TRANSACT TECHNOLOGIES INC

Previous wording

TransAct is a global leader in developing and selling software-driven technology and printing solutions forlarge and emerging markets including food service technology, point of sale (“POS”) automation and casino and gaming. Our world-class products are designed from the ground up based on market and customer requirements and are sold under the BOHA!™, AccuDate™, Epic, EPICENTRAL®, and Ithaca® brand names. During 2019, we launched a new line of products for the food service technology market, the BOHA! hardware solutions and companion branded suite of cloud-based applications. The BOHA! software and hardware products help restaurants, convenience stores and food service operators of all sizes automate the food production in the back-of-house operations. Known and respected worldwide for innovative designs and real-world service reliability, our thermal printers and terminals generate top-quality labels, coupons and transaction records such as receipts, tickets and other documents. We sell our technology to original equipment manufacturers (“OEMs”), value-added resellers, and select distributors, as well as directly to end users. Our product distribution spans across the Americas, Europe, the Middle East, Africa, Asia, Australia, New Zealand, the Caribbean Islands and the South Pacific. We also offer world-class service, support, labels, spare parts, accessories and printing supplies to our growing worldwide base of products currently in use by our customers. Through our TransAct Services Group (“TSG”), we provide a complete range of supplies and consumables used in the printing activities of customers in the restaurant and hospitality, retail, casino and gaming, and government markets. Through our webstore, www.transactsupplies.com, and our direct selling team, we address the demand for these products. We operate in one reportable segment: the design, development, and marketing of software-driven technology and printing solutions forlarge and emerging markets, and provide related services, supplies and spare parts. The Company’s chief operating decision makers, who are the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, utilize a consolidated approach to assess the performance of, and allocate resources to, the business. Accordingly, management has concluded that the Company consists of a single operating segment and single reportable segment for accounting and financial reporting purposes.

Current wording

TransAct is a global leader in developing and selling software-driven technology and printing solutions for large and emerging markets including food service technology (“FST”), point of sale (“POS”) automation and casino and gaming. Our world-class products are designed from the ground up based on market and customer requirements and are sold under the BOHA!™, AccuDate™, Epic, EPICENTRAL®, and Ithaca® brand names. During 2019, we launched a new line of products for the food service technology market, the BOHA! hardware solutions and companion branded suite of cloud-based applications. The BOHA! software and hardware products help restaurants, convenience stores and food service operators of all sizes automate the food production in the back-of-house operations. Known and respected worldwide for innovative designs and real-world service reliability, our thermal printers and terminals generate top-quality labels, coupons and transaction records such as receipts, tickets and other documents. We sell our technology to original equipment manufacturers (“OEMs”), value-added resellers, and select distributors, as well as directly to end users. Our product distribution spans across the Americas, Europe, the Middle East, Africa, Asia, Australia, New Zealand, the Caribbean Islands and the South Pacific. We also offer world-class service, support, labels, spare parts, accessories and printing supplies to our growing worldwide base of products currently in use by our customers. Through our TransAct Services Group (“TSG”), we provide a complete range of supplies and consumables used in the printing activities of customers in the restaurant and hospitality, retail, casino and gaming, and government markets. Through our webstore, www.transactsupplies.com, and our direct selling team, we address the demand for these products. We operate in one reportable segment: the design, development, and marketing of software-driven technology and printing solutions for large and emerging markets, andthe provision of related services, supplies and spare parts. The Company’s chief operating decision maker, consisting of the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, utilizes a consolidated approach to assess the performance of, and allocate resources to, the business. Accordingly, management has concluded that the Company consists of a single operating segment and single reportable segment for accounting and financial reporting purposes.

Previous wording

After strong demand during most of 2023 due in part to our primary competitor’s struggle to deliver products in the face of supply chain constraints, in late 2023, we began to see indications of a temporary slowdown in demand in the casino and gaming market, as customers that had built up excess inventory due to supply chain concerns advised us that they would temporarily reduce orders until their stock normalized. This slowdown impacted our results in the fourth quarter of 2023 and during the year ended December 31, 2024. As of June 30, 2025, we believe all significant domestic customers have been able to sell through their on-hand inventory and have resumed ordering again. As a result, we have seen, and expect to continue to see, a return to more normalized casino and gaming sales levels in 2025. However, we continue to monitor the potential impact of any price increases resulting from recent tariff actions on casino and gaming sales levels during 2025, such as the potential increase in advance orders from customers seeking to avoid such price increases, which could result in decreased demand in future periods.

Current wording

After strong demand during most of 2023 due in part to our primary competitor’s struggle to deliver products in the face of supply chain constraints, in late 2023, we began to see indications of a temporary slowdown in demand in the casino and gaming market, as customers that had built up excess inventory due to supply chain concerns advised us that they would temporarily reduce orders until their stock normalized. This slowdown impacted our results in the fourth quarter of 2023 and during the year ended December 31, 2024. As of September 30, 2025, we believe all significant domestic customers have been able to sell through their on-hand inventory and have resumed ordering again. As a result, we have seen a return to more normalized casino and gaming sales levels during the first nine months of 2025. However, we continue to monitor the potential impact ofmacroeconomic factors as well asany price increases resulting from recent tariff actions on casino and gaming sales levels.

