What the changes say
- Arroweye integration, product innovation and market competition are newly highlighted business risks.
- Tariffs have already increased costs for imported materials and components and could affect future semiconductor imports.
- Ownership risks now involve Parallel49 and the Tricor Family Office, while several compliance and climate risks were removed.
What changed since the prior 10-K
New
- NewRisks Relating to our Business and Industry
If we cannot compete successfully, we may lose or fail to maintain market share, which could have a material adverse effect on our business, financial condition and results of operations
Failure to develop and commercialize innovative card products and related services could make existing offerings obsolete and cost customers.
- NewRisks Relating to our Business and Industry
Changes in U.S. and global trade policy and the impact of tariffs have had and may continue to have a material adverse effect on our business and results of operations
Changing U.S. tariffs have harmed imported materials and components, with future tariffs potentially affecting imported semiconductors and other inputs.
- NewRisks Relating to our Business and Industry
We may not realize the potential benefits from the acquisition of Arroweye because of difficulties related to integration, the achievement of synergies and other challenges
CPI may not fully integrate Arroweye, combine operations, retain relationships or achieve the acquisition’s expected synergies.
Dropped
- DroppedRisks Relating to our Business and Industry
penalties if our systems do not meet certain operating standards, and failure to operate in accordance with the standards of one or more of the Payment Card Brands could result in a loss of compliance of our facilities, any of which could have a material adverse effect on our business
- DroppedRisks Relating to our Business and Industry
Climate change may adversely affect our operations and financial performance
- DroppedRisks Relating to our Business and Industry
Current and prospective regulations, changes in our product offerings and customer contractual requirements addressing consumer privacy and data use and security could increase our costs of operations, which could adversely affect our operations, results of operations and financial condition
- DroppedRisks Relating to our Business and Industry
Delays or interruptions in our ability to source raw materials and components used in our products from foreign countries, as well as trade restrictions on goods imported into the United States, could materially harm our business, financial condition and results of operations
- DroppedRisks Relating to our Business and Industry
releases of, or exposure to, regulated materials, may have a material adverse effect on our business, financial condition and results of operations
Reworded
- 95% rewrittenRisks Relating to our Business and Industry
Our marketplace is highly competitive, relatively saturated and increasingly consolidated. We expect these market dynamics to continue for new product innovations, and as competitors develop lower-cost production, competitors consolidate and other competitors attempt to enter the markets in which we operate
The discussion removes competitors’ public-company cost advantage while retaining risks from larger rivals, lower-cost production and new entrants.
- 78% rewrittenRisks Relating to our Business and Industry
Our long-lived assets recorded as of December 31, 2025 include $108.4 million of plant, equipment, leasehold improvements and operating lease right-of-use assets, $18.5 million of net intangible assets, and $48.8 million of goodwill
The risk now identifies $108.4 million of plant and leasehold assets, $18.5 million of intangibles and $48.8 million of goodwill.
Was: Our long-lived assets recorded as of December 31, 2024 include $68.6 million of plant, equipment, leasehold improvements and operating lease right-of-use assets, $10.5 million of net intangible assets, and $47.2 million of goodwill
- 61% rewrittenRisks Relating to our Business and Industry
If we are unable to generate or borrow sufficient cash to make payments on our indebtedness, our financial condition could be materially harmed. We may not be able to refinance our existing long-term debt if necessary, or we may only be able to do so at a higher interest rate or on other less favorable terms
Debt risk now emphasizes uncertain operating cash flow, restructuring or refinancing needs and potential asset sales, without repeating the July 15, 2029 repayment date.
Was: We may not be able to refinance our existing long-term debt if necessary, or we may only be able to do so at a higher interest rate or on other less favorable terms
- 51% rewrittenRisks Relating to our Business and Industry
Disruptions in production at one or more of our facilities may have a material adverse impact on our business, results of operations and/or financial condition
The Fort Wayne relocation risk was removed, while customer switching to alternative suppliers was added as a consequence of production disruptions.
- 49% rewrittenRisks Relating to Ownership of our Common Stock
Certain stockholders own a significant percentage of our common stock, and such stockholders may influence major corporate decisions of the Company and our interests may conflict with the interests of other holders of our common stock
Ownership is now split between Parallel49 at approximately 24% and the Tricor Family Office at approximately 19%, replacing the Tricor Funds’ approximately 43% stake.
