avenue for revenue expansion. By integrating multi-sensor data into a unified intelligence layer, our SaaS offerings are designed to deliver anomaly detection, workflow integration, and increasingly predictive capabilities that extend beyond device-level monitoring.

Our strategy includes continued investment in software development, AI-driven analytics, system scalability, and cloud architecture optimization to support subscription-based deployments. Through disciplined product governance and customer-driven roadmap prioritization, we aim to deliver software capabilities that deepen customer engagement, increase recurring revenue per site, and enhance the long-term economic profile of our platform.

Execute On Our Product Roadmap

We prioritize disciplined innovation and structured product development to maintain and extend our competitive position across our target markets. Our roadmap is designed to expand the capabilities of our integrated hardware and software platform while aligning development investments with validated customer use cases and scalable subscription opportunities.

We believe the performance characteristics of our thermal sensing technology, combined with the modular and extensible architecture of our MSAI Connect software platform, position us to broaden the range of reliability and safety applications we support. By integrating additional sensing modalities, enhancing AI-driven analytics, and refining system architecture, we aim to deliver increasingly predictive and workflow-integrated solutions that address complex, automation-intensive environments.

Our product execution strategy is supported by structured portfolio governance and cross-functional alignment across engineering, reliability expertise, and commercial teams. This approach is intended to accelerate time-to-market, ensure capital-efficient development, and expand the addressable use cases for our platform across our target markets.

Grow Wallet Share with Legacy Enterprise Customers

We maintain relationships with established enterprise customers across our target markets and believe these relationships represent a meaningful opportunity for expansion. As customers progress from initial hardware deployments to broader, multi-site implementations and adopt our MSAI Connect SaaS platform, we believe we can increase recurring revenue per customer and deepen platform integration within their operations.

Our expansion strategy focuses on increasing software attachment rates, broadening the number of monitored assets and facilities, and introducing additional sensing and analytics capabilities over time. As customers embed our solutions into their operational workflows, we believe this can strengthen long-term retention, improve visibility into enterprise-wide reliability needs, and create opportunities for incremental solution deployment. We also expect that collaboration with enterprise customers will continue to inform our product roadmap and use-case prioritization, enabling more targeted development investments aligned with real-world operational requirements.

The ultimate sale of additional devices and software subscriptions, the pace and scale of multi-site deployments, and customer expansion timelines are subject to risks and uncertainties, including those described in Part I, Item 1A “Risk Factors” of this Annual Report.

Expand Our Distribution Network

While the majority of our sales are generated through direct engagement with customers, we also utilize a network of strategic channel and distribution partners to extend our market reach. We believe these partnerships enable us to access additional end customers, geographic regions, and industry verticals in a capital-efficient manner while maintaining operational focus.

Our channel strategy is designed to complement our direct sales efforts by leveraging partners with established customer relationships, technical expertise, and localized support capabilities. We intend to expand our existing network and establish new distribution partnerships in markets and verticals where we believe indirect channels can accelerate customer acquisition and deployment scale.

As customer relationships mature and account complexity increases, we may elect to engage more directly with certain strategic accounts to support expanded deployments, deeper solution integration, and enterprise-level coordination. We believe this hybrid direct-and-channel approach provides flexibility to optimize growth, customer engagement, and long-term account value.

Pursue Strategic Acquisitions

We may pursue selective strategic acquisitions that complement our technology platform, expand our capabilities, or enhance our access to target markets, provided such opportunities align with our long-term growth strategy and capital allocation framework. Potential acquisition targets may include companies that add differentiated sensing technologies, advanced analytics or AI capabilities, domain-specific expertise, or established customer relationships in adjacent verticals. We believe thoughtfully integrated acquisitions could broaden the range of use cases supported by our platform, accelerate entry into new markets, strengthen recurring revenue opportunities, or enhance our competitive positioning.

A pursued acquisition would be subject to rigorous evaluation of strategic fit, financial return profile, integration complexity, and long-term shareholder value creation. Any acquisition activity is subject to risks and uncertainties, including those described in Part I, Item 1A “Risk Factors” of this Annual Report.

Manufacturing

We leverage our years of expertise in infrared and related sensors and devices to design, develop, and source a variety of engineered products. We are transitioning our flexible manufacturing strategy toward greater use of contract manufacturing with third parties for both high-volume and an expanding portion of lower-volume specialized products, and correspondingly reducing our reliance on in-house manufacturing activities. For the remaining in-house manufacturing operations, we purchase many pre-assembled subcomponents, including certain detectors, coolers, optics, and other sensors, which are then assembled into finished systems, calibrated, and tested at our primary production facility in Beaumont, Texas, where we also apply our calibration processes as part of final assembly across both internal and outsourced production.

