1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K_(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934For the fiscal year ended March 31,2024ORoTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIESEXCHANGE ACT OF 1934For
2、 the transition period from toCommission file number 001-08762ITERIS,INC.(Exact Name of Registrant as Specified in Its Charter)Delaware95-2588496(State or Other Jurisdiction of Incorporation or Organization)(I.R.S.Employer Identification No.)1250 S.Capital of Texas Hwy.,Building 1,Suite 330,Austin,T
3、exas78746(Address of Principal Executive Offices)(Zip Code)Registrants Telephone Number,Including Area Code:(512)716-0808Securities registered pursuant to Section 12(b)of the Act:Title of each classTradingSymbol(s)Name of each exchange on whichregisteredCommon Stock,$0.10par valueITIThe Nasdaq Stock
4、 Market LLCSecurities registered pursuant to Section 12(g)of the Act.NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes o No xIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
5、Section 15(d)of the Act.Yes oNo xIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of theSecurities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to filesuch reports),and(
6、2)has been subject to such filing requirements for the past 90 days.Yes x No oIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submittedpursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(o
7、r for such shorter period thatthe registrant was required to submit such files).Yes x No o2025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm1/91Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a
8、non-accelerated filer,a smallerreporting company,or an emerging growth company.See definitions of large accelerated filer,accelerated filer,smallerreporting company and emerging growth company in Rule 12b-2 of the Exchange Act.Large accelerated fileroAccelerated filerxNon-accelerated filero Smaller
9、reporting company xEmerging growth company oIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition periodfor complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.oIndicate
10、 by check mark whether the registrant has filed a report on and attestation to its managements assessment of theeffectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)bythe registered public accounting firm that prepared or issued
11、 its audit report.xIf securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of theregistrant included in the filing reflect the correction of an error to previously issued financial statements.oIndicate by check mark whether any of thos
12、e error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to240.10D-1(b).oIndicate by check mark whether the registrant is a shell company(as defined in Exc
13、hange Act Rule 12b-2).Yes o No xThe aggregate market value of the registrants common stock held by non-affiliates of the registrant as of September 29,2023was approximately$147,728,051.For the purposes of this calculation,shares owned by officers,directors,and greater than 10%stockholders known to t
14、he registrant have been deemed to be owned by affiliates.This determination of affiliate status is notnecessarily a conclusive determination for other purposes.As of June 11,2024,there were 42,975,222 shares of our common stockoutstanding.DOCUMENTS INCORPORATED BY REFERENCEPart III of this report in
15、corporates by reference certain information from the registrants definitive proxy statement for the 2024Annual Meeting of Stockholders,which will be filed with the Securities and Exchange Commission not later than 120 days afterthe end of the fiscal year covered by this Annual Report on Form 10-K.20
16、25/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm2/91Table of ContentsITERIS,INC.ANNUAL REPORT ON FORM 10-KFOR THE FISCAL YEAR ENDED MARCH 31,2024TABLE OF CONTENTSPART IITEM 1.BUSINESS4ITEM 1A.RISK FACTORS11ITEM 1B.UNRESOLVED STAFF COMMENTS25I
17、TEM 1C.CYBERSECURITY25ITEM 2.PROPERTIES26ITEM 3.LEGAL PROCEEDINGS26ITEM 4.MINE SAFETY DISCLOSURES26PART IIITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIES27ITEM 6.RESERVED27ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITI
18、ON AND RESULTS OFOPERATIONS27ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK38ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA39ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE68ITEM 9A.CONTROLS AND PROCEDURES68ITEM 9B.OTHER INFORMATION7
19、0ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS71PART IIIITEM 10.DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE71ITEM 11.EXECUTIVE COMPENSATION71ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS71ITEM 13.CERTAIN
20、RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE71ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES71PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES72ITEM 16.FORM 10-K SUMMARY74SIGNATURES75Unless otherwise indicated in this report,the“Company,”“we,”“us”and“our”refer to Iteris,
21、Inc.BlueARGUS,BlueTOAD,ClearData,ClearFleet,ClearGuide,ClearMobility,ClearRoute,CVIEWplus,Inspect,Iteris,PedTrax,SmartCycle,SmartCycle Bike Indicator,Spectra,TrafficCarma,TrafficCast,UCRLink,Vantage,VantageARGUS CV,Vantage Apex,Vantage Next,VantagePegasus,VantageRadius,VantageLive!,Vantage Vector,Ve
22、locity,and VersiCam are among,but not all of,the trademarks of Iteris,Inc.Any other trademarks or trade names mentionedherein are the property of their respective owners.22025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm3/91Table of Contents
23、Cautionary Statement Regarding Forward-Looking StatementsThis report contains forward-looking statements(within the meaning of the Private Securities Litigation Reform Act of 1995)that are based on our current expectations,estimates and projections about our business and our industry,and reflectmana
24、gements beliefs and certain assumptions made by us based upon information available to us as of the date of this report.When used in this report and the information incorporated herein by reference,the words“expect,”“believe,”“intend,”“plan,”“should,”“will,”“may,”might,“anticipate,”“estimate,”“could
25、,”“should,”and similar expressions or variations of thesewords are intended to identify forward-looking statements.These forward-looking statements include,but are not limited to,statements regarding our anticipated growth,sales,revenues,expenses,profitability,capital needs,backlog,manufacturingcapa
26、bilities,the market acceptance of our products and services,competition,the impact of any current or future litigation,theimpact of recent accounting pronouncements,the impacts of ongoing and new supply chain constraints,the status of our facilitiesand product development,reliance on key personnel,g
27、eneral economic conditions,including rising interest rates,the impact of anycurrent or future volatility or instability in national or international political conditions,any shutdown of the United States federalgovernment,future impacts of COVID-19 or other future pandemics,and other characterizatio
28、ns of future events or circumstancesare forward-looking statements.You should not place undue reliance on these forward-looking statements that speak only as of thedate hereof.These statements are not guarantees of future performance and are subject to certain risks and uncertainties that couldcause
29、 our actual results to differ materially and adversely from those projected.We encourage you to carefully read this annualreport on Form 10-K in its entirety,including the various disclosures made by us which describe certain factors which could affectour business,such as those set forth in the“Risk
30、 Factors”of Part 1,Item 1A of this report,before deciding to invest in ourCompany or to maintain or increase your investment.We undertake no obligation to revise or update publicly any forward-lookingstatement for any reason,including to reflect events or circumstances after the date hereof or to re
31、flect the occurrence ofunanticipated events.32025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm4/91Table of ContentsPART IITEM 1.BUSINESSDescription of BusinessIteris,Inc.(referred to in this report as“Iteris”,the“Company”,“we”,“our”,and“us”)
32、is a provider of smart mobilityinfrastructure management solutions.Our cloud-enabled solutions help public transportation agencies,municipalities,commercialentities and other transportation infrastructure providers monitor,visualize,and optimize mobility infrastructure to make mobilitysafe,efficient
33、,and sustainable for everyone.As a pioneer in intelligent transportation systems(“ITS”)technology,our intellectual property,advanced detection sensors,mobility and traffic data,software-as-a-service(“SaaS”)offerings,mobility consulting services,and managed services represent acomprehensive range of
34、smart mobility infrastructure management solutions that we distribute to customers throughout the UnitedStates(“U.S.”)and internationally.We believe our products,solutions and services increase vehicle and pedestrian safety and decrease congestion within ourcommunities,while also reducing environmen
35、tal impact,including vehicle carbon emissions.We continue to make significant investments to leverage our existing technologies and further enhance our advanced detectionsensors,SaaS portfolio,mobility data sets,mobility consulting services,and managed services.As we are always mindful of capitalall
36、ocation,we apply significant effort to evaluate and prioritize these investments.Likewise,we are always exploring strategicalternatives intended to optimize the value of our Company.Iteris was incorporated in Delaware in 1987 and has operated in its current form since 2004.Our principal executive of
37、fices arelocated at 1250 S Capital of Texas Hwy,Bldg.1,Suite 330,Austin TX 78746,and our telephone number at that location is(512)716-0808.Our website address is .The inclusion of our website address in this report does not include orincorporate by reference into this report any information on,or ac
38、cessible through,our website.Our annual reports on Form 10-K,quarterly reports on Form 10-Q and current reports on Form 8-K,together with amendments to these reports,are available on theInvestor Relations section of our website,free of charge,as soon as reasonably practicable after such material is
39、electronicallyfiled with,or furnished to,the U.S.Securities and Exchange Commission(“SEC”).Developments Impacting our BusinessCOVID-19Although COVID-19 has entered an endemic stage,COVID-19(including new variants of COVID-19)or other futurepandemics may adversely affect the global economic condition
40、s,including possible additional supply chain disruptions,workplacedislocations,economic contraction,and negative pressure on customer budgets and customer sentiment.When COVID-19 wasconsidered a public health emergency,we took actions to preserve our liquidity,manage cash flow and strengthen our fin
41、ancialflexibility.Such actions included,but were not limited to,reducing our discretionary spending,reducing capital expenditures,andimplementing restructuring activities.Our products require specialized parts,some of which became more difficult to source during the COVID-19 pandemic.Insome cases,we
42、 had to purchase such parts from third-party brokers at substantially higher prices.The Companys strategies tomitigate global supply chain issues included re-designing certain circuit boards to accommodate computer chips that are morereadily available in the market at more reasonable prices,and accu
43、mulating inventory in the first two quarters of the fiscal yearended March 31,2023(“Fiscal 2023”).We also placed non-cancellable inventory orders for certain products in advance of ournormal lead times to secure normal and incremental future supply and capacity.We curtailed the increase in inventory
44、 purchases and in particular components purchased in the secondary markets in thesecond half of Fiscal 2023,and the Company currently does not expect to accumulate inventory in the same magnitude in futureperiods.However,if the Company encounters additional supply chain constraints again in the futu
45、re,it may need to further adjustits operations to maintain sufficient liquidity.Restructuring ActivitiesTo help offset increases in supply chain costs in Fiscal 2023,on May 12,2022,our Board of Directors approved restructuringactivities to better position the Company for increased profitability and