Was: Our former controlling stockholders continue to own a significant percentage of our common stock, and such stockholders may influence major corporate decisions of the Company and our interests may conflict with the interests of other holders of our common stock
- 47% rewrittenRisks Relating to our Business and Industry
Environmental, health and safety laws and regulations, including climate change regulations, expose us to liability and any such liability may have a material adverse effect on our business
No substantive change; the risk still covers environmental, health and safety compliance, permits, fines and sanctions.
- 44% rewrittenRisks Relating to Ownership of our Common Stock
Conflicts of interest may arise because directors who are principals of or who were nominated by our significant stockholders serve on our Board of Directors
The disclosure now identifies separate nomination agreements, three nominated directors and ownership-based nomination rights for Parallel49 and the Tricor Family Office.
- 43% rewrittenRisks Relating to Ownership of our Common Stock
The concentration of ownership by our significant stockholders and the sale or availability for sale of substantial amounts of our common stock may adversely impact the market price and liquidity of our common stock
The ownership discussion now names Parallel49 and the Tricor Family Office rather than the Tricor Funds, while retaining liquidity and stock-sale concerns.
- 33% rewrittenRisks Relating to our Business and Industry
Risks associated with reduced levels of consumer and business spending, inflation-related challenges and the effects of an economic downturn could adversely affect our business, financial condition and results of operations
- 32% rewrittenRisks Relating to our Business and Industry
Failure to retain our existing customers or identify and attract new customers would have a material adverse effect on our business
- 29% rewrittenRisks Relating to Ownership of our Common Stock
Certain provisions of our organizational documents and other contractual provisions may make it difficult for stockholders to change the composition of our Board of Directors and may discourage hostile takeover attempts that some of our stockholders may consider to be beneficial
- 26% rewrittenRisks Relating to our Business and Industry
Interruptions in our operations, particularly in our IT systems, could have a material adverse effect on our business and reputation
- 26% rewrittenRisks Relating to our Business and Industry
Expectations of stakeholders relating to environmental, social and governance matters may impose additional costs and expose us to new risks as well as have an adverse effect on our business, financial condition, results of operations, and cash flows
- 22% rewrittenRisks Relating to Ownership of our Common Stock
Our business and operations could be negatively affected by stockholder activism and securities litigation
- 22% rewrittenRisks Relating to our Business and Industry
We may not be able to successfully execute our acquisition strategy or integrate acquisitions or strategic investments successfully, or successfully enter into, maintain and leverage business relationships, which could adversely affect our financial condition and results of operations
Was: We may not be able to successfully execute our acquisition strategy or integrate acquisitions successfully, or successfully enter into, maintain and leverage business relationships, which could adversely affect our financial condition and results of operations
All 35 risk factors
Headings as the filing states them, in filing order.