Previous wording

We are currently dependent upon a manufacturer located in Thailand for the manufacturing and assembly of substantially all of our printers and terminals. During 2025, the U.S. governmenthas announced a variety of trade-related actions, including the imposition of tariffs onimports from several countries, including Thailand. Inresponse, many countries announced their own retaliatory tariffs. Certain tariffs were paused for a period of time buthave not been withdrawn, while others have been revised.

Current wording

We are currently dependent upon a manufacturer located in Thailand for the manufacturing and assembly of substantially all of our printers and terminals. During 2025, the U.S. government has announced a variety of trade-related actions, including the imposition of tariffs on imports from several countries, including Thailand. In response, many countries announced their own retaliatory tariffs. Certain tariffs were paused for a period of time but have not been withdrawn, while others have been revised.

Previous wording

On July 30, 2025, the U.S. government announced that an agreement was made with Thailand toestablish a U.S. tariffof 19% on goods imported from Thailand effective August 7, 2025.

Current wording

On July 30, 2025, the U.S. government announced that an agreement was made with Thailand to establish a U.S. tariff of 19% on goods imported from Thailand, effective August 7, 2025. On October 26, 2025, the U.S. government and Thai government issued a joint statement announcing a Framework for an Agreement on Reciprocal Trade, pursuant to which, among other things, the U.S. has agreed to maintain a tariff of 19% on goods imported from Thailand, as set forth in Executive Order 14257 issued April 2, 2025, as amended, with certain products eventually to be identified for a 0% tariff rate.

Previous wording

We expect that these tariffs will impact certain goods thatare assembled and imported into the United States from our manufacturer in Thailand. The majority of raw components used in the manufacturing and assembly of our printers and terminals are sourced locally in Thailand, and to a lesser extent, from other countries in the region, including China. As a result, we currently have a limited ability to mitigate theexpected impact of tariffs on goods sold into the United States through alternative sourcing or manufacturing. We currently plan to mitigate these tariffs by raising prices to customers, but there can be no assurance that we will be able to pass on all tariff costs to customers via price increases.

Current wording

These tariffs impact certain goods that are assembled and imported into the United States from our manufacturer in Thailand. The majority of raw components used in the manufacturing and assembly of our printers and terminals are sourced locally in Thailand, and to a lesser extent, from other countries in the region, including China. As a result, we currently have a limited ability to mitigate the expected impact of tariffs on goods sold into the United States through alternative sourcing or manufacturing. We currently mitigate these tariffs by raising prices to customers, but there can be no assurance that we will be able to pass on all tariff costs to customers via price increases.

Previous wording

While tariffs did not materially impact our results for the first six months of 2025, we expect the 19% tariffmay impact our financial results going forward. It is uncertain whether other countries will continue to seek further negotiations or retaliate as future developments occur, or whether the U.S. government will reconsider or adjust tariffs based upon continued future negotiations, or grant further exemptions. The Company continues to monitor the rapidly evolving and uncertain tariff and global trade environment and the potential impacts to its Consolidated Financial Statements.

Current wording

While tariffs did not materially impact ournet income for the third quarter of 2025 and the first nine months of 2025, we expect the 19% tariff will impact our financial results going forward. There can be no assurance that future price increases and other mitigation efforts will be successful in offsetting future tariffs. In addition, it is uncertain whether other countries will continue to seek further negotiations or retaliate as future developments occur, or whether the U.S. government will reconsider or adjust tariffs based upon continued future negotiations, or grant further exemptions, and what types of products will be eligible for such exemptions, if granted. The Company continues to monitor the rapidly evolving and uncertain tariff and global trade environment and the potential impacts to its Consolidated Financial Statements.

Previous wording

We began a cost reduction initiative in the second quarter of 2024 focused largely on reducing employee headcount and other external third-party resources. Savings from this initiative were realized beginning in the third quarter of 2024 and are expected to be approximately $2 million on an annualized basis. We expect these savings tocontinue tobe realized in 2025. However, we expect these operating expense savings in 2025 will be more than offset by typical annual inflationary and cost of living increasesas well as higher incentive and stock-based compensation expected from improved results compared to 2024. Our cash flow and liquidity also benefited during the first half of 2025 from a successful inventory reduction initiative which reduced our inventory levels by approximately $3.2 million from December 31, 2024. We do not expect any further reduction in our inventory level for the remainder of 2025.

Current wording

We began a cost reduction initiative in the second quarter of 2024 focused largely on reducing employee headcount and other external third-party resources. Savings from this initiative were realized beginning in the third quarter of 2024 and are expected to be approximately $2 million on an annualized basis. We expect these savings to continue to be realized infiscal 2025. However, we expect these operating expense savings in 2025 will be more than offset by typical annual inflationary and cost of living increases as well as higher incentive andshare-based compensation expected from improved results compared to 2024. Our cash flow and liquidity also benefited during the first nine months of 2025 from a successful inventory reduction initiative which reduced our inventory levels by approximately $4.4 million from December 31, 2024 to September 30, 2025. We do not expect any further reduction in our inventory level for thefourth quarter of 2025.