Competition

The global market for infrared sensing devices is highly competitive and well established with large scale manufacturers, such as Teledyne FLIR, selling primarily into military and commercial applications. Newer and lower-cost manufacturers, both domestic and overseas, have made inroads into the sensor market in recent decades, contributing to a meaningful decline in sensing device prices as well as an expansion of device capabilities. This in turn has led to new end market applications for which infrared sensing devices are a useful and cost-effective solution.

We believe that our infrared sensors are competitive in this current market, as we offer high resolution and accuracy at an attractive price, and we offer differentiated device form factors, including multi-sensor devices. While we expect our product costs to continue to decline and our functionality to continue to increase, we have faced and will continue to face competition from existing competitors and new entrants both on a cost and functionality basis.

The market for software and turn-key solutions that support multiple sensor modalities is even less mature, as complete solutions have either been “Build-Your-Own” or installed by integrators. We have established a differentiated position in the market providing a turn-key predictive maintenance and reliability platform for specific end markets. Although we believe our technology is class-leading and that our continued innovation will support our position, we have faced and will continue to face competition from existing competitors and new companies, as well as the potential for customers to develop their own end-to-end sensing solutions.

We believe our competitive landscape varies somewhat across our target markets. In distribution and logistics, we mainly compete with large scale manufacturers of handheld sensor devices that provide on-device thermal image display and basic on-device software. In manufacturing, we generally compete with handheld sensor devices offered by large scale manufacturers as well as fixed camera solutions installed by industry-specialist consultants and integrators that source and install sensor devices from large scale manufacturers and offer limited software solutions without cloud or AI/ML feature sets. With regards to the data center market, given the fast pace of innovation and development, competition is quickly evolving but generally fractionalized to specific use cases and failure points.

Sales and Marketing

We are focused on expanding our sales and marketing capabilities to drive customer acquisition, increase software attachment, and grow recurring revenue from both new and existing accounts. Our global sales organization primarily engages customers directly, particularly in enterprise and strategic accounts, and is structured to combine technical domain knowledge with consultative solution selling. Members of our sales team are trained to understand customer reliability challenges, operational value drivers, and deployment economics across our target markets.

In addition to direct sales, we maintain a network of active distributors and strategic channel partners who support regional coverage, installation, and localized customer engagement. This hybrid model enables us to balance customer engagement with scalable geographic reach. We intend to further optimize and expand our channel ecosystem to enhance coverage across priority regions and verticals while maintaining a direct involved with strategically significant accounts.

Our marketing approach is targeted and data-driven, designed to engage decision-makers in automation-intensive and mission-critical industries. We produce and distribute digital content—including technical resources, case studies, webinars, and educational materials—to demonstrate use-case value and accelerate customer understanding of multi-sensor condition monitoring. We leverage an integrated technology stack, including customer relationship management systems, marketing automation platforms, and account-based marketing tools, to support pipeline visibility, campaign optimization, and coordinated sales engagement.

We also pursue thought-leadership initiatives through participation in industry conferences, executive forums, and sector-specific events. These engagements support brand credibility, reinforce our technical differentiation, and generate incremental customer interest across our target markets.

Research and Development

We have invested significant resources into research and development of our integrated multi-sensor platform, including advancements in sensing technologies, edge processing, cloud architecture, and AI-driven analytics. We believe our long-term success depends in large part on our ability to translate emerging sensing and analytical capabilities into scalable, subscription-based solutions that address complex reliability and safety challenges across our target markets.

We have established a dedicated product enablement function comprised of sales, marketing and engineering representatives responsible for aligning customer feedback, industry trend analysis, and technical innovation with our product roadmap. This group collaborates directly with enterprise customers to evaluate evolving reliability challenges and assess emerging automation, AI, and sensing trends across our target markets. Insights derived from these engagements inform structured portfolio prioritization and capital allocation decisions.

Raw Materials

We depend on a number of suppliers in China for certain component parts and equipment containing raw materials, including but not limited to gallium and germanium, used in critical stages of our manufacturing processes. We use purchase contracts as well as discrete purchase orders to ensure our supply of component parts utilizing raw materials. Our suppliers are located around the world and can be subject to constraints beyond our control that may limit supply. We believe our current supply of essential materials is sufficient to meet our needs. However, shortages have occurred from time to time and could occur again.

