Financial Data and Key Metrics Changes - Cash decreased to $12.3 million as of March 31, 2022, down from $14.2 million at the end of the previous year and $13.6 million at the end of Q1 2021 [21] - Revenue for Q1 2022 was $5 million, a 17% decrease from $6 million in Q1 2021, primarily due to approximately $1 million in potential revenue lost from COVID-19 lockdowns in Shanghai [24][25] - Gross margin for Q1 2022 was 46.4%, down nine points from 55.5% in Q1 2021, attributed to sales volume and mix [29] Business Line Data and Key Metrics Changes - Automotive electronics accounted for approximately 63% of orders in Q1 2022, continuing to be the primary market [9][26] - Consumables increased to 33% of revenue sequentially, up from 30% in 2021 and 27% in 2020 [26] - Software and services revenues rose to 15% of revenue in Q1 2022, up from 12% in the prior year [26] Market Data and Key Metrics Changes - International sales represented approximately 94.2% of revenue in Q1 2022, compared to 95.3% in the same period last year [26] - Bookings for Q1 2022 were $6.2 million, equal to Q4 2021, and up 16% from $5.4 million in Q1 2021 [27][28] Company Strategy and Development Direction - The company is focusing on expanding sales opportunities, particularly in the $25 billion to $30 billion microcontroller industry, emphasizing security provisioning [15] - Acknowledgment of the importance of a resilient supply chain strategy, especially in light of recent geopolitical and pandemic-related challenges [52][56] - Plans to celebrate its 50th anniversary with a series of fireside chats to engage with the investment community [18] Management's Comments on Operating Environment and Future Outlook - Management adjusted short-term growth expectations due to economic challenges, with a resumption of growth contingent upon reopening in China and stabilization of supply chains [19] - Confidence in the company's industry-leading automotive presence and secure programming technology platform to capitalize on future demand [20][34] Other Important Information - The company has been awarded over 20 U.S. and international patents related to SentriX and security [16] - A significant backlog of $4.1 million as of March 31, 2022, compared to $2.9 million at the end of Q4 2021, reflecting stronger bookings and lockdown impacts [31] Q&A Session Summary Question: Has the fallout from the Russian invasion of Ukraine helped your security business? - Management noted increased awareness of cybersecurity threats, particularly for IoT devices, highlighting the need for robust security strategies [36] Question: Can you review some of the cash used in the quarter for annual expenses? - The cash change was primarily due to one-time seasonal payments, including a dividend withholding tax and planned disbursements for annual compensation [37] Question: What are the capital expenditures for the year? - Expected capital expenditures are in the range of $600,000 to $700,000, with about half allocated for sales demo systems [38] Question: How do you think about projected cash flow going forward? - Cash flow is expected to align with adjusted EBITDA, with a strong balance sheet and no debt, allowing for fluctuations based on working capital [40] Question: Can you talk about the opportunities to penetrate new markets via SentriX? - SentriX has applicability in both automotive and industrial IoT markets, with a growing customer base in industrial applications [60] Question: What skills are the new Board members bringing to the company? - New Board members bring experience in manufacturing and software, which is expected to enhance the company's strategic direction [69]