Previous wording

Net sales for the second quarter of 2025 increased $2.2 million, or 19%, compared to the second quarter of 2024. Printer, terminal and other hardware unit sales volume increased 21% to approximately 26,300 units, due primarily toa 40% unit sales volume increase in the casino and gaming market anda 41% unit sales volume increase in FST hardware, somewhat offset by a 46% decrease in unit sales volume in the POS automation market. For more information about the sales volume changes described above, please refer to the results of operations for each of our markets discussed further below. The average selling price of our printers, terminals and other hardware was up 5% in the second quarter of 2025 compared to the second quarter of 2024, due in part to increased costs resulting from U.S. tariffs imposed on our products assembled in Thailand, which have been passed on to our customers. FST software, labels and other recurring revenue increased $183 thousand, or 7%, in the second quarter of 2025 compared to the second quarter of 2024.

Current wording

Net sales for the third quarter of 2025 increased $2.3 million, or 21%, compared to the third quarter of 2024. Printer, terminal and other hardware unit sales volume increased 18% to approximately 24,300 units, due primarily toa 60% unit sales volume increase in the casino and gaming market, offset bya 29% unit sales volume decrease in FST hardware and a 65% decrease in unit sales volume in the POS automation market. For more information about the sales volume changes described above, please refer to the results of operations for each of our markets discussed further below. The average selling price of our printers, terminals and other hardware was up 9% in the third quarter of 2025 compared to the third quarter of 2024, due to normal inflationary increases and increased costs resulting from U.S. tariffs imposed on our products assembled in Thailand, which have been passed on to our customers. FST software, labels and other recurring revenue increased $382 thousand, or 13%, in the third quarter of 2025 compared to the third quarter of 2024.

Previous wording

International sales for thesecond quarter of 2025 decreased $464 thousand, or 17%, from the same period in 2024 due primarily to lower sales in our casino and gaming market.

Current wording

International sales for the third quarter of 2025 increased $467 thousand, or 21%, from the same period in 2024 due primarily to increased sales in our casino and gaming market.

Previous wording

Food service technology (“FST”). Our primary offering in the FST market is our line of BOHA! products. The BOHA! product suite combines our latest generation terminal or workstation, which includes one or two printers, with our BOHA! labeling, timers, and media software. In addition, customers may individually purchase cloud-based software applications for our Terminal or Workstation that connect to an application on a separate mobile device into a solution to automate back-of-house operations in restaurants, convenience stores and food service operations. The additional software offering of BOHA! consists of a variety of individually purchased software-as-a-service (“SaaS”)-based applications for both Android and iOS operating systems, including applications for temperature monitoring, temperature taking and checklists and task lists. These applications are sold separately, and customers purchase the applications they need for their back-of-house operations. Customers may also purchase associated hardware, such as tablets, temperature sensors and gateways. The BOHA! Terminal and the more recently launched Terminal 2 combine an operating system and hardware components in a single touchscreen device with one or two thermal print mechanisms that print easy-to-read food rotation labels, grab-and-go labels, nutritional labels for prepared foods, and “enjoy by” date labels. The BOHA! WorkStation uses an iPad or Android tablet instead of an integrated touchscreen. The BOHA! Terminal, Terminal 2 and WorkStation are equipped with the TransAct Enterprise Management System to ensure that only approved touchscreen functions are available on the device and to allow over-the-air updates to the operating system. BOHA! helps food service establishments and restaurants (including fine dining, casual dining, fast casual and quick-service restaurants (“QSRs”), convenience stores, hospitality establishments and contract food service providers) effectively manage food safety and grab-and-go initiatives, as well as automate and manage back-of-house operations. Recurring revenue from BOHA! is generated by software sales, including software subscriptions that are typically charged to customers annually on a per-application basis, as well as sales of labels, extended warranty and service contracts, and technical support services.

Current wording

Food service technology. Our primary offering in the FST market is our line of BOHA! products. The BOHA! solution combines our latest generation terminal or workstation, which includes one or two printers, with our BOHA! labeling, timers, and media software. In addition, customers may individually purchase cloud-based software applications for our Terminal or WorkStation. These applications can be integrated with separate mobile devices into a solution to automate back-of-house operations in restaurants, convenience stores and food service operations. The additional software offering of BOHA! consists of a variety of individually purchased software-as-a-service (“SaaS”)-based applications for both Android and iOS operating systems, including applications for temperature monitoring, temperature taking and checklists and task lists. These applications are sold separately, and customers purchase the applications they need for their back-of-house operations. Customers may also purchase associated hardware, such as tablets, temperature sensors and gateways. The BOHA! Terminal and the more recently launched Terminal 2 combine an operating system and hardware components in a single touchscreen device with one or two thermal print mechanisms that print easy-to-read food rotation labels, grab-and-go labels, nutritional labels for prepared foods, and “enjoy by” date labels. The BOHA! WorkStation uses an iPad or Android tablet instead of an integrated touchscreen. The BOHA! Terminal, Terminal 2 and WorkStation are equipped with the TransAct Enterprise Management System to ensure that only approved touchscreen functions are available on the device and to allow over-the-air updates to the operating system. BOHA! helps food service establishments and restaurants (including fine dining, casual dining, fast casual and quick-service restaurants (“QSRs”), convenience stores, hospitality establishments and contract food service providers) effectively manage food safety and grab-and-go initiatives, as well as automate and manage back-of-house operations. Recurring revenue from BOHA! is generated by software sales, including software subscriptions that are typically charged to customers annually on a per-application basis, as well as sales of labels, extended warranty and service contracts, and technical support services.