46、growth.The Company incurred employee separation costsin relation to these activities,which were included in restructuring charges on the statement of operations(see Note 3,Restructuring Activities,to the Financial Statements for more information).2025/5/19 10:22iti-20240331https:/www.sec.gov/Archive
47、s/edgar/data/350868/000035086824000016/iti-20240331.htm5/9142025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm6/91Table of ContentsProducts and ServicesIteris provides comprehensive smart mobility infrastructure management solutions for publi
48、c-sector and private-sectorcustomers primarily located in North America.These solutions include traveler information systems,transportation performancemeasurement software,traffic analytics software,transportation operations software,transportation-related data sets,advancedsensing devices,managed s
49、ervices,traffic engineering services,and mobility consulting services.Software SolutionsIteris offers our public-sector and private-sector customers a portfolio of industry-leading smart mobility infrastructuresoftware solutions.These software solutions include ClearGuide,ClearRoute,Commercial Vehic
50、le Operations(“CVO”),TrafficCarma,VantageLive!and VantageARGUS CV(previously known as BlueARGUS)as described below.ClearGuide,which is provided on a software-as-a-service basis(“SaaS”),is a state-of-the-art mobility intelligence andtransportation performance analytics solution.It utilizes a wide ran
51、ge of data resources and analytical techniques todetermine current and future traffic patterns to enable the effective performance analysis and management of trafficinfrastructure resources at various levels highway,arterial(i.e.,corridor),or intersection.At times,we refer tointersection performance
52、 analytics as signal performance measurement(“SPM”).ClearGuide users can measure how atransportation network is performing and identify potential areas of improvement.These applications are also capable ofproviding users with predictive traffic analytics,and easy-to-use visualization and animation f
53、eatures based on historicaltraffic conditions.ClearRoute delivers contextual,real-time,actionable mobility intelligence and traveler information services on a platform-as-a-service basis.ClearRoute provides multimodal,multilingual,traveler information via mobile apps,websites,emailand text alerts,an
54、d Interactive Voice Response(“IVR”).The ClearRoute solution benefits from a powerful,flexible andstreamlined infrastructure to help reduce congestion and improve safety and mobility for transportation networks acrossthe country,and facilitates frictionless interoperability,flexible provisioning,and
55、robust management of customer focuseddata.Commercial Vehicle Operations and vehicle safety compliance applications,which are provided on a SaaS basis,includevarious applications branded as ClearFleet,CVIEWplus,and Inspect.Collectively,these software applications supportstate-based commercial vehicle
56、s operations by storing and distributing intrastate and interstate commercial vehicleinformation for local,state,and federal agency roadside and enforcement operations.TrafficCarma,which is easily white labeled,is the first mobile application focused on the 120 million U.S.dailycommuters and their j
57、ourneys to and from work,train stations,airports,sporting events and other destinations.TrafficCarma provides advice on known route choices,not turn-by-turn navigation.It is personalized for peoples dailycommutes and the roads they drive most.Verified crowdsourced content is combined with road speed
58、 data,public agencyreports,camera imaging and other metrics and delivers users information relevant to their commute and other personalroutes.VantageLive!is a SaaS solution that allows users to collect,process and analyze advanced intersection data from ourVantage sensors,as well as to view and unde
59、rstand intersection activity.VantageARGUS CV(previously BlueARGUS)is a SaaS solution that collects,analyzes,and visualizes variousinformation related to travel times,speeds,and origin-destination from our BlueTOAD Spectra sensors and connectedvehicle information from our BlueTOAD Spectra RSU sensors
60、.Mobility Data SetsClearData is the enhanced mobility data output of the Iteris ClearMobility Platform,a suite of data integration and analyticsengines that aggregates and validates both proprietary and diversely sourced data inputs,including incidents,construction andconnected vehicle GPS probes.Fo
61、llowing processing and quality assurance,ClearData reflects real-time road conditions and isdelivered to public-sector and private-sector customers via subscription-based direct data feeds or application programminginterfaces(“APIs”),or through ClearGuide,our mobility intelligence and transportation
62、 performance analytics software solution.The complex,dynamic nature of roadway traffic cannot be explained by any single data source.ClearData resolves data conflictsthrough proprietary computerized algorithms and selective quality control from experienced traffic analysts.52025/5/19 10:22iti-202403
63、31https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm7/912025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm8/91Table of ContentsAdvanced SensorsIteris offers advanced intersection detection and other fixed traffi
64、c sensors that collectively comprise our two sensor families Vantage and BlueTOAD.Increasingly,we bundle communications systems and traffic data collection applications(e.g.,VantageLive!and VantageARGUS CV)with our sensor products.The Vantage family of sensors uses advanced image processing technolo
65、gy,radar technology and other techniques to observemulti-modal traffic(e.g.,vehicle,bicycle,and pedestrian),translate these observations into structured data,and apply sophisticated,proprietary algorithms to this structured data to optimize traffic signal performance in real-time.Certain Vantage sen
66、sors applymachine learning techniques for enhanced object classification.In addition to detecting the presence of objects,our Vantagesystems record vehicle count,speed and other traffic information used in traffic management systems.Thus,our Vantage systemsgive traffic managers the tools to mitigate
67、 roadway congestion by visualizing and analyzing traffic patterns,allowing them tomodify traffic signal timing to improve traffic flow.Our various software components complement our Vantage detection systemsby providing integrated platforms to manage and view detection assets remotely over a network
68、 connection,as well as a mobileapplication for viewing anywhere.The Vantage family of sensors includes Vantage Apex,Vantage Next,VantagePegasus,VantageRadius,Vantage Vector,Velocity,SmartCycle,SmartCycle Bike Indicator,VersiCam,PedTrax,and P-Series products.Vantage Apex is the industrys first full 1
69、080p high-definition(“HD”)video and 4D/HD radar hybrid sensor withintegrated artificial intelligence(“AI”)algorithms.Vantage Apex provides precise and detailed detection,tracking andclassification of traffic.Vantage Next uses a powerful processor that enables future functional growth while maintaini
70、ng proven Iteris videodetection performance and reliability.The architecture supports expanding ITS applications and easily integrates withexisting technologies and is anticipated to integrate with future technologies.VantagePegasus offers wireless broadband communications for transportation systems
71、.VantagePegasus wireless networksare built with carrier grade radio components that deliver wireless connectivity and the bandwidth for communicationsfrom remote sites to a centralized host system.VantageRadius is the industrys leading 4D high-definition radar detection system with an integrated hig
72、h-resolution videocamera for traffic monitoring and detection verification.Vantage Vector is a hybrid video and radar detection sensor with a wide range of capabilities,including stop bar andadvanced zone detection,which enable advanced safety and adaptive control applications.Velocity takes advanta
73、ge of the large number of vehicles that are driving with Bluetooth or Wi-Fi enabled devices such assmart phones.Each Velocity reader senses a devices unique“MAC”address as they pass a reader station and transmitsthe time and location of the device to a central host system.As devices are detected at
74、successive Velocity readers,theHost System calculates average travel times and speeds for a roadway segment.The device specific network addressremains totally anonymous.SmartCycle capability,which can effectively differentiate between bicycles and other vehicles with a single videodetection camera,i
75、s available with all of our Vantage systems.SmartCycle enables more efficient signalized intersections,improved traffic throughput and increased cyclist safety.Agencies using bicycle timing benefit from bicycle-specificvirtual detection zones that can be placed anywhere within the approaching traffi
76、c lanes,eliminating the need for separatebicycle-only detection systems.SmartCycle Bike Indicator,which leverages the SmartCycle bicycle detection algorithm,is a device that mounts ontotraffic signals and illuminates when cyclists waiting at an intersection have been detected,allowing cyclists to av
77、oidinteracting with vehicle traffic and without pushing pole-mounted buttons.VersiCam,an integrated camera and processor video detection system,is a cost-efficient video detection system forsmaller intersections that require only a few detection points.PedTrax capability,which is also available with
78、 all of our Vantage systems,provides bi-directional pedestrian countingand speed tracking within the crosswalk to help improve signal timing efficiency,as well as providing an additional datastream to existing vehicle and bicycle counts.62025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/d
79、ata/350868/000035086824000016/iti-20240331.htm9/912025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm10/91Table of ContentsP-Series detection cameras are integrated machine vision processors and cameras,designed for use on all types ofintersec
80、tions outside of North America.The BlueTOAD product family combines unique MAC address capture with the latest CV technologies.The combination ofthese two technologies provides customers with a market leading sensor along with a comprehensive data set that enables advancedanalytics through our SaaS
81、offerings.The BlueTOAD family of sensors includes BlueTOAD Spectra and BlueTOAD Spectra CV,both of which we bundle with a cloud-based software application branded as VantageARGUS CV.BlueTOAD Spectra is a complete system for identifying the travel times of vehicles using advanced Bluetooth re-identif
82、ication techniques.This provides traffic flow information for vehicle travel as well as Origin-Destinationinformation.BlueTOAD Spectra CV is a full-featured connected vehicle and travel time information system.In addition to travel timesand vehicle speeds,it communicates vital safety and mobility in
83、formation via both DSRC and C-V2X from infrastructureto vehicles and other users.In select territories,the Company also sells certain complementary original equipment manufacturer(“OEM”)products for thetraffic intersection market,which include,among other things,traffic signal controllers and traffi
84、c signal equipment cabinets.We believe that future growth domestically and internationally for our Vantage family of products will depend,in part,on thecontinued replacement of traditional in-pavement loop technology with above-ground video and radar detection technologies tomanage traffic.Managed S
85、ervicesIteris Managed Services include traffic management centers(“TMC”)design,staffing,and operations services for publicagencies,whether they need to create a new TMC or migrate an existing TMC network to a virtual environment.Iteris partnerswith agencies to augment their internal capability and p
86、rovide the foundation and expertise required to successfully implementvirtual TMCs to support goals such as capital or recurring cost savings,operation from any location,and staff security andflexibility.Additionally,Iteris managed services combine SaaS,smart sensors and consulting expertise to proa
87、ctively address thechallenges of monitoring and maintaining intersections,arterial roads and highways along with their related in-field technology.These services include arterial management and asset management managed services.Our asset management managed servicecombines innovative traffic optimiza