Sales Performance - Data I/O's programming solutions generated 58% of total sales in 2021, up from 56% in 2020, driven by capacity, process improvement, and technology advancements [12]. - Adapter sales accounted for 30% of total sales in 2021, increasing from 28% in 2020, reflecting capacity utilization and new customer products [14]. - Software and maintenance sales represented 12% of total sales in 2021, down from 16% in 2020, influenced by the installed base and added capabilities [14]. - Net sales for 2021 were $25,835,000, an increase of 27.3% compared to $20,328,000 in 2020 [108]. - Net sales in the U.S. for 2021 were $2.6 million, an increase from $1.5 million in 2020 [21]. - International sales represented approximately 90% of net sales in 2021, totaling $23.2 million, up from $18.8 million in 2020 [22]. - Equipment sales rose to $14,989,000 in 2021, up from $11,480,000 in 2020, marking an increase of about 30.5% [129]. - U.S. net sales increased to $2.607 million in 2021 from $1.516 million in 2020, representing a growth of 72% [164]. Financial Performance - Gross margin for 2021 was $14,720,000, representing a gross margin percentage of 57.1%, up from $10,822,000 in 2020 [108]. - Net loss for 2021 was $555,000, a significant improvement from a net loss of $3,964,000 in 2020 [108]. - Adjusted EBITDA for 2021 was $1,451,000, compared to an adjusted EBITDA of $(366,000) in 2020 [95]. - Operating income improved to a loss of $273,000 in 2021 from a loss of $3.078 million in 2020, indicating a significant reduction in losses [164]. - The total income tax expense for 2021 was $112,000, a decrease from $387,000 in 2020, reflecting improved tax management [160]. Research and Development - Research and development expenditures were $6.6 million in 2021, representing 26% of net sales [28]. - Research and development expenses for 2021 were $6,635,000, slightly higher than $6,357,000 in 2020 [108]. - The company has approximately 20 U.S. and international awarded patents related to its SentriX platform [29]. Market Trends and Demand - The company experienced a resurgence of orders in Q2 2021, attributed to increased vaccinations and customer business resumption [9]. - Demand slowed in Q3 2021 due to semiconductor supply shortages impacting customer capacity expansion plans [9]. - Data I/O's solutions target high-growth markets, particularly automotive electronics and IoT systems, which are expected to drive future sales growth [15]. - Industry analysts project strong growth in automotive electronics over the next decade, indicating a favorable market outlook for Data I/O [9]. Supply Chain and Operations - The company has maintained a resilient supply chain model, ensuring operational continuity despite COVID-19 related challenges [9]. - The company faced a slowdown in demand in Q3 2021 due to semiconductor supply chain issues, impacting production plans [141]. - The company has implemented additional supplier monitoring and increased inventory stock levels of key parts to enhance supply chain resilience [141]. Assets and Liabilities - Total current assets increased to $25,273,000 in 2021 from $23,250,000 in 2020, reflecting a growth of 8.7% [104]. - Total assets rose to $29,057,000 in 2021, up from $25,592,000 in 2020, marking an increase of 13.5% [104]. - Total stockholders' equity increased to $19,853,000 in 2021 from $19,639,000 in 2020, reflecting a growth of 1.1% [105]. - Total accrued liabilities rose to $1,413,000 in 2021, compared to $1,307,000 in 2020, marking an 8.1% increase [146]. Employee and Compensation - The company employs 95 individuals, with 46 located outside the U.S. [30]. - Share-based compensation for the year ended December 31, 2021, was $1,238,000, compared to $1,467,000 in 2020 [114]. - The Employee Stock Purchase Plan saw 4,484 shares purchased in 2021 at an average price of $5.38 per share, compared to 7,814 shares at $3.71 in 2020 [153]. Miscellaneous - The company has not experienced difficulties related to export regulations and does not require export licenses for its products [22]. - The company has a diverse Board of Directors and is committed to ESG initiatives, including a conflict mineral policy [32]. - The company did not engage in any share repurchase programs in 2021 [158]. - No impairment or impairment-related charges were recorded in 2021, contrasting with $943,000 in impairments recognized in the fourth quarter of 2020 [165].