Previous wording

The increase in food service technology sales in the second quarter of 2025 compared to the second quarter of 2024 was primarily driven by an increase in domestic hardware sales. Hardware sales were strong in the second quarter of 2025, up 29% compared to the second quarter of 2024 duelargely to higher sales of Workstationto anew sushi customerwon in the first quarter of 2025 as well as sales of ournew BOHA! Terminal 2 to two large existing customers (replacing our BOHA! Terminal 1). Despite the loss of a significant customer in 2024 (explained further below), FST software, labels and other recurring revenue increased 7% compared to the prior year period dueprimarilyto label sales toour new sushi customer.

Current wording

The increase in food service technology sales in the third quarter of 2025 compared to the third quarter of 2024 was primarily driven by an increase of label sales of $0.4 million, or 18% combined with an increase in hardware sales of 10%. Hardware sales were strong in the third quarter of 2025, up 10% compared to the third quarter of 2024 due largely to higher sales of our new BOHA! Terminal 2 to two large existing customers (BOHA! Terminal 2 sales were up 49% in the third quarter of 2025 compared to the third quarter of 2024), partially offset by lower sales of BOHA! Terminal 1, WorkStations and other BOHA! hardware. FST software, labels and other recurring revenue increased 13% compared to the prior year period due primarily tohigher label sales tothree existing customers.

Previous wording

We expect FST revenue for the remainder of 2025 to be higher than the comparable period of 2024 as we continue to focus on growing our installed base of terminals and the related recurring revenue (primarily the sale of BOHA! labels and subscription software revenue from our labeling software application).

Current wording

We expect total FST revenue for thefourth quarter of 2025 to behigher thanthe equivalent period of 2024 as we continue to focus on growing our installed base of terminals and the related recurring revenue (primarily the sale of BOHA! labels and subscription software revenue from our labeling software application).

Previous wording

The 49% decline in POS automation sales in the second quarter of 2025 compared to the second quarter of 2024 was largely due to competitive pressure that has resulted in a return to a more normalized level of sales as well as a reduction in our average selling prices.

Current wording

The 65% decline in POS automation sales in the third quarter of 2025 compared to the third quarter of 2024 was largely due to competitive pressure that has resulted in adecreased level of sales as well as a reduction in our average selling prices.

Previous wording

We expect POS automation salesfor the remainder of 2025 to remain at approximately the same level as the second quarter of 2025 as we expect to continue to experience competitive pressure in this market.

Current wording

We expect POS automation sales for thefourth quarter of 2025 to remain at approximately the same level as the third quarter of 2025 as we expect to continue to experience competitive pressure in this market.

Previous wording

Domestic sales of our casino and gaming productsfor the second quarter of 2025 increased by $2.8 million, or 88%, compared to the second quarter of 2024. Sales during the second quarter of 2024 were negatively impacted as many of our customers had accumulated higher-than-normal levels of inventory of our product as a hedge during the worldwide supply chain crisis during 2022 and 2023. As a result, during 2024, we experienced a significant slowdown in their order and shipment rates as they worked through this excess inventory. Sales increased during the second quarter of 2025 compared to the second quarter of 2024 as most of our major casino and gaming customers worked through their on-hand inventory and began to order at normalized levels againin 2025. In addition, sales in the second quarter of 2025 benefitted from sales of our casino printer to a new OEM customer for the use in charitable gaming establishments. We expect this new OEM customer to continue to contribute to sales for the remainder of 2025. As a result of these factors, we expect our domestic casino and gaming sales to be significantly higher in 2025 compared to 2024.

Current wording

Domestic sales of our casino and gaming productsfor the third quarter of 2025 increased by $2.1 million, or 78%, compared to the third quarter of 2024. Salesfor the third quarter of 2024 were negatively impacted as many of our customers had accumulated higher-than-normal levels of inventory of our product as a hedge during the worldwide supply chain crisis during 2022 and 2023. As a result, during 2024, we experienced a significant slowdown in their order and shipment rates as they worked through this excess inventory. Sales increased during the third quarter of 2025 compared to the third quarter of 2024 as most of our major casino and gaming customershad worked through their on-hand inventoryby the first quarter of 2025 andwere ordering at normalized levels inthe third quarter of 2025. In addition, sales in the third quarter of 2025 benefitted from sales of our casino printer to a new customer ($2.3 million) compared to no sales to this customer in the third quarter of 2024. However, we believe this customer is now inan overstock position awaiting jurisdictional approvals toinstall new gaming machines. As a result, we do not expect a significant level of sales to this customer in the fourth quarter of 2025, but do expect this new customer toresume purchasing again in 2026. In addition, our domestic OEM customers have indicated slowing demand in the fourth quarter of 2025. As a result of these factors, we expect our domestic casino and gaming sales to belower inthe fourth quarter of 2025 compared tothe third quarter of 2025.

