Note 11. Commitments and Contingencies

Legal Matters

From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of its business. We assess our liabilities and contingencies in connection with outstanding legal proceedings utilizing the latest information available. Where it is probable that we will incur a loss and the amount of the loss can be reasonably estimated, we record a liability in our consolidated financial statements. These legal accruals may be increased or decreased to reflect any relevant developments on a quarterly basis. Where a loss is not probable or the amount of the loss is not estimable, we do not record an accrual, consistent with applicable accounting guidance. In the opinion of management, while the outcome of such claims and disputes cannot be predicted with certainty, our ultimate liability in connection with these matters is not expected to have a material adverse effect on our results of operations, financial position or cash flows, and the amounts accrued for any individual matter are not material. However, legal proceedings are inherently uncertain. As a result, the outcome of a particular matter or a combination of matters may be material to our results of operations for a particular period, depending upon the size of the loss or our income for that particular period.  There were no pending material claims or legal matters as of March 31, 2025.

Purchase Commitments

As of March 31, 2025, the Company had purchase commitments for inventory totaling approximately $11,835.

Significant Customers

Sales to United States government agencies represented approximately $2,078 (10.9%) of the Company’s net total sales for the three months ended March 31, 2025, compared with approximately $9,830 (53.9%) for the same period last year.   Accounts receivable from agencies of the United States government were $913 as of March 31, 2025, compared with approximately $5,941 at the same date last year.  In addition, two commercial customers accounted for approximately 34.3% of net sales for the three months ended March 31, 2025 and approximately 39.1% of accounts receivable at March 31, 2025.  

Geopolitical Tensions

 U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the military conflict between Russia and Ukraine and in the Middle East. Although the length and impact of the ongoing military conflicts is highly unpredictable, the conflict in both of these regions could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.