Risks Relating to our Business and Industry
- 01Risks associated with reduced levels of consumer and business spending, inflation-related challenges and the effects of an economic downturn could adversely affect our business, financial condition and results of operations33% rewritten
- 02Our operating results are unpredictable and may vary significantly from quarter to quarter and annually and may differ significantly from our expectations
- 03Failure to retain our existing customers or identify and attract new customers would have a material adverse effect on our business32% rewritten
- 04Our marketplace is highly competitive, relatively saturated and increasingly consolidated. We expect these market dynamics to continue for new product innovations, and as competitors develop lower-cost production, competitors consolidate and other competitors attempt to enter the markets in which we operate95% rewritten
- 05If we cannot compete successfully, we may lose or fail to maintain market share, which could have a material adverse effect on our business, financial condition and results of operationsNew
- 06A disruption or other failure in our supply chain could adversely affect our business and financial results
- 07Changes in U.S. and global trade policy and the impact of tariffs have had and may continue to have a material adverse effect on our business and results of operationsNew
- 08Interruptions in our operations, particularly in our IT systems, could have a material adverse effect on our business and reputation26% rewritten
- 09We may experience software defects, which could harm our business and reputation and expose us to potential liability
- 10Disruptions in production at one or more of our facilities may have a material adverse impact on our business, results of operations and/or financial condition51% rewritten
- 11Our business could suffer from problems in production quality, materials and process, which could reduce, delay or interrupt production of our products, resulting in adverse impacts to our business and financial results
- 12Costs relating to product defects, and any related product liability and warranty claims may materially adversely affect our business
- 13The failure to effectively recruit, retain and develop qualified personnel and implement effective succession processes could adversely affect our success and could have a material adverse effect on our business, financial condition and results of operations
- 14The covenants and restrictions contained in agreements governing our indebtedness may adversely affect our business and results of operations, may restrict our ability to grow and could make it difficult or impossible to timely make our debt service payments or refinance our debt when it comes due
- 15If we are unable to generate or borrow sufficient cash to make payments on our indebtedness, our financial condition could be materially harmed. We may not be able to refinance our existing long-term debt if necessary, or we may only be able to do so at a higher interest rate or on other less favorable terms61% rewritten
- 16We may not be able to successfully execute our acquisition strategy or integrate acquisitions or strategic investments successfully, or successfully enter into, maintain and leverage business relationships, which could adversely affect our financial condition and results of operations22% rewritten
- 17We may not realize the potential benefits from the acquisition of Arroweye because of difficulties related to integration, the achievement of synergies and other challengesNew
- 18In executing our strategy, we have consolidated certain of our facilities and divested certain of our businesses. We will continue to evaluate such opportunities
- 19Expectations of stakeholders relating to environmental, social and governance matters may impose additional costs and expose us to new risks as well as have an adverse effect on our business, financial condition, results of operations, and cash flows26% rewritten
- 20Damage to our reputation or brand image can adversely affect our business
- 21We may be unable to adequately protect our trade secrets and intellectual property rights against misappropriation or infringement, which may have a material adverse effect on our business
- 22We rely on licensing arrangements in production and other fields, and actions taken by any of our licensing partners could have a material adverse effect on our business
- 23Our ability to raise capital in the future may be limited, which could lead to delays in innovation and abandonment of our strategic initiatives
- 24Our long-lived assets recorded as of December 31, 2025 include $108.4 million of plant, equipment, leasehold improvements and operating lease right-of-use assets, $18.5 million of net intangible assets, and $48.8 million of goodwill78% rewritten
- 25Our failure to operate our business in accordance with the standards of the PCI Security Standards Council or other industry standards applicable to our customers, such as Payment Card Brands compliance standards, could have a material adverse effect on our business
- 26Prolonged military action in foreign conflicts has impacted and may continue to have adverse effects on the global economy, and such effects could materially adversely affect our business, operations, operating results and financial condition
- 27Conditions in the banking system and financial markets, including the failure of banks and financial institutions, could have an adverse effect on our business, financial condition and results of operations
- 28Environmental, health and safety laws and regulations, including climate change regulations, expose us to liability and any such liability may have a material adverse effect on our business47% rewritten
Risks Relating to Ownership of our Common Stock
- 29Certain stockholders own a significant percentage of our common stock, and such stockholders may influence major corporate decisions of the Company and our interests may conflict with the interests of other holders of our common stock49% rewritten
- 30The concentration of ownership by our significant stockholders and the sale or availability for sale of substantial amounts of our common stock may adversely impact the market price and liquidity of our common stock43% rewritten
- 31Conflicts of interest may arise because directors who are principals of or who were nominated by our significant stockholders serve on our Board of Directors44% rewritten
- 32Securities analysts may publish unfavorable research or reports about our business or may not publish at all, which could cause our stock price or trading volume to decline
- 33Our business and operations could be negatively affected by stockholder activism and securities litigation22% rewritten
- 34Certain provisions of our organizational documents and other contractual provisions may make it difficult for stockholders to change the composition of our Board of Directors and may discourage hostile takeover attempts that some of our stockholders may consider to be beneficial29% rewritten
- 35Our business and financial results may be materially adversely affected by various legal and regulatory proceedings
Other CPI Card Group 10-Ks
- FY2024 10-K risk factors37 risks
Customer concentration is high, with one customer accounting for 18 percent of net sales in 2024.
Filed Mar 04, 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.