What the changes say
- Aterian faces heightened risks regarding product safety recalls, including 195,000 units of PurSteam Mighty Lil Steamers and Elite Travel Steamers recalled in February 2026.
What changed since the prior 10-K
New
- NewRisks Relating to Our Business
If our products experience any recalls, product liability claims, or government, customer or consumer concerns about product safety, our reputation and operating results could be harmed
In February 2026, we announced a voluntary recall with the CPSC for approximately 195,000 PurSteam Mighty Lil Steamers and Elite Travel Steamers, leading to a class action lawsuit.
- NewRisks Relating to Our Business
We may be subject to product liability claims if people or property are harmed by the products we sell. Some of the products we sell may expose us to product liability claims and litigation (including class actions) or regulatory action relating to safety, personal injury, and death or environmental or property damage
We face product liability claims for personal injury or property damage from products we sell, and our supply chain partners often lack adequate resources to indemnify us.
- NewRisks Relating to Our Business
Any failure by us or our vendors to comply with product safety, consumer protection or other laws, or our standard vendor terms and conditions, or to provide safe factory conditions for our or their workers may damage our reputation and brand and harm our business
Compliance failures with safety laws by us or our vendors can lead to merchandise removal, seller account suspension on Amazon, and legal expenses.
- NewRisks Relating to Our Business
The process of evaluating strategic alternatives may be disruptive to our business and may not result in a transaction or other strategic outcome
Our Board announced a formal process on December 8, 2025, to evaluate strategic alternatives, including a potential sale or merger, which may disrupt our business.
- NewRisks Relating to Information and Cyber Security
The Company’s use of artificial intelligence technologies may not achieve intended results and could expose us to operational, competitive, regulatory, and reputational risks that may adversely affect our business, financial condition, and results of operations
Our reliance on third-party AI systems for search and advertising creates black box dependencies that could de-prioritize our listings on platforms like Amazon and Google.
- NewRisks Relating to Information and Cyber Security
We also rely in part on third-party vendors that integrate AI into the tools and services they provide to us. Because we may have limited visibility or control over these systems, any technical errors, data privacy issues, or regulatory noncompliance by such vendors could negatively affect our operations
Third-party vendor AI integrations can expose us to technical errors, data privacy issues, and regulatory noncompliance over which we have limited control.
- NewRisks Relating to the Litigation and Government Regulation
Over the past several years, the U.S. government has taken a number of trade actions that impact or could impact our operations, including imposing tariffs on certain goods imported into the United States
U.S. trade actions in 2025 imposed a baseline 10% global tariff and rates on China using IEEPA, though the Supreme Court later ruled IEEPA does not authorize such tariffs.
- NewRisks Relating to the Ownership of our Common Stock
The Bid Price Notice has no immediate effect on the continued listing status of the Common Stock on The Nasdaq Capital Market, and, therefore, the Company's listing remains fully effective
We received a Nasdaq Bid Price Notice giving us until June 8, 2026, to regain compliance with the $1.00 minimum closing bid requirement.
- NewRisks Relating to the Ownership of our Common Stock
The proposed Nasdaq minimum market value rule could result in the immediate suspension and delisting of our common stock without a cure period
Nasdaq proposed a new rule on January 13, 2026, requiring a $5 million Market Value of Listed Securities without a cure period, risking immediate delisting.
- NewRisks Relating to the Ownership of our Common Stock
Make our stock subject to “penny stock” rules, which impose additional burdens on broker-dealers and further restrict secondary market trading
A potential stock delisting could make our stock subject to penny stock rules, restricting secondary market trading.