88、tion with hardware inventory and maintenance.With Iteris Managed Services,public transportation agencies,real estate developers,construction firms,and event operatorsare provided the opportunity to save time and money while keeping road users safer and ensuring that traffic flows efficiently.Traffic
89、 Engineering and Mobility ConsultingOur traffic engineering and mobility consulting services include planning,design,development and implementation ofsoftware and hardware-based ITS solutions that integrate sensors,video surveillance,computers and advanced communicationsequipment to enable public ag
90、encies to monitor,control and direct traffic flow,assist in the quick dispatch of emergency crews,anddistribute real-time information about traffic conditions.Our services also include planning,design,implementation,operation andmanagement of surface transportation infrastructure systems.We perform
91、analysis and study goods movement,provide traveldemand forecasting and systems engineering,and identify mitigation measures to reduce traffic congestion.ClearMobility PlatformWith the Companys introduction of the ClearMobility Platform,we aligned our entire portfolio of solutions under a commonbrand
92、ing structure.We believe this alignment will drive internal synergies,increase our cross-sell rate,enhance sales productivity,and increase market awareness of our entire solutions portfolio.Additionally,the ClearMobility Platform enables seamlessinteroperation among our solutions via a common mobili
93、ty data management engine,API framework,and microservices ecosystemthat provides standardized data ingestion,cleansing,and analytics,as well as authentication and policy-based security for eachcomponent of the ClearMobility Platform.Our ClearMobility Platform is both horizontally scalable and third-
94、party extensible.72025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm11/91Table of ContentsOur process of developing,enhancing,aligning,harmonizing,and optimizing our portfolio of individual solutions is anongoing process,for which the Company
95、s chief operating decision maker(“CODM”)evaluates financial and operationalperformance holistically.As such,we report as a single operating segment.Market ConditionsCurrently,over 90%of our revenues are attributable to public-sector customers.Therefore,most of our revenues depend onstate and local g
96、overnment funding,and to a lesser extent federal governmental funding.In some cases,this funding is appropriatedannually through the respective legislative process.In other cases,various dedicated funding mechanisms exist to supporttransportation infrastructure and related projects,including,but not
97、 limited to dedicated sales and gas tax measures,vehicle andpermit fees,and other alternative dedicated funding sources.Additionally,some of our activities may be funded through bondmeasures.We believe that overall demand for our solutions will continue to depend,at least in part,on the federal and
98、local governmentsuse of funds,and as in the past,our business may be,at times,adversely affected by governmental budgetary issues.TheInfrastructure Investment and Jobs Act(“IIJA”)became effective on November 15,2021.The IIJA will contribute$1.2 trillion tofund physical infrastructure and public work
99、s,adding$550 billion to existing levels of transportation-specific funding.Within thatfunding pool,areas of direct relevance to Iteris include$110 billion for roads,bridges and major projects,$39 billion for publictransit,and$11 billion for transportation safety.However,delays in the obligation of a
100、ppropriated funding and debates related tothe federal debt ceiling may cause uncertainty regarding the availability of transportation funds in federal,state and local budgets.Although the pace of actual spending of IIJA funds may lag behind the appropriation process,sometimes significantly,the funds
101、appropriated can continue to be spent after the IIJA expires.Sales and MarketingWe market and sell our software,mobility data,managed services,traffic engineering,and mobility consulting services togovernment agencies pursuant to negotiated contracts that involve competitive bidding and specific qua
102、lification requirements.Most of our contracts are with federal,state and local municipal customers,and generally provide for cancellation or renegotiationat the option of the customer upon reasonable notice and fees paid for modification.We generally use selected members of ourtraffic engineering,mo
103、bility consulting,data science and product management teams on a regional basis to serve in sales andbusiness development functions.Our traffic engineering and mobility consulting service contracts generally involve long leadtimes and require extensive specification development,evaluation and price
104、negotiations.We sell our Vantage and BlueTOAD product families along with their related software bundles through both direct and indirectsales channels.Where we sell direct,we use a combination of our own sales personnel and outside sales organizations to sell,oversee installations,and support our p
105、roducts.Our indirect sales channel comprises a network of independent distributors in theU.S.and select international locations,which sell integrated systems and related products to the traffic management market.Ourindependent distributors are trained in and primarily responsible for the sales,insta
106、llation,set-up and support of our products.Theymaintain an inventory of demonstration traffic products from various manufacturers,who sell directly to government agencies andinstallation contractors.These distributors often have long-term arrangements with local government agencies in their respecti
107、veterritories for the supply of various products for the construction and renovation of traffic intersections,as they are generally well-known suppliers of various high-quality ITS products to the traffic management market.We periodically hold technical trainingclasses for our distributors and end-u
108、sers,and we maintain a full-time staff of customer support technicians throughout the U.S.toprovide technical assistance when needed.When appropriate,we modify or make changes to our distributor network toaccommodate the needs of the market and our customer base.We sell traffic and mobility data and
109、 software through a direct sales model to commercial enterprises,such as mediacompanies involved in providing real-time traffic data and traffic incident data to insurance companies,automotive OEMs and thetraveling public.We have historically had a diverse customer base.For the fiscal year ended Mar
110、ch 31,2024(“Fiscal 2024”)and Fiscal 2023,no individual customer represented greater than 10%of our total revenues.As of March 31,2024 and 2023,no individual customeraccounted for more than 10%of our total trade accounts receivable.82025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/35
111、0868/000035086824000016/iti-20240331.htm12/91Table of ContentsManufacturing and MaterialsWe use contract manufacturers to build subassemblies that are used in our products.Additionally,we procure certaincomponents for our products from qualified suppliers,both in the U.S.and internationally,and gene
112、rally use multi-sourcingstrategies when technically and economically feasible to mitigate supply risk.Historically,Veris Manufacturing has served as ouronly contract manufacturing services(CMS)partner;however,in fiscal 2024,we entered into a contract with a second CMSpartner,Creation Technologies.We
113、 believe the addition of a second CMS partner will help to mitigate potential businessdiscontinuity should either CMS partner be unable to meet its commitments to Iteris.We also believe the addition of a second CMSpartner will improve our ability to negotiate possible pricing concessions.Production
114、volumes for our CMS partners typically isbased upon bi-annual forecasts that we generally adjust on a monthly basis to control inventory levels.Our CMS partners delivermanufactured subassemblies and components to our Santa Ana,California facility,which includes approximately 12,000 squarefeet of spa
115、ce,where they go through final assembly and testing prior to shipment to our customers.Our production facilitymaintains a Quality Management System that is currently certified as conforming to all requirements of the InternationalOrganization for Standardization(“ISO”)9001:2015 international standar
116、d.Additionally,we also purchase and resell certain third-party products at times in order to better service customer needs.These third-party products may be stored and shipped from ourSanta Ana facility or one of our regional distribution centers,depending on the type of third-party product and the
117、ultimatecustomer destination.Customer Support and ServicesWe provide warranty service and support for our products,as well as follow-up service and support for which we chargeseparately.Such service revenues were not a material portion of our total revenues for Fiscal 2024 and Fiscal 2023.We believe
118、customer support is a key competitive factor for our Company.BacklogOur total backlog of unfulfilled firm orders was approximately$123.8 million at March 31,2024.We typically expect torecognize revenues in the range of approximately two-thirds to three-quarters of our backlog as of the end of a fisc
119、al year in thesubsequent fiscal year.At March 31,2023,we had backlog of approximately$114.2 million.The 8.4%increase in backlog in thecurrent fiscal year was generally attributable to overall strong demand for our products and services,as well as the timing of thereceipt of some large contracts.Back
120、log is an operational measure representing future unearned revenues believed to be firm and earned under existingagreements,but it does not represent the total contract award if a firm purchase order or task order has not yet been issued underthe contract.Backlog is not included in deferred revenues
121、 on our balance sheets.Backlog does not include contract awards forwhich definitive contracts have not been executed.We believe backlog is a useful metric for investors,given its relevance to totalorders.The timing and realization of our backlog is subject to the inherent uncertainties of doing busi
122、ness with federal,state and localgovernments,particularly given budgetary constraints,cut-backs and other delays or reallocations of funding that these entitiestypically face.In addition,pursuant to the customary terms of our agreements with government contractors and other customers,our customers c
123、an generally cancel or reschedule orders with little or no penalties.Lead times for the release of purchase ordersoften can be affected by a variety of factors including the scheduling and forecasting practices of our individual customers,as wellas availability of installation labor and ancillary pa
124、rts related to installation which we do not manufacture or supply.These factorscan affect the timing of the conversion of our backlog into revenues.For these reasons,among others,our backlog at a particulardate might not be indicative of the timing of our future revenues.Product DevelopmentOur produ
125、ct development activities are mostly conducted at our facilities in Santa Ana,California,and Madison,Wisconsin,aswell as using additional employee and partner resources across North America.Our research and development costs and expenseswere approximately$10.0 million for Fiscal 2024 and$8.3 million
126、 for Fiscal 2023.We expect to continue to pursue variousproduct development programs and incur research and development expenditures in future periods.We believe our engineering and product development capabilities are a competitive strength.We strive to continuouslydevelop new products,technologies
127、,features and functionalities to meet the needs of our ever-changing markets,as well as toenhance,improve upon,and refine our existing product lines.We plan to continue to invest in the development of furtherenhancement and functionality of our ClearMobility Platform.92025/5/19 10:22iti-20240331http
128、s:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm13/91Table of ContentsCompetitionGenerally,we face significant competition in each of our target markets.Increased competition may result in price reductions,reduced gross margins and loss of market share,any of which could