Previous wording

TransAct Services Group (“TSG”): Revenue generated by TSG includes sales of POS receipt paper for non-FST legacy products, replacement parts and accessories, maintenance and repair services and shipping and handling charges. Sales in our worldwide TSG market for the three months ended June 30, 2025 and 2024 were as follows (in thousands, except percentages):

Current wording

TransAct Services Group: Revenue generated by TSG includes sales of POS receipt paper for non-FST legacy products, replacement parts and accessories, maintenance and repair services and shipping and handling charges. Sales in our worldwide TSG market for the three months ended September 30, 2025 and 2024 were as follows (in thousands, except percentages):

Previous wording

The decrease in domestic revenue from TSG of $0.1 million during the second quarter of 2025 as compared to the second quarter of 2024 was due largely to lower sales of legacy replacement parts for lottery printers, as well as lower legacy consumables sales and service revenue. An increase in sales of spare parts to international customers drove the modest increase of $34 thousand of international sales during the second quarter of 2025 as compared to the second quarter of 2024.

Current wording

The decrease in domestic revenue from TSG of $0.1 millionfor the third quarter of 2025 as compared to the third quarter of 2024 was due largely to lower sales of legacy spare parts and accessories for lottery printers (down $133 thousand in the third quarter of 2025 compared to the third quarter of 2024), partially offset by increased shipping revenues (up $67 thousand in the third quarter of 2025 compared to the third quarter of 2024). An increase in sales of spare parts and accessories to international customers drove the modest increase of $26 thousand of international salesfor the third quarter of 2025 as compared to the third quarter of 2024.

Previous wording

We expect TSG sales to be somewhat lower in 2025 compared to 2024 as we expect to cease selling all our remaining legacy consumable products by the end of 2025.

Current wording

We expect TSG sales to be somewhat lower for the fourth quarter of 2025 compared to the same period in 2024 as we expect to cease selling all our remaining legacy consumable products by the end of 2025.

Previous wording

Gross profit is measured as revenue less cost of sales, which includes primarily the cost of all raw materials and component parts, direct labor, manufacturing overhead expenses, cost of finished products purchased directly from our contract manufacturers, expenses associated with installations and support of our EPICENTRAL print system and BOHA! products and royalty payments to third parties, including to the third-party licensor of our food service technology software products. Inthe second quarter of 2025, gross profit increased $542 thousand, or 9% on 19% higher overall sales, and gross margin declined 450 basis points to 48% due largely to higher sales of BOHA! hardware products which carry lower average margins than our other products, and to a lesser extent, increased overhead costs, inflation and lower prices on our POS automation printer due to increased competitive pressure.

Current wording

Gross profit is measured as revenue less cost of sales, which includes primarily the cost of all raw materials and component parts, direct labor, manufacturing overhead expenses, cost of finished products purchased directly from our contract manufacturers, expenses associated with installations and support of our EPICENTRAL print system and BOHA! products and royalty payments to third parties, including to the third-party licensor of our food service technology software products (prior to the purchase of a perpetual license to a copy of the BOHA! source code in August 2025). Inthe third quarter of 2025, gross profit increased $1.3 million, or 25% on 21% higher overall sales, and gross margin improved 170 basis points to 50% due largely to higher overall sales as well as higher sales of casino and gaming products which carry higher average margins than our other products.

Previous wording

We expect gross margin for 2025 to continue to be in the mid-to high 40s range.

Current wording

We expect gross margin forthe fourth quarter 2025 to continue to be in the mid-to high-40% range.

Previous wording

Engineering, design and product development expenses primarily include salary and payroll-related expenses for our hardware and software engineering staff, depreciation and design expenses (including prototype printer expenses, outside design, development and testing services, supplies and contract software development expenses including those payments to the third-party licensor of our food service technology software products). Engineering, design and product development expenses decreased $74 thousand, or 4%, for the second quarter of 2025 compared to the second quarter of 2024 due to cost reduction initiatives taken in the second quarter of 2024 (the full benefit of which was realized in 2025), including a reduction of contracted software development expenses, partially offset by higher incentive compensation due to improved financial results in 2025 compared to 2024.

Current wording

Engineering, design and product development expenses primarily include salary and payroll-related expenses for our hardware and software engineering staff, depreciation and design expenses (including prototype printer expenses, outside design, development and testing services, supplies and contract software development expenses including those payments to the third-party licensor of our food service technology software products). Engineering, design and product development expenses increased $16 thousand, or 1%, for the third quarter of 2025 compared to the third quarter of 2024 due to higher incentive compensation as a result of improved financial results in 2025 compared to 2024, largely offset by a reduction of contracted software development expenses.

Previous wording

Selling and marketing expenses primarily include salaries and payroll-related expenses for our sales, marketing and customer success staff, sales commissions, travel expenses, expenses associated with the lease of sales offices, advertising, trade show expenses, public relations, e-commerce, other promotional marketing expenses and outsourced go-to-market consulting services. Selling and marketing expenses decreased $94 thousand, or 4%, in the second quarter of 2025 compared to the second quarter of 2024 due largely to cost reduction initiatives including reduced headcount, trade show and other marketing expenses taken during the second quarter of 2024 (the full benefit of which was realized in 2025), partially offset by higher costs related to programs to further improve the Company’s go-to-market strategy as well higher sales commissions and incentive compensation due to improved financial results in 2025 compared to 2024.