Financial Data and Key Metrics Changes - The company reported a strong annual revenue growth of 27% in 2021, with net sales in Q4 2021 reaching $6.4 million, up 29% from $4.9 million in Q4 2020 [8][29] - Gross margin increased to 54.4% in Q4 2021 from 47% in the prior year, and for the full year, gross margin was 57% compared to 53.2% in 2020 [35][26] - The net loss for Q4 2021 was $205,000 or $0.02 per share, significantly improved from a net loss of $1.6 million or $0.20 per share in Q4 2020 [39] Business Line Data and Key Metrics Changes - The SentriX Security Provisioning Platform saw a doubling of sales in 2021, contributing to the overall revenue growth [8] - Recurring and consumable revenues represented $2.9 million or 46% of total revenues in Q4 2021, up from $2.4 million in Q4 2020 [32] - Automotive sales accounted for 58% of total sales, consistent with strong growth in the automotive electronics market [25][21] Market Data and Key Metrics Changes - International sales represented approximately 85.3% of net sales for Q4 2021, showing a slight decrease from 89.9% in 2020 [33] - The company anticipates that 6 million electric vehicles will be shipped in 2022, up from 4 million in 2021, indicating a significant growth opportunity in the EV segment [9][10] Company Strategy and Development Direction - The company aims for double-digit bookings growth in 2022, with a target of doubling SentriX bookings [24][26] - Long-term goals include achieving 50% of consolidated revenue from recurring sales, which includes software, services, and consumables [27][70] - The company is focused on enhancing marketing and support capabilities to target new customers, both directly and through channel partners [22][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand for automotive electronics, despite challenges from silicon shortages and geopolitical events [45][48] - The company plans to implement further price increases in response to inflation and rising costs [15][31] - Management highlighted the importance of environmental, social, and governance (ESG) issues, indicating a commitment to sustainable business practices [17] Other Important Information - The company appointed two new board members, enhancing governance and expertise in automotive and security sectors [18][19] - The company celebrated its 50th year in business in 2022, positioning itself to capitalize on high-growth trends in the industry [25] Q&A Session Summary Question: What are the order patterns seen in Q1 and confidence in bookings outlook for 2022? - Management noted a good start to Q1, with underlying demand in the automotive sector expected to improve as silicon shortages lessen [44][45] Question: Clarification on gross margin outlook for 2022? - The gross margin outlook is for the full year, with potential volatility on a quarterly basis due to sales mix and currency fluctuations [49][50] Question: Impact of supply chain issues and customer response to price increases? - Most customers understand the price increases due to similar pressures they face, and the company has proactively managed its supply chain to mitigate impacts [51][52] Question: Are there specific bottlenecks in the supply chain? - Management indicated that supply chain issues vary daily, but the company has a resilient supply chain strategy to manage these challenges [58][60] Question: Commentary on recurring revenue and bookings growth? - The long-term goal is for recurring revenue to reach 50% of consolidated revenue, with bookings growth expected to exceed 10% in 2022 [69][70] Question: Operating expenses outlook? - Operating expenses are expected to remain relatively flat, with potential increases tied to inflation and sales volume [81][82]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number: 0-10394 DATA I/O CORPORATION (Exact name of registrant as specified in its charter) | --- | - ...

Data I/O Corporation (DAIO) Q3 2021 Earnings Conference Call October 29, 2021 5:00 PM ET Company Participants Jim Fanucchi - Darrow Associates, Investor Relations Anthony Ambrose - President & CEO Joel Hatlen - Vice President, COO & CFO Conference Call Participants Jaeson Schmidt - Lake Street Jeff Peterson - Austin Capital Orin Hirschman - AIGH Investment Partners Robert Anderson - Penbrook Management Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number: 0-10394 DATA I/O CORPORATION (Exact name of registrant as specified in its charter) 91-0864123 (St ...

Data I/O Corporation (DAIO) Q2 2021 Earnings Conference Call July 29, 2021 5:00 PM ET Company Participants Jordan Darrow - Darrow Associates, Investor Relations Anthony Ambrose - President & Chief Executive Officer Joel Hatlen - Vice President, Chief Operating Officer & Chief Financial Officer Conference Call Participants Jaeson Schmidt - Lake Street Orin Hirschman - AIGH Investment Partners Dave Kanen - Kanen Wealth Management Operator Good afternoon and welcome to the Data I/O Corporation Second Quarter 2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 Or ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number: 0-10394 DATA I/O CORPORATION (Exact name of registrant as specified in its charter) Washingto ...

