What CPI Card Group Inc. told the SEC could break it.

CPI's payment cards depend on microchips and antennas where ~93% of purchases came from three suppliers and ~74% from a single supplier (including most contactless chips) — an acute single-source dependency, with chips sourced from Germany/Thailand/Singapore and ultimately Taiwan.

“For the year ended December 31, 2025, approximately 93% of our purchased microchips and antennas came from these three main suppliers, and approximately 74% came from one supplier, including most of our contactless chips.”

One customer (served ~20 years) was ~16% of CPI's 2025 revenue (18% in 2024), and more than half of revenue came from its top 10 direct customers — heavy concentration that makes customer loss materially adverse.

“The Company had one customer that accounted for approximately 16% of total revenue for the year ended December 31, 2025. We have been serving this customer for nearly 20 years. In addition, more than half of our revenue for the year ended December 31, 2025 were from our top 10 direct customers, which include certai”

CPI carries $285M of 10.000% Senior Notes due 2029 (plus an ABL revolver) with covenants restricting dividends, investments, M&A and asset sales; insufficient cash flow to service debt could materially harm its financial condition.

“we completed a private offering by our wholly-owned subsidiary, CPI CG Inc. (the “Issuer”), of $285.0 million aggregate principal amount of 10.000% Senior Notes due 2029 (the “Senior Notes”) and related guarantees at an issue price of 100%.”

CPI has already been adversely impacted by 2025-26 U.S. tariffs on imported materials and components used in its cards (chips were exempt but other inputs were not), raising production costs and pressuring gross margin.

“While such tariffs did not impact semiconductors used in our products, we have been adversely impacted by tariffs on other imported materials and components used in our products, and we m”