Current wording

Selling and marketing expenses primarily include salaries and payroll-related expenses for our sales, marketing and customer success staff, sales commissions, travel expenses, expenses associated with the lease of sales offices, advertising, trade show expenses, public relations, e-commerce, other promotional marketing expenses and outsourced go-to-market consulting services. Selling and marketing expenses increased $211 thousand, or 11%, in the third quarter of 2025 compared to the third quarter of 2024 due largely to higher sales commissions and incentive compensation on higher sales (particularly casino and gaming sales which were up 58%) and to a lesser extent, higher costs related to programs to further improve the Company’s go-to-market strategy.

Previous wording

Operating Expenses - General and Administrative. General and administrative information for the three months ended June 30, 2025 and 2024 is summarized below (in thousands, except percentages):

Current wording

Operating Expenses - General and Administrative. General and administrative expense information for the three months ended September 30, 2025 and 2024 is summarized below (in thousands, except percentages):

Previous wording

General and administrative expenses primarily include salaries, incentive and share-based compensation, and other payroll-related expenses for our executive, accounting, human resources, corporate development and information technology staff, expenses for our corporate headquarters, professional and legal expenses, information technology expenses, board of director expenses and other expenses related to being a publicly traded company. General and administrative expenses increased $530 thousand, or 21%, during the second quarter of 2025 compared to the second quarter of 2024. This increase was driven largely by higher incentive and stock based compensation due to improved financial results as well as estimated better performance against targets in 2025 compared to 2024. These increases were partially offset by the impactof cost reduction initiatives taken in the second quarter of 2024.

Current wording

General and administrative expenses primarily include salaries, incentive and share-based compensation, and other payroll-related expenses for our executive, accounting, human resources, corporate development and information technology staff, expenses for our corporate headquarters, professional and legal expenses, information technology expenses, board of director expenses and other expenses related to being a publicly traded company. General and administrative expenses increased $251 thousand, or 10%, for the third quarter of 2025 compared to the third quarter of 2024. This increase was driven largely by higher incentive and share-based compensation expense due to improved financial results as well as estimated better performance against targets in 2025 compared to 2024.

Previous wording

Our operating loss decreased $180 thousand in the second quarter of 2025 compared to the second quarter of 2024 due largely to a 19% increase in sales and a resulting $542 thousand increase in gross profit (despite a 450 basis point decline in gross margin), partially offset by an increase in operating expenses of $362 thousand, or 6%, as discussed above.

Current wording

We had operating income of $14 thousand in the third quarter of 2025 compared to an operating loss of $837 thousand in the third quarter of 2024 due largely to a 21% increase in sales and a resulting $1.3 million increase in gross profit, partially offset by an increase in operating expenses of $478 thousand, or 8%, as discussed above.

Previous wording

Interest, net. We recorded net interest income of $40 thousand in the second quarter of 2025 compared to $26 thousand in the second quarter of 2024. We earned more interest income on increased levels of invested cash in the second quarter of 2025 compared to the second quarter of 2024. We maintained the required minimum outstanding borrowings under our credit facility of $3 million and $2.25 million during the second quarter of 2025 and 2024, respectively. See Note 5, Borrowings to the accompanying condensed consolidated financial statements for more information regarding the Company’s credit facility.

Current wording

Interest, net. We recorded net interest income of $61 thousand in the third quarter of 2025 compared to $42 thousand in the third quarter of 2024. We earned more interest income on increased levels of invested cash in the third quarter of 2025 compared to the third quarter of 2024. We maintained the required minimum outstanding borrowings under our credit facility of $3 million and $2.25 million during the third quarter of 2025 and 2024, respectively. See Note 5, Borrowingsto the accompanying condensed consolidated financial statements for more information regarding the Company’s credit facility.

Previous wording

Other, net. Other, net primarily includes foreign exchange gains and losses incurred by our UK subsidiary. During the second quarter of 2025 we recognized $115 thousand of foreign exchange gains compared to $7 thousand foreign exchange gains in the second quarter of 2024. Going forward, we may continue to experience more foreign exchange gains or losses depending on the level of sales to European customers through our UK subsidiary and the fluctuation in exchange rates of the euro and pound sterling against the U.S. dollar.

Current wording

Other, net. Other, net primarily includes foreign exchange gains and losses incurred by our UK subsidiary. For the third quarter of 2025 we recognized $35 thousand of foreign exchange losses compared to $96 thousand foreign exchange gains for the third quarter of 2024. Going forward, we may continue to experience more foreign exchange gains or losses depending on the level of sales to European customers through our UK subsidiary and the fluctuation in exchange rates of the euro and pound sterling against the U.S. dollar.

Previous wording

Income Taxes. We recorded income tax expense in the second quarter of 2025 of $40 thousand at an effective tax rate of 38.8% compared to an income tax benefit in the second quarter of 2024 of $86 thousand at an effective tax rate of (21.2%). The effective tax rate for the second quarter of 2025 was unusually high due to (1) a near-breakeven level of pre-tax earnings of $103 thousand and (2) tax expense only included taxes associated with earnings in the United Kingdom and minimum required state taxes in the United States. As previously disclosed, we provided for a full valuation allowance against our U.S. deferred taxes in the fourth quarter of 2024 and continue to believe this allowance is required as of June 30, 2025. As such, the Company has not recorded any U.S. federal tax benefits associated with losses recorded in the second quarter of 2025.