Dropped
- DroppedRisks Relating to the Litigation and Government Regulation
In the summer of 2021, the Company received informal notice from a third-party alleging patent infringement with respect to certain transfer paper products sold by the Company
- DroppedRisks Relating to the Litigation and Government Regulation
U.S. government trade actions could have a material adverse effect on our business, financial position, and results of operation
- DroppedRisks Relating to the Ownership of our Common Stock
We no longer qualify as an “emerging growth company” as of December 31, 2024 and, as a result, we are no longer able to avail ourselves of certain reduced disclosure requirements applicable to emerging growth companies
Reworded
- 91% rewrittenRisks Relating to the Ownership of our Common Stock
There is no guarantee that we will continue to meet all requirements for continued listing on the Nasdaq Capital Market. We must continue to satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share
Updated to reflect current Nasdaq minimum bid price listing requirements and the history of a 1-for-12 reverse stock split effected in March 2024.
- 58% rewrittenRisks Relating to Our Business
Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations
Updated net operating loss carryforwards from $241.7 million as of December 31, 2024, to $269.3 million as of December 31, 2025.
- 52% rewrittenRisks Relating to Our Business
On February 23, 2024, the Company amended the Credit Facility to extend the term to December 2026 and provide us with access to $17 million in current commitments which can be increased, subject to certain conditions, to $30.0 million
Updated credit facility amendments to allow up to $1.5 million in annual stock repurchases and reduced the minimum liquidity covenant to $5.0 million.
- 42% rewrittenRisks Relating to the Litigation and Government Regulation
Claims, litigation, government investigations, product liability and recalls, and other proceedings may adversely affect our business, operating results, financial condition, and cash flows
Maintained general litigation and regulatory proceedings risk boilerplate without substantive changes to the core text.
- 34% rewrittenRisks Relating to Our Business
We may be unable to attract, retain or motivate key personnel, which could harm our business
Added that recent employee position terminations under a restructuring could negatively affect personnel retention and motivation.
- 26% rewrittenRisks Relating to Our Business
We face intense competition and if we are unable to compete effectively, our market share and revenue could be diminished which may delay or otherwise hinder our efforts to achieve or maintain profitability
Retained the core risk description regarding intense competition and Amazon marketplace reliance without numerical changes.
- 23% rewrittenRisks Relating to Our Business
Increased costs of raw materials, energy, labor, transportation and platform fees charged by marketplaces may adversely affect our business, operating results, financial condition, and cash flows
Retained the risk regarding increased raw material, labor, and platform fee costs without substantive additions.
- 22% rewrittenRisks Relating to Our Business
We have historically operated at a loss and we may never achieve or sustain continuous profitability or positive cash flows. Further, we and our independent registered public accounting firm have expressed substantial doubt about our ability to continue as a going concern
Updated operating loss references from the years ended December 31, 2024 and 2023, to the years ended December 31, 2025 and 2024.
All 33 risk factors
Headings as the filing states them, in filing order.
Risks Relating to Our Business
- 01We have historically operated at a loss and we may never achieve or sustain continuous profitability or positive cash flows. Further, we and our independent registered public accounting firm have expressed substantial doubt about our ability to continue as a going concern22% rewritten
- 02We face intense competition and if we are unable to compete effectively, our market share and revenue could be diminished which may delay or otherwise hinder our efforts to achieve or maintain profitability26% rewritten
- 03Our financial projections are highly subjective in nature and our future financial results could vary significantly from our projections from quarter-to-quarter and annually
- 04Our business is sensitive to the strength of the United States consumer market to a meaningful extent, and changes in consumer spending and economic conditions could adversely affect our business
- 05Demand for our products is highly seasonal and dependent on weather conditions, which could result in significant variations in our inventory levels, financial condition and operating results
- 06If we are unable to manage our inventory effectively, our operating results, financial condition, and cash flows could be adversely affected
- 07Increased costs of raw materials, energy, labor, transportation and platform fees charged by marketplaces may adversely affect our business, operating results, financial condition, and cash flows23% rewritten
- 08We depend on third-party suppliers for all of our products, most of which are located in Asia, and any inability or delay in obtaining products from such suppliers could have a material adverse effect on our business, operating results, financial condition, and cash flow