129、 have a material adverse effect on our business,financialcondition and results of operations.The markets in which we operate are highly fragmented and subject to evolving national and regional quality,operations andsafety standards.Our competitors vary in number,scope and breadth of the products and
130、 services they offer.Our competitorsproviding managed services and consulting include a mix of local,regional and international engineering services firms.Ourcompetitors in software products(e.g.,performance measurement and management,advanced traveler information systems,assetmanagement software,an
131、d our commercial vehicle operations and vehicle safety compliance platforms)include universityaffiliated software organizations,venture backed software companies,and other multi-disciplinary hardware and softwarecorporations.In the market for our detection products,we compete with manufacturers and
132、distributors of other above-ground video cameraand radar detection systems and manufacturers and distributors of other non-intrusive detection devices(e.g.,microwave,infrared,radar,ultrasonic and magnetic detectors),as well as manufacturers and installers of in-pavement inductive loop products,which
133、have historically been,and currently continue to be,the predominant vehicle detection system in this market.Additionally,productssuch as BlueTOAD and VantagePegasus compete against various competitors in the travel-time and data communications markets,respectively.In general,the markets for the prod
134、ucts and services we offer are highly competitive and are characterized by rapidly changingtechnology and evolving standards.Many of our current and prospective competitors have longer operating histories,greater namerecognition,access to larger customer bases,and significantly greater financial,tec
135、hnical,manufacturing,distribution andmarketing resources than we do.As a result,they may be able to adapt more quickly to new or emerging standards or technologies,or to devote greater resources to the promotion and sale of their products.It is also possible that new competitors or alliancesamong co
136、mpetitors could emerge and rapidly acquire significant market share.We believe that our ability to compete effectively inour target markets will depend on a number of factors,including the success and timing of our new product development,thecompatibility of our products with a broad range of comput
137、ing systems,product quality and performance,reliability,functionality,price and service,and technical support.Our failure to provide services and develop and market products that compete successfullywith those of other suppliers and consultants in our target markets could have a material adverse eff
138、ect on our business,financialcondition and results of operations.Intellectual Property and Proprietary RightsOur ability to compete effectively depends in part on our ability to develop and maintain the proprietary aspects of ourtechnology.Our policy is to obtain appropriate proprietary rights of pr
139、otection for any potentially significant new technology weacquire or develop.We currently have 34 issued U.S.patents,including:(i)17 relating to our advanced sensor technologies,(ii)10relating to our engineering and consulting services technologies and(iii)7 related to our traffic and mobility softw
140、are.We have 2pending patent applications in the U.S.We currently have 9 issued foreign patents and 1 foreign patent application related to ourtraffic and mobility software.The expiration dates of our patents range from 2026 to 2042.We intend to pursue additional patentprotection to the extent we bel
141、ieve it would be beneficial and cost-effective.In addition to patent laws,we rely on copyright and trade secret laws to protect our proprietary rights.We attempt to protectour trade secrets and other proprietary information through agreements with customers and suppliers,proprietary informationagree
142、ments with our employees and consultants,and other similar measures.We do not have any material licenses or trademarksother than those relating to product names.We cannot be certain that we will be successful in protecting our proprietary rights.While we believe our patents,patent applications,softw
143、are and other proprietary know-how have value,rapidly evolvingtechnology makes our future success dependent largely upon our ability to successfully achieve continuing innovation.102025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm14/91Table
144、of ContentsAs a provider of traffic engineering services,hardware products,software and other various solutions for the traffic industry,the Company is,and may in the future from time to time,be involved in litigation in the normal course of business related to ourintellectual property rights and th
145、e intellectual property rights of others.While the Company cannot accurately predict the outcomeof any such litigation,the Company is not a party to any litigation or other legal proceedings related to its intellectual property orthe intellectual property of others,the outcome of which,in management
146、s opinion,individually or in the aggregate,would have amaterial effect on the Companys results of operations,financial position or cash flows.An adverse outcome in such litigation orsimilar proceedings could subject us to significant liabilities to third parties,require disputed rights to be license
147、d from others orrequire us to cease marketing or using certain products,any of which could have a material adverse effect on our business,financialcondition and results of operations.In addition,the cost of addressing any intellectual property litigation claim,both in legal feesand expenses,as well
148、as from the diversion of managements resources,could be significant and could have a material adverseeffect on our business,financial condition and results of operations,regardless of a claims validity.EmployeesAs of March 31,2024,we employed 454 full-time employees and 18 part-time employees,for a
149、total of 472 employees.Noneof our employees are represented by a labor union,and we have never experienced a work stoppage.We believe our relations withour employees are good.Government RegulationOur manufacturing operations are subject to various federal,state and local laws and regulations,includi
150、ng those restrictingthe discharge of materials into the environment.We are not involved in any pending or,to our knowledge,threatened governmentalinvestigations or proceedings,which would require curtailment of our operations because of such laws and regulations.Wecontinue to spend funds in connecti
151、on with our compliance with applicable environmental regulations.These expenditures have notbeen significant in the past,and we do not expect any significant expenditure in the near future.Currently,compliance with foreignlaws has not had a material impact on our business;however,as we expand intern
152、ationally,foreign laws and regulations could havea material impact on our business in the future.ITEM 1A.RISK FACTORSOur business is subject to a number of risks,some of which are discussed below.Other risks are presented elsewhere in thisreport and in the information incorporated by reference into
153、this report.You should consider the following risks carefully inaddition to the other information contained in this report and our other filings with the SEC,including our subsequent quarterlyreports on Form 10-Q and current reports on Form 8-K,before deciding to buy,sell or hold our common stock.Th
154、e risks anduncertainties described below are not the only ones facing our company.Additional risks and uncertainties not presently known tous or that we currently deem immaterial may also affect our business operations.If any of these risks actually occurs,our business,financial condition,or results
155、 of operations could be seriously harmed.In that event,the market price for our common stock coulddecline and you may lose all or part of your investment.Risk Related to Our BusinessBecause we depend on government contracts and subcontracts,we face additional risks related to contracting with federa
156、l,state and local governments,including budgetary issues and fixed price contracts,that could adversely impact our futurerevenues and profitability.A significant portion of our revenues comes from contracts with governmental agencies,either as a general contractor,subcontractor or supplier.We antici
157、pate that revenues from government contracts will remain a significant portion of our revenues.Government business is,in general,subject to special risks and challenges,including:delays in funding and uncertainty regarding the allocation of funds to state and local agencies from the U.S.federalgover
158、nment,and delays or reductions in other state and local funding dedicated for transportation and ITS projects;other government personnel or budgetary constraints,including local governments not having sufficient personnel topursue projects;reaching the current federal debt ceiling;and/or cut-backs,d
159、elays or reallocation of governmentfunding,including without limitation,changes in the administration and repeal of government purchasing programs;112025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm15/91Table of Contentsaudits,litigation or
160、investigations that delay or otherwise negatively impact the funding for certain governmentprojects;long purchase cycles or approval processes;competitive bidding and qualification requirements,as well as our ability to replace large contracts once they havebeen completed;changes in government polic
161、ies and political agendas;maintenance of relationships with key government entities from whom a substantial portion of our revenues isderived;milestone deliverable requirements and liquidated damage and/or contract termination provisions for failure to meetcontract milestone requirements;performance
162、 bond requirements;potential government shutdowns and related uncertainty with respect to the federal budget and debt ceiling;adverse weather conditions or other natural or health disasters or developments,such as COVID-19,and evacuationsand flooding due to hurricanes,or severe storms,can result in
163、our inability to perform work in affected areas;andinternational relations and international conflicts such as the war in Ukraine and the war in the Middle East,or othermilitary operations that could cause the temporary or permanent diversion of government funding from transportationor other infrast
164、ructure projects.Governmental budgets and plans are subject to change without warning.Certain risks of selling to governmental entitiesinclude dependence on appropriations and administrative allocation of funds,changes in governmental procurement legislation andregulations and other policies that ma
165、y reflect political developments or agendas,significant changes in contract scheduling,intense competition for government business and termination of purchase decisions for the convenience of the governmental entity.Substantial delays in purchase decisions by governmental entities and rescheduling o
166、r cancellation in purchase decisions bygovernmental entities,and the current constraints on government budgets at the federal,state and local level,and the ongoinguncertainty as to the timing and accessibility to government funding could cause our revenues and income to drop substantially orto fluct
167、uate significantly between fiscal periods.In addition,a number of our government contracts are fixed price contracts.As a result,we might not be able to recover anycost overruns we may incur.These fixed price contracts require us to estimate the total project cost based on preliminaryprojections of
168、the projects requirements.The financial viability of any given project depends in large part on our ability to estimatethese costs accurately and complete the project on a timely basis.In the event our costs for these projects exceed the fixedcontractual amount,we will be required to bear the excess
169、 costs.Such additional costs could adversely affect our financialcondition and results of operations.Moreover,certain of our government contracts are subject to termination or renegotiation at theconvenience of the government,which could result in a large decline in our revenues in any given period.