Current wording

Income Taxes. We recorded income tax expense in the third quarter of 2025 of $25 thousand at an effective tax rate of 62.5% compared to an income tax benefit in the third quarter of 2024 of $148 thousand at an effective tax rate of (21.2%). The effective tax rate for the third quarter of 2025 was unusually high due to (1) a near-breakeven level of pre-taxincome of $40 thousand and (2) tax expense only included taxes associated with earnings in the United Kingdom and minimum required state taxes in the United States. As previously discussed in Note 9, Income Taxes, to the accompanying condensed consolidated financial statements, we provided for a full valuation allowance against our U.S. deferred taxes in the fourth quarter of 2024 and continue to believe this allowance is required as of September 30, 2025. As such, the Company has not recorded any U.S. federal tax benefits associated with income recorded in the third quarter of 2025.

Previous wording

Net Loss. As a result of the above, we reported a net loss for the second quarter of 2025 of $(143) thousand, or $(0.01) per diluted share, compared to net loss of $(319) thousand, or $(0.03) per diluted share for the second quarter of 2024.

Current wording

Net Income (Loss). As a result of the above, we reported net income in the third quarter of 2025 of $15 thousand, or$0.00 per diluted share, compared toanet loss of ($0.6) million, or $(0.06) per diluted share for the third quarter of 2024.

Previous wording

Net Sales. Net sales, which include printer, terminal and software sales, as well as sales of replacement parts, consumables and maintenance and repair services, by market for the six months ended June 30, 2025 and 2024 were as follows(in thousands, except percentages):

Current wording

Net Sales. Net sales, which include printer, terminal and software sales, as well as sales of replacement parts, consumables (including labels) and maintenance and repair services, by market for the nine months ended September 30, 2025 and 2024 were as follows(in thousands, except percentages):

Previous wording

Net sales for the first six months of 2025 increased $4.6 million, or 21%, from the same period in 2024. Printer, terminal and other hardware sales unit volume increased by 24% to approximately 51,000 units for the first six months of 2025 driven by a 32% increase in units within our casino and gaming market and an 82% increase in units within our FST market, somewhat offset by a 29% decrease in unit sales volume in the POS automation market. For more information about the sales volume increases described above, please refer to the discussion below of the results of operations for each of our markets. The average selling price of our printers, terminals and other hardware was up 5% in the first six months of 2025 compared to the first six months of 2024, due in part to increased costs resulting from U.S. tariffs imposed on our products assembled in Thailand, which have been passed on to our customers. FST software, labels and other recurring revenue increased $0.4 million, or 8%, in the first six months of 2025 compared to the first six months of 2024.

Current wording

Net sales for the first nine months of 2025 increased $6.9 million, or 21%, from the same period in 2024. Printer, terminal and other hardware sales unit volume increased by 22% to approximately 75,000 units for the first nine months of 2025 driven by a 40% increase in units sold within our casino and gaming market and a 27% increase in units sold within our FST market, offset by a 44% decrease in unit sales volume in the POS automation market. For more information about the sales volume increases described above, please refer to the discussion below of the results of operations for each of our markets. The average selling price of our printers, terminals and other hardware was up 6% in the first nine months of 2025 compared to the first nine months of 2024, due in part to increased costs resulting from U.S. tariffs imposed on our products assembled in Thailand, which have been passed on to our customers. FST software, labels and other recurring revenue increased $0.8 million, or 10%, in the first nine months of 2025 compared to the first nine months of 2024.

Previous wording

International sales for the first six months of 2025 decreased $1.1 million, or 19%, from the same period in 2024 due primarily to a 23% decrease in sales within the international casino and gaming market.

Current wording

International sales for the first nine months of 2025 decreased $0.6 million, or 8%, from the same period in 2024 due primarily to a 9% decrease in sales within the international casino and gaming market.

Previous wording

Sales of our worldwide FST products for the three months ended June 30, 2025 and 2024 were as follows (in thousands, except percentages):

Current wording

Food service technology. Sales of our worldwide FST products for the nine months ended September 30, 2025 and 2024 were as follows(in thousands, except percentages):

Previous wording

The increase in food service technology sales of $2.2 million, or 29%, in the first six months of 2025 compared to the first six months of 2024 was primarily driven by a 77% increase in hardware sales. Hardware sales were strong in the first six months of 2025 compared to the first six months of 2024 duelargely to higher sales of Workstation to a new sushi customerwon in the first quarter of 2025 as well as sales of ournew BOHA! Terminal 2 to two large existing customers (replacing our BOHA! Terminal 1). Despite the loss of a significant customer in 2024, FST labels and other recurring revenue increased 8% in the first half of 2025 compared to the prior year period dueprimarilyto label sales toour new sushi customer.