- 09A significant majority of our revenue results from sales of products on Amazon’s U.S. marketplace, and any change, limitation, or restriction on our ability to operate on Amazon’s platform could have a material adverse impact on our business, operating results, financial condition, and cash flows
- 10On February 23, 2024, the Company amended the Credit Facility to extend the term to December 2026 and provide us with access to $17 million in current commitments which can be increased, subject to certain conditions, to $30.0 million52% rewritten
- 11Our efforts to grow our business through new products, marketplace and geographic expansion may not be successful and may place a significant strain on our management and operational, financial and other resources
- 12Our ability to use our net operating losses to offset future taxable income may be subject to certain limitations58% rewritten
- 13If our products experience any recalls, product liability claims, or government, customer or consumer concerns about product safety, our reputation and operating results could be harmedNew
- 14We may be subject to product liability claims if people or property are harmed by the products we sell. Some of the products we sell may expose us to product liability claims and litigation (including class actions) or regulatory action relating to safety, personal injury, and death or environmental or property damageNew
- 15Any failure by us or our vendors to comply with product safety, consumer protection or other laws, or our standard vendor terms and conditions, or to provide safe factory conditions for our or their workers may damage our reputation and brand and harm our businessNew
- 16The process of evaluating strategic alternatives may be disruptive to our business and may not result in a transaction or other strategic outcomeNew
- 17We may be unable to attract, retain or motivate key personnel, which could harm our business34% rewritten
Risks Relating to Information and Cyber Security
- 18We rely on data provided by third parties and any loss, reduction in access or increased costs related thereto of which could have a material adverse effect on our business
- 19Our business, operating results, financial condition, and cash flows could be adversely impacted if our information technology systems or those of third-parties become subject to a data security breach, are disrupted or cease to operate effectively
- 20The Company’s use of artificial intelligence technologies may not achieve intended results and could expose us to operational, competitive, regulatory, and reputational risks that may adversely affect our business, financial condition, and results of operationsNew
- 21We also rely in part on third-party vendors that integrate AI into the tools and services they provide to us. Because we may have limited visibility or control over these systems, any technical errors, data privacy issues, or regulatory noncompliance by such vendors could negatively affect our operationsNew
Risks Relating to the Litigation and Government Regulation
- 22Claims, litigation, government investigations, product liability and recalls, and other proceedings may adversely affect our business, operating results, financial condition, and cash flows42% rewritten
- 23We must successfully manage compliance with current and expanding laws and regulations, as well as manage new and pending legal and regulatory matters in the U.S. and abroad
- 24Over the past several years, the U.S. government has taken a number of trade actions that impact or could impact our operations, including imposing tariffs on certain goods imported into the United StatesNew
Risks Relating to the Ownership of our Common Stock
- 25We are a "smaller reporting company" and the reduced disclosure requirements applicable to smaller reporting companies may make it more difficult to compare our performance with other public companies and make our common stock less attractive to investors
- 26The market price and trading volume of our common stock may fluctuate significantly
- 27We may be limited by our ability to raise the funding we need to support our growth or to maintain our existing business. Also, such funding may be available only by diluting existing stockholders
- 28Future sales of our common stock by our insiders, or the perception that these sales may occur, may cause the market price of our common stock to decline
- 29Future sales and issuances of our capital stock, or the perception that such sales may occur, could cause our stock price to decline
- 30There is no guarantee that we will continue to meet all requirements for continued listing on the Nasdaq Capital Market. We must continue to satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum closing bid price requirement of $1.00 per share91% rewritten
- 31The Bid Price Notice has no immediate effect on the continued listing status of the Common Stock on The Nasdaq Capital Market, and, therefore, the Company's listing remains fully effectiveNew
- 32The proposed Nasdaq minimum market value rule could result in the immediate suspension and delisting of our common stock without a cure periodNew
- 33Make our stock subject to “penny stock” rules, which impose additional burdens on broker-dealers and further restrict secondary market tradingNew
Other Aterian 10-Ks
- FY2024 10-K risk factors26 risks
Heavy reliance on Amazon U.S. marketplace for product sales creates platform concentration risk.
Filed Mar 25, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.