170、Our inability to addressany of the foregoing concerns or the loss or renegotiation of any material government contract could seriously harm our business,financial condition and results of operations.Our profitability could be adversely affected if we are not able to maintain adequate utilization of
171、our engineering andconsulting workforce.The cost of providing our engineering and mobility consulting services,including the extent to which we utilize our workforce,affects our profitability.The rate at which we utilize our workforce is affected by a number of factors,including:our ability to trans
172、ition employees from completed projects to new assignments and to hire and assimilate newemployees;our ability to forecast demand for our services and thereby maintain an appropriate headcount in our various regionsand related professional disciplines;the timing of new contract awards,the commenceme
173、nt of work under an awarded contract or the completion of largecontracts;122025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm16/912025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm17/9
174、1Table of Contentsthe availability of project funding or other project budget issues;our need to devote time and resources to training,business development,professional development and other non-chargeable activities;andour ability to match the skill sets of our employees to the needs of the marketp
175、lace.An inability to properly and fully utilize our engineering and consulting workforce would reduce our profitability and couldhave an adverse effect on our results of operations.Our management information systems and databases have been and could in the future be disrupted by data protectionbreac
176、hes,system security failures,cyber threats or by the failure of,or lack of access to,our internal operations,such as ourenterprise resource planning(“ERP”)system,or services provided to our customers.These disruptions could negatively impactour sales,increase our expenses,significantly harm our repu
177、tation and/or adversely affect our stock price.Experienced users and computer programmers may be able to penetrate,or“hack”,our network security and create systemdisruptions,cause shutdowns and compromise or misappropriate our confidential information or that of our employees and thirdparties.Comput
178、er programmers and hackers also may be able to develop and deploy viruses,worms,and other malicious softwareprograms that attack our internal network,any of our systems,service offerings or otherwise exploit any security vulnerabilities ofour network,systems or service offerings.In addition,sophisti
179、cated services,hardware and operating system software andapplications that we procure from third parties may contain defects in design or manufacture,including“bugs”and other problemsthat could unexpectedly interfere with the operation of a system.We could incur expenses addressing problems created
180、by cyber orother security problems,bugs,viruses,worms,malicious software programs and security vulnerabilities,and our efforts to addressthese problems might not be successful.We must,and do,take precautions to secure customer information and preventunauthorized access to our databases and systems c
181、ontaining confidential information.Any data security event,such as a breach,data loss or information security lapses,whether resulting in the compromise of personal information or the improper use ordisclosure of confidential,sensitive or classified information,could result in interruptions,cessatio
182、n of service(s),claims,remediation costs,regulatory sanctions against us,loss of current and future contracts,adverse effects to results of operations andfinancial condition,serious harm to our reputation and/or adverse effects to our stock price.We operate our ERP system and otherkey business syste
183、ms on SaaS platforms,and we use these systems for reporting,planning,sales,audit,inventory control,lossprevention,purchase order management and business intelligence.Accordingly,we depend on these systems,and the third-partyproviders of these services,for a number of aspects of our operations.If the
184、se service providers or these systems fail,or if we areunable to continue to have access to these systems on commercially reasonable terms,or at all,operations could be severelydisrupted until an equivalent system(s)could be identified,licensed or developed,and integrated into our operations.Thisdis
185、ruption could have a material adverse effect on our business and due to the evolving nature of these cyber and other securitythreats,the potential impact of any future incident cannot be predicted.We carry insurance,including cyber insurance,commensurate with our size and the nature of our operation
186、s,although there is no certainty that such insurance will in all cases besufficient to adequately cover us for all costs and losses incurred in connection with the occurrence of any of these system securityrisks,data protection breaches,cyber-attacks or other events.If unauthorized access is obtaine
187、d to our customers personal and/or proprietary data in connection with our web-basedand mobile application solutions and services,we may suffer various negative impacts,including a loss of customer and marketconfidence,loss of customer loyalty,and significant liability to our customers and to indivi
188、duals or businesses whoseinformation was being stored.Protecting our customers data is critical to our business,and if there is unauthorized access,we may incur significant costs orliabilities.In addition,we are required to comply with government contracting requirements and make investments in our
189、systemsto protect that data.If we are unable to do so,our customers may lose confidence in us,which would harm our sales,and we mayincur significant expenses or liabilities.Acquisitions,investments and divestitures could result in operating difficulties,dilution,and other consequences that mayadvers
190、ely affect our business and results of operations.Acquisitions,investments and divestitures are important elements of our overall corporate strategy and use of capital,andthese transactions could be material to our financial conditions and results of operations.We expect to continue to evaluate ande
191、nter into discussions regarding potential strategic transactions,including acquiring complementary businesses,products,services,and technologies.Acquisitions may require significant capital infusions which could include debt,equity,or convertible securities.In general,strategic transactions also inv
192、olve a number of special risks,including:132025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm18/91Table of Contentsthe strategic benefits and opportunities from any planned or completed acquisition or divestiture by the Companymight not be re
193、alized or may take longer to realize than expected;strategic benefits and opportunities related to past and ongoing restructuring actions might not be realized or may takelonger to realize than expected;our ability to realize the expected financial benefits of an acquisition,divestiture or other str
194、ategic transaction mightnot be realized or may take longer to realize than expected;cost reductions might not occur as expected;management time and focus may be diverted from operating our business due to challenges related to acquisitions andother strategic transactions;the failure to retain or int
195、egrate key acquired personnel;the challenge of assimilating diverse business cultures,and the difficulties in integrating the operations,technologiesand information system of the acquired companies;increased costs to improve managerial,operational,financial and administrative systems and to eliminat
196、e duplicativeservices;failure to successfully further develop the acquired business or technology;the incurrence of unforeseen obligations or liabilities;potential impairment of relationships with employees or customers as a result of changes in management;increased interest expense or increased sha
197、re or equity dilution;andamortization of acquired intangible assets,as well as unanticipated accounting charges.Our competitors are also soliciting potential acquisition candidates,which could both increase the price of any acquisitiontargets and decrease the number of attractive companies available
198、 for acquisition.Acquisitions may also materially and adverselyaffect our operating results due to large write-offs,contingent liabilities,substantial depreciation,deferred compensation charges orintangible asset amortization,or other adverse tax or accounting consequences.We cannot ensure that we w
199、ill be able to identify orconsummate any additional acquisitions or other strategic transactions,successfully integrate any acquisitions or realize thebenefits and opportunities anticipated from any acquisition or other strategic transaction.Our failure to address the risks and otherissues in connec
200、tion with our past or future acquisitions and other strategic transactions could cause us to not realize theiranticipated benefits and opportunities,incur unanticipated liabilities,experience increased costs,and harm our business generally.We participate in the software development market,which may
201、be subject to various technical and commercial challenges.We invest in software development and have in the past and may in the future experience development and technicalchallenges.Our business and results of operations could also be seriously harmed by any significant delays in our softwaredevelop
202、ment activities.Despite testing and quality control,we cannot be certain that errors will not exist in our software after itsrelease.Any faults or errors in our existing products or in any new products may delay product introductions and shipments,require design modifications,or harm customer relati
203、onships or our reputation,any of which could adversely affect our businessand competitive position.In addition,software companies are subject to litigation concerning intellectual property disputes,whichcould be costly and distract our management.No losses on contracts were recorded during Fiscal 20
204、24 based on our assessment.The estimates and assumptions used in these assessments were based upon managements judgment and may be subject to changeas new events occur and additional information is obtained.If the future estimated costs to fulfill a contract exceed the expectedconsideration from the
205、 customer,the Companys financial condition,cash flows,and results of operations may be adversely andmaterially impacted.142025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm19/91Table of ContentsIf we do not keep pace with rapid technological
206、changes and evolving industry standards,we will not be able to remaincompetitive,and the demand for our products will likely decline.In general,our markets are characterized by the following factors:rapid technological advances;downward price pressures in our target markets as technologies mature;ch
207、anges in customer requirements;additional qualification requirements related to new products or components;frequent new product introductions and enhancements;obsolescence of certain parts and components from time to time that may require re-engineering of certain portions ofour product or products;
208、inventory issues related to transition to new or enhanced models;andevolving industry standards and changes in the regulatory environment.Our future success will depend upon our ability to anticipate and adapt to changes in technology and industry standards,and toeffectively develop,introduce,market
209、 and gain broad acceptance of new products and product enhancements incorporating thelatest technological advancements.If we are unable to develop and introduce new products and product enhancements in a cost-effective and timely manner,or are unable to achieve market acceptance of our new products,
210、our operating results could be adversely affected.We believe our revenues growth and future operating results will depend on our ability to complete development of newproducts and product enhancements,introduce these products and product enhancements in a timely,cost-effective manner,achievebroad ma