Current wording

The increase in FST sales of $2.7 million, or 23%, in the first nine months of 2025 compared to the first nine months of 2024 was primarily driven by a 51% increase in hardware sales. Hardware sales were strong in the first nine months of 2025 compared to the first nine months of 2024 due largely to higher sales of WorkStations (up $185 thousand in the first nine months of 2025 compared to the first nine months of 2024)to a new sushi customer won in the first quarter of 2025 as well as sales of our new BOHA! Terminal 2(replacing our BOHA! Terminal 1)to two large existing customers. Our BOHA! Terminal 2 sales were up $2.1 million in thefirst nine months of 2025 compared to the first nine months of 2024.

Previous wording

During the second quarter of 2024, a significant customer notified us that it would be terminating service, including its BOHA! software subscriptions and label sales, for its existing installed base of BOHA! terminals by the middle of July 2024. Total sales to this customer (including software, labels and other recurring revenue) were approximately $600 thousand in the first six months of 2024. We had a de minimis amount of sales to this customer in the first six months of 2025. Despite the loss of this customer, we expect overall FST revenue for the remainder of 2025 to be higher than the comparable period of 2024.

Current wording

During thesecond quarter of 2024, a significant customer notified us that it would be terminating service, including its BOHA! software subscriptions and label sales, for substantially of its installed base of BOHA! terminals by the middle of July 2024. Total sales to this customer (including software, labels and other recurring revenue) were approximately $660 thousand in the first nine months of 2024. We had a de minimis amount of sales to this customer in the first nine months of 2025. Despite the loss of this customer, FST labels and other recurring revenue increased 10% in the first nine months of 2025 compared to the prior year period due primarily to label sales to our new sushi customer.

Previous wording

POS automation. Sales of our worldwide POS automation products for the six months ended June 30, 2025 and 2024 were as follows(in thousands, except percentages):

Current wording

POS automation. Sales of our worldwide POS automation products for the nine months ended September 30, 2025 and 2024 were as follows(in thousands, except percentages):

Previous wording

Sales of POS automation printers decreased $0.6 million, or 33%, for the first six months of 2025 compared to the first six months of 2024. We continue to experience competitive pressure that has resulted in a lower level of sales as well as a reduction in our average selling prices.

Current wording

Sales of POS automation printers decreased $1.3 million, or 46%, for the first nine months of 2025 compared to the first nine months of 2024. We continue to experience competitive pressure that has resulted in a lower level of sales as well as a reduction in our average selling prices.

Previous wording

We expect POS automation salesfor the remainder of 2025 to remain at approximately the same level as the second quarter of 2025 as we expect to continue to experience competitive pressure in this market.

Current wording

We expect POS automation sales for thefourth quarter of 2025 to remain at approximately the same level as the third quarter of 2025 as we expect to continue to experience competitive pressure in this market.

Previous wording

Casino and gaming. Sales of our worldwide casino and gaming products for the six months ended June 30, 2025 and 2024 were as follows(in thousands, except percentages):

Current wording

Casino and gaming. Sales of our worldwide casino and gaming products for the nine months ended September 30, 2025 and 2024 were as follows(in thousands, except percentages):

Previous wording

Domestic sales of our casino and gaming productsfor the first six months of 2025 increased by $4.4 million, or 68%, compared to the first six months of 2024. Sales during the first six months of 2024 were negatively impacted as many of our customers had accumulated higher-than-normal levels of inventory of our product as a hedge during the worldwide supply chain crisis during 2022 and 2023. As a result, during 2024, we experienced a significant slowdown in their order and shipment rates as they worked through this excess inventory. Sales increased during the first six months of 2025 compared to the first six months of 2024 as most of our major casino and gaming customers had worked through their on-hand inventory by the first quarter of 2025 and were ordering at normalized levels in the second quarter of 2025. In addition, sales in the first six months of 2025 benefitted from sales of our casino printer to a new OEM customer for the use in charitable gaming establishments. We expect this new OEM customer to continue to contribute to sales for the remainder of 2025. As a result of these factors, we expect our domestic casino and gaming sales to be significantly higher in 2025 compared to 2024.

Current wording

Domestic sales of our casino and gaming productsfor the first nine months of 2025 increased by $6.5 million, or 71%, compared to the first nine months of 2024. Salesfor the first nine months of 2024 were negatively impacted as many of our customers had accumulated higher-than-normal levels of inventory of our product as a hedge during the worldwide supply chain crisis during 2022 and 2023. As a result, during 2024, we experienced a significant slowdown in their order and shipment rates as they worked through this excess inventory. Sales increasedfor the first nine months of 2025 compared to the first nine months of 2024 as most of our major domestic casino and gaming customers had worked through their on-hand inventory by the first quarter of 2025 and were ordering at normalized levels in the secondand third quarters of 2025. In addition, sales in the first nine months of 2025 benefitted from sales of our casino printer to a new OEM customer for the use in charitable gaming establishments. However, we believe this customer is now in an overstock position awaiting jurisdictional approvals to install new gaming machines. As a result, we do not expect a significant level of sales to this customer in the fourth quarter of 2025, but do expect this new customer to resume purchasing again in 2026. In addition, our domestic OEM customers have indicated slowing demand in the fourth quarter of 2025. As a result of these factors, we expect our domestic casino and gaming sales to belower inthe fourth quarter of 2025 compared tothe third quarter of 2025.