10. Commitments and Contingencies

On February 20, 2026, the U.S. Supreme Court ruled that certain tariffs imposed by the current administration under the International Emergency Economic Powers Act were unlawful. Following this ruling, the U.S. Court of International Trade directed U.S. Customs and Border Protection ("CBP") to establish a process for the submission and review of refund claims related to affected tariffs.

In April 2026, CBP launched an online portal through which companies may submit refund requests. During the first quarter of fiscal 2026, the Company submitted a claim seeking a refund of approximately $4.0 million related to tariffs previously paid. The claim is subject to review and validation by CBP, and the approval, timing, and amount of any potential refund and recovery remain uncertain. The Company expects to recognize any recovery when receipt is considered realizable.

Tariffs subject to the refund claim were previously recorded as a component of cost of goods sold or capitalized into inventory, as applicable. Upon recognition of any approved refund, the portion attributable to inventory previously sold will be recognized as a reduction of cost of goods sold, with any remaining amount recognized as a reduction of inventory.

The scope, duration, and rates of existing and proposed tariff measures, as well as the potential for modifications, suspensions, or retaliatory trade actions, remain uncertain. These actions could impact the Company’s operations, supply chain, and cost structure. The Company is continuing to monitor these developments and assessing the potential impact on its business, financial condition, and results of operations.