211、rket acceptance of these products and product enhancements,and reduce our production costs.During the past few fiscalyears we have introduced,and we expect we will continue to introduce,both new and enhanced products.We cannot guarantee thesuccess of these products,and we might not be able to introd
212、uce any new products or any enhancements to our existing products ona timely basis,or at all.In addition,the introduction of any new products could adversely affect the sales of certain of our existingproducts.We believe that we must continue to make substantial investments to support ongoing resear
213、ch and development in order todevelop new or enhanced products and software to remain competitive.We need to continue to prepare updates for existingproducts and develop and introduce new products that incorporate the latest technological advancements in outdoor imageprocessing hardware,camera techn
214、ologies,software and analysis in response to evolving customer requirements.In addition,weare continuing to migrate some of our products to a new platform.We cannot assure you that we will be able to adequately manageproduct transitions.Our business and results of operations could be adversely affec
215、ted if we do not anticipate or respond adequatelyto technological developments or changing customer requirements or if we cannot adequately manage inventory requirementstypically related to new product transitions and introductions.We cannot ensure that any such investments in research anddevelopmen
216、t will lead to any corresponding increase in revenues.We may need to raise additional capital in the future,which might not be available on terms acceptable to us,or at all.We have historically experienced volatility in our earnings and cash flows from operations from year to year.We may need orchoo
217、se to raise additional capital to fund our operations,to repay indebtedness,pursue acquisitions or expand our operations.Suchadditional capital may be raised through bank borrowings,other debt or equity financings,or some combination of capital sources.We cannot assure you that any additional capita
218、l will be available on a timely basis,on acceptable terms,or at all,and suchadditional financing may result in further dilution to our stockholders.Our capital requirements will depend on many factors,including,but not limited to:market acceptance of our products and product enhancements,and the ove
219、rall level of sales of our products;our ability to control costs and achieve profitability;152025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm20/912025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/it
220、i-20240331.htm21/91Table of Contentsthe supply of key components for our products;our ability to increase revenues and net income;increased research and development expenses and sales and marketing expenses;our need to respond to technological advancements and our competitors introductions of new pr
221、oducts ortechnologies;capital improvements to new and existing facilities and enhancements to our infrastructure and systems;any acquisitions of businesses,technologies,product lines,or possible strategic transactions or dispositions;our relationships with customers and suppliers;government budgets,
222、political agendas and other funding issues,including potential delays in government contractawards or commencement of work for a project;our ability to successfully secure credit arrangements with banks or other lenders and/or negotiate equityarrangements subject to the state of the financial market
223、s in general;andgeneral economic conditions,including the effects of economic slowdowns and international conflicts.If our capital requirements are materially different from those currently planned,we may need additional capital sooner thananticipated.If additional funds are raised through the issua
224、nce of equity or convertible debt securities,the beneficial ownership ofour stockholders will be reduced and such securities may have rights,preferences and privileges senior to our common stock.Additional equity or debt financing might not be available on favorable terms,on a timely basis,or at all
225、.If adequate funds are notavailable or are not available on acceptable terms when needed,we may be unable to continue our operations as planned,developor enhance our products,expand our sales and marketing programs,take advantage of future opportunities or respond tocompetitive pressures.The markets
226、 in which we operate are highly competitive with many companies more established than we are.Our competitors tend to vary across the various product categories in which we participate.The engineering and consulting market is highly fragmented and is subject to evolving national and regional quality
227、and safetystandards.Our competitors vary in size,number,scope and breadth of the products and services they offer,and include large multi-national engineering firms and smaller local or regional firms.Our sensors line of business competes with existing,well-established companies and technologies,bot
228、h domestically andabroad.Only a portion of the traffic intersection market has adopted advanced above-ground detection technologies,and our futuresuccess will depend in part upon gaining broader market acceptance for such technologies.Certain technological barriers to entrymake it difficult for new
229、competitors to enter the market with competing video or other technologies;however,we are aware ofnew market entrants from time to time.Increased competition could result in loss of market share,price reductions and reducedgross margins,any of which could seriously harm our business,financial condit
230、ion and results of operations.Many of our competitors have greater name recognition and greater financial,technological,marketing and customer serviceresources than we do.This may allow our competitors to respond more quickly to new or emerging technologies and changes incustomer requirements.It may
231、 also allow them to devote greater resources to the development,promotion,sale and support of theirproducts and services than we can.Consolidations of end users,distributors and manufacturers in our target markets exacerbate thisproblem.As a result of the foregoing factors,we might not be able to co
232、mpete effectively in our target markets and competitivepressures could adversely affect our business,financial condition and results of operations.162025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm22/91Table of ContentsOur failure to succes
233、sfully secure new contracts and renew existing contracts could reduce our revenues and profitability.Our business depends on our ability to successfully bid on new contracts and renew existing contracts with private and publicsector customers.We continually bid on new contracts and negotiate contrac
234、t renewals on expiring contracts.Contract proposalsand negotiations are complex and frequently involve a lengthy bidding and selection process,which are affected by a number offactors,such as market conditions,financing arrangements and required governmental approvals.As a condition to contract awar
235、d,customers typically require us to provide a surety bond or letter of credit to protect the client should we fail to perform under theterms of the contract.Government entities are also taking more time between contract award and approval to commence workunder the contract,which delays our ability t
236、o recognize revenues under the contract.If negative market conditions materialize,orif we fail to secure adequate financing arrangements or the required governmental approval or fail to meet other requiredconditions,we might not be able to pursue,obtain or perform particular projects,which could red
237、uce or eliminate our profitability.We may be unable to attract and retain key personnel,including senior management,which could seriously harm ourbusiness.Due to the specialized nature of our business and the current tight labor market,we are highly dependent on the continuedservice of our executive
238、 officers and other key management,engineering and technical personnel.We believe that our success willdepend on the continued employment of a highly qualified and experienced senior management team to retain existing businessand generate new business.The loss of any of our officers,or any of our ot
239、her executives or key members of management couldadversely affect our business,financial condition,or results of operations(e.g.,loss of customers or loss of new businessopportunities).Our success will also depend in large part upon our ability to continue to attract,retain and motivate qualified an
240、dproductive engineering and other highly skilled technical personnel.Particularly in highly specialized areas,it has become moredifficult to retain employees and meet all of our employee needs in a timely manner,which may adversely affect our growth in thecurrent fiscal year and in future years.This
241、 situation is exacerbated by pressure from agency customers to contain our costs,whilesalaries for employees are on the rise.Although we intend to continue to devote significant resources to recruit,train and retainqualified skilled personnel,we might not be able to attract and retain such employees
242、,which could impair our ability to performour contractual obligations,meet our customers needs,win new business,and adversely affect our future results.Likewise,thefuture success of our consulting services will depend on our ability to hire additional qualified engineers,planners and technicalperson
243、nel.Competition for qualified employees,particularly development engineers and software developers,is intense and hasbecome more so over time.We might not be able to continue to attract and retain sufficient numbers of such highly skilledemployees.Our inability to attract and retain additional key e
244、mployees or the loss of one or more of our current key employeescould adversely affect our business,financial condition and results of operations.Industry consolidation may lead to increased competition and may harm our operating results.There is a continuing trend toward industry consolidation in o
245、ur markets.We expect this trend to continue as companiesattempt to strengthen or hold their market positions in an evolving industry and as companies are acquired or are unable to continueoperations.For example,some of our current and potential competitors for transportation infrastructure solutions
246、 have madeacquisitions,or announced new strategic alliances,designed to position them with the ability to provide end-to-end technologysolutions for the transportation industry.Companies that are strategic alliance partners in some areas of our business may acquire orform alliances with our competit
247、ors,thereby reducing their business with us.We believe that industry consolidation may result instronger competitors that are better able to compete as sole-source vendors for public transportation agencies,municipalities,andcommercial entities.This could lead to more variability in our operating re
248、sults and could have a material adverse effect on ourbusiness,operating results,and financial condition.172025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm23/91Table of ContentsInternational conflicts could adversely affect our business,fina
249、ncial condition and results of operations.Sustained conflict and disruption in Ukraine and the Middle East is likely and although the lengths,impacts and outcomes ofthe ongoing wars in Ukraine and the Middle East are highly unpredictable,these conflicts could lead to significant market andother disr
250、uptions,including significant volatility in commodity prices and supply of energy resources,instability in financialmarkets,supply chain interruptions,political and social instability,changes in government agency budgets and funding preferencesas well as increase in cyberattacks and cyber and corpor
251、ate espionage.To date we have not experienced any material interruptionsin our infrastructure,supplies,technology systems or networks needed to support our operations.We are actively monitoring thesituations in Ukraine and the Middle East and assessing the potential impacts on our business.The exten