Data I/O Corporation (DAIO) Q1 2021 Earnings Conference Call April 29, 2021 5:00 PM ET Company Participants Jordan Darrow - Darrow Associates, Investor Relations Anthony Ambrose - President & Chief Executive Officer Joel Hatlen - Vice President, Chief Operating Officer & Chief Financial Officer Conference Call Participants Jaeson Schmidt - Lake Street Jeff Peterson - Aston Capital Dave Kanen - Kanen Wealth Management Orin Hirschman - AIGH Investment Partners Avram Fisher - Long Cast Advisers Operator Good d ...

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Data I/O Corporation is a global leader in advanced programming and security deployment solutions for electronics manufacturing, navigating 2020's COVID-19 impacts while continuing product development - Data I/O is a **global market leader** in **advanced programming, security deployment, and IP protection solutions** for electronics manufacturing, focusing on flash memory, microcontrollers, and secure element devices[11](index=11&type=chunk) - The company's mission is to 'bring the world's electronic devices to life,' serving OEMs in **automotive electronics, consumer electronics, and IoT markets**, as well as programming center partners and EMS contract manufacturers[12](index=12&type=chunk) - In 2020, Data I/O **successfully managed the COVID-19 pandemic** by **prioritizing employee safety**, **maintaining operational facilities** in Shanghai and Redmond, and **preserving cash and working capital**, despite impacts on demand, travel restrictions, and chip shortages[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) - The company's product offerings include **automated programming systems** (PSV family, LumenX programmer) and **manual programming systems** (FlashPAK), with prices ranging from **$10,000 to $615,000**, and the **SentriX security provisioning system** is offered on a **pay-per-part use basis**[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk) Sales Type | Sales Type | 2020 Sales Percentage of Total Sales | 2019 Sales Percentage of Total Sales | | :------------------------------- | :----------------------------------- | :----------------------------------- | | Equipment Sales | 56% | 58% | | Adapter Sales | 28% | 26% | | Software and Maintenance Sales | 16% | 16% | [Item 1A. Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) Data I/O faces various risks, including ongoing COVID-19 effects, trade tensions, slow market adoption for new products, rapid technological changes, and reliance on single-source suppliers - The COVID-19 pandemic has significantly impacted Data I/O's business globally, affecting revenues, supply chains, employee safety, and customer engagement, with **93% of 2020 sales in international markets**[71](index=71&type=chunk)[72](index=72&type=chunk) - Changes in tariffs and trade issues, particularly between the U.S. and China, have negatively impacted gross margins and created business uncertainty, leading to some customers shifting production away from China[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - New product and service initiatives, especially in security deployment, face risks of slow market development and potential non-acceptance of new business models (e.g., pay-per-use), which could affect return on investment[78](index=78&type=chunk)[79](index=79&type=chunk) - Failure to adapt to rapid technological changes in the industry, such as new device package types, flash technology speeds, and proprietary security protocols, could negatively impact competitiveness and financial results[81](index=81&type=chunk)[82](index=82&type=chunk) - The company's concentration in **automotive electronics (53% of orders in 2020)** makes it vulnerable to demand fluctuations in this sector and increasing customer requirements for quality standards and liability[84](index=84&type=chunk) - Reliance on a small number of single-source suppliers for key components poses risks of shortages, price increases, and delays in product introductions or shipments[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) - International operations, which account for a significant majority of sales (**93% in 2020**), expose the company to risks from foreign currency fluctuations, economic uncertainty, regulatory changes, and difficulties in collecting foreign receivables[111](index=111&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) - The company has a history of operating losses in **four of the last ten years** and may need to raise additional capital, with future access to funding being uncertain[120](index=120&type=chunk)[123](index=123&type=chunk)[126](index=126&type=chunk) [Item 1B. Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report for the period - The company has **no unresolved staff comments** as of the reporting date[135](index=135&type=chunk) [Item 2. Properties](index=24&type=section&id=Item%202.%20Properties) Data I/O operates its principal facilities in Redmond, Washington, and has leased offices in Shanghai, China, and near Munich, Germany - Data I/O's principal facilities are located in Redmond, Washington (approx. **20,460 sq ft**, lease until July 31, 2022), Shanghai, China (approx. **19,400 sq ft**, lease until October 31, 2021), and near Munich, Germany (approx. **4,895 sq ft**, lease until February 28, 2022, with a 5-year extension option)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) Annual Lease Payments (in thousands) | Location | 2020 Annual Rental Payments | 2019 Annual Rental Payments | | :---------------- | :-------------------------- | :-------------------------- | | Redmond, WA | $361 | $351 | | Shanghai, China | $301 | $305 | | Munich, Germany | $62 | $57 | [Item 3. Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) As of December 31, 2020, Data I/O was not involved in any legal proceedings or indemnification claims that would materially adversely affect its operations or financial position - As of December 31, 2020, Data I/O was **not a party to any legal proceedings** or aware of any indemnification agreement claims that would have a material adverse effect on its results of operations or financial position[140](index=140&type=chunk) [Item 4. Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Data I/O Corporation - Mine Safety Disclosures are **not applicable** to Data I/O Corporation[141](index=141&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=25&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Data I/O's Common Stock is listed on the NASDAQ Capital Market under the symbol DAIO, with 431 shareholders of record as of March 22, 2021, and no regular cash dividends anticipated - Data I/O's Common Stock is listed on the NASDAQ Capital Market with the symbol **DAIO**[144](index=144&type=chunk) - As of March 22, 2021, there were approximately **431 shareholders of record**[145](index=145&type=chunk) - The company has not paid cash dividends on its Common Stock since a special dividend in March 1989 and does not anticipate paying regular cash dividends in the foreseeable future[145](index=145&type=chunk) [Item 6. Selected Financial Data](index=25&type=section&id=Item%206.%20Selected%20Financial%20Data) This section is not applicable for Data I/O Corporation - Selected Financial Data is **not applicable** for this report[148](index=148&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Data I/O reported a second consecutive loss in 2020 due to a pandemic-related downturn and significant investments in security deployment, despite maintaining a strong cash position and balance sheet - Data I/O sustained its **second loss in six years in 2020**, driven by a pandemic-related downturn in orders and significant investments in its security deployment business[150](index=150&type=chunk) - The company is strategically investing in the long term, particularly in **automotive electronics and IoT markets**, and launched a **second generation of SentriX tools and capabilities in 2020**[152](index=152&type=chunk)[153](index=153&type=chunk) Net Sales by Product Line (in thousands) | Product Line | 2020 Net Sales | Change (YoY) | 2019 Net Sales | | :------------------------------- | :------------- | :----------- | :------------- | | Automated programming systems | $16,509 | (0.8%) | $16,642 | | Non-automated programming systems | $3,819 | (22.5%) | $4,926 | | **Total programming systems** | **$20,328** | **(5.7%)** | **$21,568** | Net Sales by Location (in thousands) | Location | 2020 Net Sales | % of Total | Change (YoY) | 2019 Net Sales | % of Total | | :-------------- | :------------- | :--------- | :----------- | :------------- | :--------- | | United States | $1,516 | 7.5% | (12.6%) | $1,735 | 8.0% | | International | $18,812 | 92.5% | (5.1%) | $19,833 | 92.0% | Gross Margin (in thousands) | Metric | 2020 | Change (YoY) | 2019 | | :---------------------- | :---------- | :----------- | :---------- | | Gross margin | $10,822 | (13.8%) | $12,550 | | Percentage of net sales | 53.2% | | 58.2% | Research and Development Expense (in thousands) | Metric | 2020 | Change (YoY) | 2019 | | :------------------------ | :-------- | :----------- | :-------- | | Research and development | $6,357 | (1.5%) | $6,451 | | Percentage of net sales | 31.3% | | 29.9% | Impairment & Related Charges (in thousands) | Category | 2020 | | :---------------------------------------- | :---- | | Impairment charges (equipment, software, prepaid royalties) | $652 | | Obsolete inventory charges | $291 | | **Total impairment & related charges** | **$943** | Key Financial Metrics (in thousands) | Metric | 2020 | 2019 | | :---------------------------------------- | :---------- | :---------- | | Net Income (loss) | $(3,964) | $(1,187) | | EBITDA | $(2,776) | $(341) | | Adjusted EBITDA (excl. equity comp. & impairment) | $(366) | $830 | | Working Capital | $18,059 | $18,497 | [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable for Data I/O Corporation - Quantitative and Qualitative Disclosures About Market Risk are **not applicable** for this report[200](index=200&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=35&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Data I/O's audited consolidated financial statements for 2020 and 2019, including balance sheets, statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, with an unqualified opinion from Grant Thornton LLP - Grant Thornton LLP audited the consolidated financial statements for Data I/O Corporation for the periods ended December 31, 2020 and 2019, issuing an **unqualified opinion**[204](index=204&type=chunk) - A critical audit matter identified was the **net realizable value of inventory**, due to the complexity and subjectivity of demand forecasting, which requires significant auditor judgment[210](index=210&type=chunk)[211](index=211&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Metric | December 31, 2020 | December 31, 2019 | | :------------------------------------ | :---------------- | :---------------- | | Cash and cash equivalents | $14,167 | $13,936 | | Total Current Assets | $23,250 | $23,979 | | Total Assets | $25,592 | $28,281 | | Total Current Liabilities | $5,191 | $5,482 | | Total Stockholders' Equity | $19,639 | $21,530 | Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | 2020 | 2019 | | :------------------------------------ | :---------- | :---------- | | Net sales | $20,328 | $21,568 | | Gross margin | $10,822 | $12,550 | | Operating income (loss) | $(3,078) | $(1,278) | | Net income (loss) | $(3,964) | $(1,187) | | Basic earnings (loss) per share | $(0.48) | $(0.14) | | Diluted earnings (loss) per share | $(0.48) | $(0.14) | Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 2020 | 2019 | | :---------------------------------------- | :-------- | :-------- | | Net cash provided by (used in) operating activities | $631 | $(2,096) | | Cash provided by (used in) investing activities | $(860) | $(548) | | Cash provided by (used in) financing activities | $(144) | $(1,677) | | Cash and cash equivalents at end of period | $14,167 | $13,936 | - The valuation allowance for deferred tax assets increased by **$1,422,000 in 2020**, reflecting uncertainty in utilizing these assets due to the company's volatile loss history and cyclical industry[312](index=312&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=55&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements with accountants on accounting and financial disclosure for the reported period - There were **no changes in or disagreements with accountants** on accounting and financial disclosure[324](index=324&type=chunk) [Item 9A. Controls and Procedures](index=56&type=section&id=Item%209A.%20Controls%20and%20Procedures) Data I/O's management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2020, with the company exempt from auditor attestation under Sarbanes-Oxley Section 404(b) - As of December 31, 2020, Data I/O's disclosure controls and procedures were evaluated and deemed **effective at the reasonable assurance level** by management, including the CEO and CFO[327](index=327&type=chunk) - Management assessed the effectiveness of the company's internal control over financial reporting as of December 31, 2020, using the COSO framework and concluded it was **effective**[331](index=331&type=chunk) - Data I/O, as a smaller reporting company, is **exempt from the auditor attestation report** on internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act[332](index=332&type=chunk) [Item 9B. Other Information](index=56&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - There is **no other information to report** under this item[334](index=334&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=57&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding Data I/O's directors and executive officers is incorporated by reference from the Proxy Statement for its May 20, 2021 Annual Meeting, and the company has adopted a Code of Ethics for all personnel - Information on directors is **incorporated by reference** from the Proxy Statement for the May 20, 2021 Annual Meeting of Shareholders[337](index=337&type=chunk) - Information on executive officers is provided in Item 1 of Part I under 'Executive Officers of the Registrant'[337](index=337&type=chunk) - Data I/O has adopted a **Code of Ethics** for all directors, officers, and employees, emphasizing legal and ethical conduct, available on its corporate governance website[338](index=338&type=chunk) [Item 11. Executive Compensation](index=57&type=section&id=Item%2011.