Government Regulation

Any new or expanded laws or regulations, shifting approaches in the enforcement of existing laws or regulations, or changes in global, political, regulatory and economic conditions affecting trade, manufacturing, development or investment, could result in additional restrictions on our ability to conduct our business and, in turn, could impact our financial position and results of operations. For additional information on regulations applicable to our business, see Part I, Item 1A “Risk Factors — Risks Related to Our Regulatory Compliance.”

The laws governing exportation of our thermal imaging technology vary from country to country and product to product. Exporting our thermal cameras, infrared cameras, or infrared sensors to certain countries may be restricted by the United States Government’s thermal camera export restrictions and many fall under International Traffic in Arms Regulations (“ITAR”). All ITAR items are designated by the U.S. Department of State. Some of MSAI’s thermal cameras fall under specific Export Control Classification

Number (“ECCN”) codes. ECCN items are governed by the U.S. Department of Commerce Bureau of Industry and Security. Likewise, most but not all of MSAI’s thermal cameras also have Commodity Jurisdiction codes. We believe that depending on the sensor size and pixel count, MSAI can export many of its thermal imaging cameras to most non-U.S.-embargoed countries (particularly to signatories of the Wassenaar Agreement) without restriction. Other countries can receive thermal imaging cameras with restrictions and proper licensing and documentation.

We are subject to federal, state and local laws and regulations related to environmental protection and worker health and safety. For example, the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and comparable state laws may impose strict, joint, and several liability without regard to fault or the legality of the original conduct on certain classes of persons that contributed to the release of a hazardous substance into the environment. These persons include the current and former owners and operators of the site where the hazardous substance release occurred and any company that transported, disposed of, or arranged for the transportation or disposal of the hazardous substance released at the site. Additionally, the Occupational Safety and Health Act (“OSHA”) and comparable state laws strictly govern the protection of the health and safety of employees. The OSHA hazard communication standard, the EPA community right-to-know regulations under Title III of CERCLA, and similar state statutes require that we organize and, as necessary, disclose information about hazardous materials used or produced in our operations to various federal, state, and local agencies, as well as to employees. We may be required to obtain permits and approvals under such laws for our operations, and any failure to obtain or delay in obtaining such permits and approvals could have an adverse impact on our operations, financial position and result of operations.

Intellectual Property

We own and control various intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names, and copyrights. We do not expect the expiration or termination of the foregoing to have a material adverse effect on our business, results of operations or financial condition.

Employees

As of December 31, 2025, we employed a total of 21 people, all of whom are employed on a full-time basis, in the United States. We also engage numerous consultants and contractors to supplement our permanent workforce. None of our employees are represented by a labor union or covered by collective bargaining agreements. We believe we have strong and positive relations with our employees.

Properties

Our corporate headquarters is located in Houston, Texas where we rent private office space in a co-working facility. Our office space is rented pursuant to a one-year agreement which expires on December 31, 2026. We also lease a facility, approximately 5,000 square feet, in Beaumont, Texas pursuant to a one-year agreement which expires December 31, 2026. Our Beaumont facility contains engineering, manufacturing, research and development and administrative personnel and stores most of our inventory.

We believe that our office and warehouse space is adequate for our current needs and, should we need additional space, we believe we will be able to obtain additional space on commercially reasonable terms. We expect to be able to extend both agreements prior to their expiration on commercially reasonable terms should the space continue to align with the Company’s location and office strategy.

Corporate Information

Prior to the Business Combination, the registrant was a blank check company incorporated as a Delaware corporation on May 14, 2021, originally formed for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization, or other similar business combination with one or more businesses or entities. In connection with the Merger, Legacy SMAP changed its name to “Infrared Cameras Holdings, Inc.” The registrant subsequently changed its name to MultiSensor AI Holdings, Inc. on February 9, 2024.

Available Information

In accordance with the Exchange Act, we file electronically with the Securities and Exchange Commission (the “SEC”) our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and other information. Our SEC filings are available to the public on the SEC’s website at www.sec.gov, and we make available on our website at www.multisensorai.com, free of charge, copies of these reports as soon as reasonably practicable after filing or furnishing these reports with the SEC. The information on any of our websites is deemed not to be incorporated in this Annual Report on Form 10-K or to be part of this Annual Report on Form 10-K.