252、t and duration of the warsand resulting market disruptions could be significant and could potentially have substantial impact on the global economy and ourbusiness for an unknown period of time.Any such disruptions may also magnify the impact of other risks described in this AnnualReport on Form 10-
253、K.Increased frequency of severe and extreme weather events associated with climate change could adversely impact ourfacilities,interfere with intersection construction projects,and have a material impact on our financial condition,cash flowsand results of operationsWe take climate change and its ass
254、ociated risks seriously.More extreme and volatile temperatures,increased storm intensityand flooding,and more volatile precipitation are among the climate-related events that are most likely to impact our business.Weare unable to predict the timing or magnitude of these events.However,we perform ong
255、oing assessments of physical risk,including physical climate risk,to our business and efforts to mitigate these physical risks continue to be implemented on anongoing basis.Increased frequency of severe and extreme weather events associated with climate change could adversely impactour and our clien
256、ts businesses and facilities,interfere with intersection construction projects,cause work stoppages and projectdelays or cancellations,and have a material impact on our financial condition,cash flows and results of operations.The availability and regulation of data we purchase and use in certain of
257、our Mobility Data Sets may become morerestrictive,and adversely affect performance of our products or the cost of data purchased.The announcement by Wejo Group Limited to appoint an administrator due to insolvency,and the change in strategy ofOtonomo Technologies Ltd.after being acquired,both reduce
258、d the number of suppliers provisioning data to us for use in some ofour Mobility Data sets.Although similar data can be supplied from other sources,reductions in the number of,or other futurechanges in,key data sources or availability could adversely affect the breadth,quality and value of our Mobil
259、ity Data Sets and/orthe cost to purchase data.In addition,any future increased data privacy regulation,which could be impacted by which politicalparty controls Congress and/or the White House after the 2024 elections,could constrain our Mobility Data business by limitingdata availability and sources
260、 and reduce quality of roadway traffic analysist.Any of these occurrences could have a materialadverse effect on our reputation,profitability or revenue.Our business could be negatively affected as a result of actions of activist stockholders or others.We may be subject to actions or proposals from
261、stockholders or others that might not align with our business strategies or theinterests of our other stockholders.Responding to such actions can be costly and time-consuming,disrupt our business andoperations,and divert the attention of our Board of Directors,management,and employees from the pursu
262、it of our businessstrategies.Such activities could interfere with our ability to execute our strategic plan.Activist stockholders or others may createperceived uncertainties as to the future direction of our business or strategy which may be exploited by our competitors and maymake it more difficult
263、 to attract and retain qualified personnel and potential customers,and may affect our relationships withcurrent customers,vendors,investors,and other third parties.In addition,a proxy contest for the election of directors at our annualmeeting would require us to incur significant legal fees and prox
264、y solicitation expenses and require significant time and attentionby management and our Board of Directors.The perceived uncertainties as to our future direction also could affect the market priceand volatility of our securities.Our stock repurchase program may adversely affect our liquidity and cau
265、se fluctuations in our stock price.On May 12,2022,the Board of Directors approved a plan for the Company to acquire up to$10.0 million of our outstandingcommon stock for an unspecified length of time(the“2022 Stock Repurchase Program”).During the fiscal year ended Fiscal 2024,we repurchased 39,861 s
266、hares for an aggregate price of approximately$0.2 million,at an average price of$4.54 per share.Fromthe inception of the 2022 Stock Repurchase Program through March 31,2024,we repurchased approximately 339,861 shares ofour common stock for an aggregate price of approximately$1.1 million,at an averag
267、e price per share of$3.14.As of March 31,2024,approximately$8.9 million remained available for the repurchase of our common stock under the 2022 Stock RepurchaseProgram.182025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm24/912025/5/19 10:22i
268、ti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm25/91Table of ContentsPotential future stock repurchases under the stock share repurchase program could be funded by operating cash flow or excesscash balances.Repurchases under the stock repurchase program m
269、ay adversely affect our liquidity,which in turn could impact ourprofitability,financial condition and results of operations.In addition,repurchases under the stock repurchase program will reducethe number of shares of our common stock available for purchase and sale in the public market,which could
270、affect the market priceof our common stock.Furthermore,the Inflation Reduction Act of 2022,which was signed into law in August 2022,imposes anon-deductible 1%excise tax on the fair market value of stock repurchases after December 31,2022,that exceed$1.0 million in ataxable year,which may impact the
271、tax efficiency of our stock repurchase program.COVID-19,or other future pandemics,could continue to have an adverse effect on our business.Although COVID-19 has entered an endemic stage,COVID-19(including new variants of COVID-19)or other futurepandemics may adversely affect the global economic cond
272、itions,including possible additional supply chain disruptions,workplacedislocations,economic contraction,and negative pressure on customer budgets and customer sentiment.When COVID-19 wasconsidered a public health emergency,we took actions to preserve our liquidity,manage cash flow and strengthen ou
273、r financialflexibility.Such actions included,but were not limited to,reducing our discretionary spending,reducing capital expenditures,andimplementing restructuring activities.Our products require specialized parts,some of which became more difficult to source during the COVID-19 pandemic.Insome cas
274、es,we had to purchase such parts from third-party brokers at substantially higher prices.The Companys strategies tomitigate global supply chain issues included re-designing certain circuit boards to accommodate computer chips that are morereadily available in the market at more reasonable prices,and
275、 accumulating inventory in the first two quarters of Fiscal 2023.Wealso placed non-cancellable inventory orders for certain products in advance of our normal lead times to secure normal andincremental future supply and capacity.If the Company encounters additional supply chain constraints again in t
276、he future,it mayneed to further adjust its operations to maintain sufficient liquidity.Legal and Regulatory RisksWe might not be able to adequately protect or enforce our intellectual property rights,which could harm our competitiveposition.If we are not able to adequately protect or enforce the pro
277、prietary aspects of our technology,competitors may be able to accessour proprietary technology and our business,financial condition and results of operations may be seriously harmed.We currentlyattempt to protect our technology through a combination of patent,copyright,trademark and trade secret law
278、s,employee and third-party nondisclosure agreements and similar means.Despite our efforts,other parties may attempt to disclose,obtain or illegally useour technologies or systems.Our competitors may also be able to independently develop products that are substantially equivalentor superior to our pr
279、oducts or design around our patents.In addition,the laws of some foreign countries do not protect ourproprietary rights as fully as do the laws of the U.S.As a result,we might not be able to protect our proprietary rights adequately inthe U.S.or internationally.Litigation may be necessary to enforce
280、 our intellectual property rights or to determine the validity and scope of the proprietaryrights of others.Litigation may also be necessary to defend against claims of infringement or invalidity by others.Presently andhistorically,we have been subject to litigation regarding our intellectual proper
281、ty rights and the intellectual property rights ofothers,and we might continue to be in the future.An adverse outcome in litigation or any similar proceedings could subject us tosignificant liabilities to third parties,require us to license disputed rights from others or require us to cease marketing
282、 or usingcertain products,product features,or technologies.In addition,in the event of an adverse outcome in litigation or any similarproceedings we may find ourselves at a competitive disadvantage to others who need not incur the substantial expense,time,andeffort required to market or use certain
283、products,product features,or technologies.We might not be able to obtain any licenses onterms acceptable to us,or at all.We also may have to indemnify certain customers or strategic partners if it is determined that wehave infringed upon or misappropriated another partys intellectual property.Our co
284、ntinued expansion into software developmentactivities might expose us to more litigation.Any of the foregoing could adversely affect our business,financial condition andresults of operations.In addition,the cost of addressing any intellectual property litigation claim,including legal fees and expens
285、es,and the diversion of managements attention and resources,could be significant and could seriously harm our business,financialcondition and results of operations,regardless of whether the claim is valid.192025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/i
286、ti-20240331.htm26/91Table of ContentsWe may continue to be subject to traffic-related litigation.In general,participants in the traffic industry are subject to frequent litigation claims due to the nature of personal injuries thatcan result from traffic accidents.As a provider of traffic engineering
287、 services,products and solutions,we are,and could from timeto time in the future continue to be,subject to litigation for traffic related accidents,even if our products or services did not causethe particular accident.While we generally carry insurance against these types of claims,some claims might
288、 not be covered byinsurance or the damages resulting from such litigation could exceed our insurance coverage limits.In the event that we arerequired to pay significant damages as a result of one or more lawsuits that are not covered by insurance or exceed our coveragelimits,it could materially harm
289、 our business,financial condition or cash flows.Even defending against unsuccessful claims couldcause us to incur significant expenses and result in a diversion of managements attention.We may experience adverse impacts related to Artificial Intelligence(“AI”)laws.While we are working to increase ou
290、r use of AI with initiatives,such as further enhancing our hybrid sensor technologies withintegrated AI algorithms to provide precise and detailed detection,tracking and classification of traffic,there is also increasingregulatory scrutiny in the use of machine learning and AI.AI presents risks and
291、challenges that could affect its adoption,such asuncertainty in the legal regulatory environment relating to AI may require significant resources to modify or change our business orproduct offerings to comply with U.S.and non-U.S.laws,the scale and nature are unknown at this time.For example,on Octo
292、ber30,2023,the Biden administration issued an Executive Order to,among other things,establish extensive new standards for AIsafety and security.Other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of suchtechnologies challenging or prohibited.These
293、obligations may make it harder for us to use AI in our business,and require us tochange our product offerings,or prevent or limit our use of AI.If we cannot use AI,or that use is restricted,our product offeringsmay be less efficient,or we may be less competitive,which could adversely affect our busi