%20Executive%20Compensation) Details on executive compensation are incorporated by reference from the 'Executive Compensation' section of Data I/O's Proxy Statement for its May 20, 2021 Annual Meeting of Shareholders - Executive compensation information is **incorporated by reference** from the Proxy Statement for the May 20, 2021 Annual Meeting of Shareholders[339](index=339&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=57&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and related stockholder matters is incorporated by reference from the Proxy Statement for the May 20, 2021 Annual Meeting, with 28,175 securities to be issued upon exercise of outstanding options at a weighted-average exercise price of $4.97 as of December 31, 2020 - Security ownership information is **incorporated by reference** from the Proxy Statement for the May 20, 2021 Annual Meeting of Shareholders[340](index=340&type=chunk) Equity Compensation Plan Information as of December 31, 2020 | Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted–average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance | | :-------------------------------------------------------------------- | :------------------------------------------------------------------------ | :---------------------------------------------------------- | :----------------------------------------------------------- | | Equity compensation plans approved by security holders | 3,175 | $4.90 | 286,925 | | Equity compensation plans not approved by security holders (Inducement grant) | 25,000 | $4.98 | - | | **Total** | **28,175** | **$4.97** | **286,925** | [Item 13. Certain Relationships and Related Transactions and Director Independence](index=58&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the Proxy Statement for Data I/O's 2020 Annual Meeting of Shareholders - Information on certain relationships, related transactions, and director independence is **incorporated by reference** from the Proxy Statement for the 2020 Annual Meeting of Shareholders[343](index=343&type=chunk) [Item 14. Principal Accounting Fees and Services](index=58&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information concerning principal accounting fees and services is incorporated by reference from the Proxy Statement for Data I/O's May 20, 2021 Annual Meeting of Shareholders - Information on principal accounting fees and services is **incorporated by reference** from the Proxy Statement for the May 20, 2021 Annual Meeting of Shareholders[343](index=343&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=59&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed as part of the 10-K report, including executive compensation plans, articles of incorporation, and material contracts, along with the Index to Financial Statements and Schedule II - This item lists all exhibits, including **executive compensation plans, articles of incorporation, instruments defining security holder rights, and material contracts**[346](index=346&type=chunk)[348](index=348&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk)[372](index=372&type=chunk) - The financial statements and supplementary data are indexed, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations, Comprehensive Income (Loss), Stockholders' Equity, Cash Flows, and Notes to Consolidated Financial Statements[364](index=364&type=chunk) Schedule II – Consolidated Valuation and Qualifying Accounts (in thousands) | Year Ended December 31, | Balance at Beginning of Period | Charged/ (Credited) to Costs and Expenses | Deductions | Balance at End of Period | | :---------------------- | :----------------------------- | :---------------------------------------- | :--------- | :----------------------- | | 2019 (Allowance for bad debts) | $75 | $5 | $- (1) | $80 | | 2020 (Allowance for bad debts) | $80 | $(14) | $- (1) | $66 | [Item 16. Form 10-K Summary](index=63&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section indicates that no Form 10-K Summary is provided - **No Form 10-K Summary is provided**[386](index=386&type=chunk) [Signatures](index=64&type=section&id=Signatures) The report is duly signed on behalf of Data I/O Corporation by its President and Chief Executive Officer, Anthony Ambrose, and other principal executive officers and directors, as of March 26, 2021 - The report is signed by **Anthony Ambrose, President and Chief Executive Officer**, and **Joel S. Hatlen, Chief Operating and Financial Officer**, along with other directors, on March 26, 2021[389](index=389&type=chunk)[390](index=390&type=chunk)