294、ness,reputation,financial conditions,and results of operations.Financial and Market RisksWe might not be able to consistently achieve profitability on a quarterly or annual basis in the future.We had GAAP net income of approximately$3.1 million in Fiscal 2024 and net loss of$14.9 million in Fiscal 2
295、023.Wecannot ensure that we will be able to maintain profitability in the future.Our ability to operate at a profit could be impacted bygovernmental budgetary constraints,government and political agendas,economic instability,supply chain constraints and otheritems that are beyond our control.Further
296、more,we rely on operating profits to fund investments in sales and marketing andresearch and development initiatives.We cannot ensure that our financial performance will sustain a sufficient level to completelysupport those investments.Most of our expenses are fixed in advance.As such,we generally a
297、re unable to reduce our expensessignificantly in the short-term to compensate for any unexpected delay or decrease in anticipated revenues or increases in plannedinvestments.202025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm27/91Table of Co
298、ntentsIf we experience declining or flat revenues and we fail to manage such declines effectively,we may be unable to executeour business plan and may experience future weaknesses in our operating results.Based on our business objectives,and in order to achieve future growth,we will need to continue
299、 to hire additional qualifiedand productive personnel,and invest in additional research and development and sales and marketing activities,which couldincrease our expenses and cause declines in our operating results.In addition,our past expansion has placed,and future expansionis expected to place,a
300、 significant strain on our managerial,administrative,operational,financial and other resources.If we areunable to manage these activities or any revenues declines successfully,our growth,our business,our financial condition and ourresults of operations could be adversely affected.Our use of estimate
301、s in conjunction with the input method of measuring progress to completion of performance obligationsfor our engineering and consulting services revenues could result in a reduction or reversal of previously recorded revenuesand profits.A portion of our engineering and consulting services revenues i
302、s measured and recognized over time using the input method ofmeasuring progress to completion.Our use of this accounting method results in recognition of revenues and profits proportionallyover the life of a contract,based generally on the proportion of costs incurred to date to total costs expected
303、 to be incurred for theentire project.The effects of revisions to estimated costs and resulting revenues recognized are recorded when the amounts areknown or can be reasonably estimated based on updated information.Such revisions could occur in any period and their effectscould be material.Although
304、we have historically made reasonably reliable estimates of the progress towards completion of long-term engineering,program management,construction management or construction contracts,the uncertainties inherent in theestimating process make it possible for actual costs to vary materially from estim
305、ates which may result in reductions or reversals ofpreviously recorded revenues and profits.If our internal controls over financial reporting do not comply with the requirements of the Sarbanes-Oxley Act,ourbusiness and stock price could be adversely affected.Section 404 of the Sarbanes-Oxley Act of
306、 2002 currently requires us to evaluate the effectiveness of our internal controls overfinancial reporting at the end of each fiscal year and to include a management report assessing the effectiveness of our internalcontrols over financial reporting in all annual reports.We are required to obtain ou
307、r auditors attestation pursuant to Section 404(b)of the Sarbanes-Oxley Act.Going forward,we might not be able to complete the work required for such attestation on a timelybasis and,even if we timely complete such requirements,our independent registered public accounting firm may still conclude that
308、our internal controls over financial reporting are not effective.A control system,no matter how well designed and operated,can provide only reasonable,not absolute,assurance that thecontrol systems objectives will be met.Further,the design of a control system must reflect the fact that there are res
309、ourceconstraints,and the benefits of controls must be considered relative to their costs.Because of the inherent limitations in all controlsystems,no evaluation of controls can provide absolute assurance that all control issues and instances of fraud,if any,within Iterishave been or will be detected
310、.These inherent limitations include the realities that technology,decision-making and other processescan be faulty and that breakdowns can occur because of simple errors or mistakes.Controls also can possibly be circumvented byindividuals,by collusion of two or more people,or by management override
311、of the controls.The design of any system of controls isbased in part on certain assumptions about the likelihood of future events,and we cannot ensure that any design will succeed inachieving its stated goals under all potential future conditions.Over time,our controls may become inadequate because
312、of changesin conditions or deterioration in the degree of compliance with policies or procedures.Because of the inherent limitations in a cost-effective control system,misstatements due to error or fraud may occur and go undetected.If we are not able to maintain effectiveinternal controls over finan
313、cial reporting,we may lose the confidence of investors and analysts and our stock price could decline.Our quarterly operating results fluctuate as a result of many factors.Therefore,we may fail to meet or exceed theexpectations of securities analysts and investors,which could cause our stock price t
314、o decline.Our quarterly revenues and operating results have fluctuated and are likely to continue to vary from quarter to quarter due to anumber of factors,many of which are not within our control.Factors that could affect our revenues and operating results include,among others,the following:delays
315、in government contracts and funding from time to time and budgetary constraints at the federal,state and locallevels;our customers or our ability to access stimulus funding,funding from the federal transportation bills or othergovernment funding;212025/5/19 10:22iti-20240331https:/www.sec.gov/Archiv
316、es/edgar/data/350868/000035086824000016/iti-20240331.htm28/912025/5/19 10:22iti-20240331https:/www.sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm29/91Table of Contentsdeclines in new home and commercial real estate construction and related road and other infrastructure constr
317、uction;changes in our pricing policies and the pricing policies of our suppliers and competitors,pricing concessions onvolume sales,as well as increased price competition in general;the long lead times associated with government contracts;the size,timing,rescheduling or cancellation of significant v
318、endor and customer orders;our ability to control costs,including costs associated with strategic alternatives;the mix of our products and services sold in a quarter,which has varied and is expected to continue to vary from timeto time;our ability to develop,introduce,patent,market and gain market ac
319、ceptance of new products,applications andproduct enhancements in a timely manner,or at all;market acceptance of the products incorporating our technologies and products;the introduction of new products by competitors;the availability and cost of components used in the manufacture of our products;our
320、 success in expanding and implementing our sales and marketing programs;the effects of technological changes in our target markets;the amount of our backlog at any given time;timing of backlog fulfillment;the nature of our government contracts;decrease in revenues derived from key or significant cus
321、tomers;deferrals of customer orders in anticipation of new products,applications or product enhancements;interruptions or other significant disruption in our supply chain which may negatively impact our ability to shipproducts and/or the cost of our products;risks and uncertainties associated with o
322、ur international business;market condition changes such as industry consolidations that could threaten our ability to procure new business;general economic and political conditions;our ability to raise additional capital;pandemic and epidemic events,such as COVID-19,which may have a continuing impac
323、t on our future operatingresults;international wars,conflicts,and acts of terrorism;andother factors beyond our control,including but not limited to,natural disasters.Due to the factors listed above,as well as other unforeseen factors,our future operating results could be below the expectationsof se
324、curities analysts or investors,which could cause the trading price of our common stock to decline.As a result of thesequarterly variations,you should not rely on quarter-to-quarter comparisons of our operating results as an indication of our futureperformance.222025/5/19 10:22iti-20240331https:/www.
325、sec.gov/Archives/edgar/data/350868/000035086824000016/iti-20240331.htm30/91Table of ContentsSupply shortages or production gaps could materially and adversely impact our sales and financial results.We have experienced,and may from time to time in the future continue to experience parts shortages,end
326、 of life events,sharpincreases in component costs and unforeseen quality control issues by our suppliers that may impact our ability to meet demand forour products.COVID-19 increased the occurrence of such shortages and increased costs for materials.Although we havetransitioned to using multi-sourci
327、ng strategies when technically and economically feasible to mitigate supply risk,we historicallyused,and in some cases continue to use,single suppliers for certain key components in our products.Additionally,we have had toreengineer products from time to time to address discontinued,obsolete or unav
328、ailable components.Our products are also deployedwith other traffic intersection products that also could experience supply issues for their products,which in turn could result indelays in orders for our products.Should any such supply delay or disruption occur,or should a key supplier discontinueop
329、erations,our future sales and costs may be materially and adversely affected.Additionally,we rely heavily on select contractmanufacturers to produce many of our products and do not have any long-term contracts to guarantee supply of such products.Although we believe our contract manufacturers have s
330、ufficient capacity to meet our production schedules for the foreseeablefuture and we believe we could find alternative contract manufacturing sources for many of our products,if necessary,we couldexperience a production gap should our contract manufacturers become unable to meet our production requi
331、rements and the cost ofour products could increase,adversely affecting our margins.Further,foreign imports of components in our products subject theCompany to risks of changes in,or the imposition of new,export/import requirements,tariffs,work stoppages,delays in shipment,product cost increases due
332、to component shortages,public health issues,such as COVID-19,that could lead to temporary closuresof facilities or shipping ports,and other economic uncertainties affecting trade between the U.S.and other countries where wesource components for our products.Any such actions could increase the cost t
333、o us of such products and cause increases in theprices at which we sell such products,which could adversely affect our financial performance.Similarly,these actions could resultin cost increases or supply chain delays that impact third party products(e.g.,steel poles)which could lead our customers to delayor cancel planned purchases of our products.Our international business operations may be thre
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