Data I/O Corporation and I.A.R. Systems AB (IAR) jointly announced a non-binding Letter of Intent (LOI) for Data I/O to acquire IAR's embedded software security IP and related assets. The proposed transaction includes software, source code, hardware, intellectual property, engineering infrastructure, manufacturing equipment, and certifications. Financial terms and the anticipated timing of the closing were not disclosed.

The acquisition builds on the companies’ February 2026 technology collaboration, which unified security provisioning from embedded design through manufacturing. Data I/O will take full ownership of the core technology underlying that collaboration, including the Embedded Trust and Secure Deploy platforms, the eSecIP toolchain, and the certificate authority and provisioning infrastructure. Following the closing, Data I/O will assume full ownership of customer support for these products.

Full ownership of the IAR embedded software security technology stack will give Data I/O direct control over the security provisioning roadmap, device support, and release cadence. This positions the company to extend its security offering upstream into the design phase while continuing to serve customers through its programming and provisioning platforms. The move aims to strengthen Data I/O's position as government regulations and industry standards, such as the EU Cyber Resilience Act, increasingly mandate robust security measures for connected electronic products.

The EU Cyber Resilience Act (Regulation (EU) 2024/2847) sets mandatory cybersecurity and vulnerability-handling standards for nearly all hardware and software products connected to a network. Full mandatory compliance for all products sold in the EU is required by December 2027. The act introduces lifecycle security requirements, CE marking, security-by-design standards, guaranteed security updates, and strict reporting for Software Bill of Materials (SBOM).

Strategic Assets and Collaboration

The intended transaction encompasses a range of assets critical to the embedded security ecosystem. The table below outlines the key components included in the proposed acquisition.

Despite the asset transfer, the commercial partnership between IAR and Data I/O will continue. The February 2026 collaboration, which integrates IAR's embedded software security solution with Data I/O's PSV programming systems, remains unchanged and will serve as a cornerstone of the joint offering to OEMs worldwide.

Executive Commentary

William Wentworth, President and CEO of Data I/O Corporation, described the acquisition as a natural next step in the company's evolution. He stated that the acquisition of the IP and HSM design allows Data I/O to design security provisioning into its core platform rather than integrating multiple third-party products. Wentworth emphasized that the company's data provisioning platform is a natural extension for secure provisioning, aligning with its Programming-as-a-Service strategy and the regulatory tailwind of the EU Cyber Resilience Act.

Karin Schreil, Senior Vice President of BU IAR at Qt Group, expressed support for the transaction. She noted that IAR acquired the portfolio in 2018 and that many customers depend on the technology. Schreil stated that the transaction secures the future of the technology and ensures continuity for customers with a partner positioned to invest in its growth, while IAR and Qt Group continue to focus on their core offerings.

Data I/O Corporation closed a $9 million investment with two institutional investors to accelerate growth and technological innovation. The financing, announced on June 17, 2026, comprises the issuance of common stock, warrants, and convertible debentures. The company intends to use the net proceeds for additional working capital, general corporate purposes, and future potential strategic acquisitions to support The New Data I/O initiative.

Pursuant to the securities purchase agreement, Data I/O issued 869,840 shares of common stock and warrants to purchase up to 1,080,000 shares of common stock. The warrants have an exercise price of $3.00 per share and will be exercisable for five years following the date of issuance. The transaction also included the issuance of unsecured convertible debentures in the aggregate principal amount of approximately $6.8 million.

The unsecured convertible debentures bear interest at a rate of 4.0% per annum, payable in cash or in Series B preferred stock at the company's discretion. These debentures will mature on the fifth anniversary of their issuance, unless repaid or converted earlier. The principal amount is convertible into Series B preferred stock, which is non-voting and convertible into common stock at an initial conversion price of $2.50 per share.

Key Transaction Details

The following table outlines the components of the $9 million investment:

The convertible debentures will automatically convert into Series B preferred stock upon receipt of approval by the company's stockholders at an upcoming meeting, pursuant to Nasdaq rules. Certain restrictions on the exercise of the warrants will cease following this stockholder approval. Data I/O has agreed to file a registration statement with the Securities and Exchange Commission registering the resale of the shares issued in the transaction, as well as shares issuable upon warrant exercise and conversion of the preferred stock.

Ladenburg Thalmann & Co. served as the exclusive placement agent for the investments, while Benchmark, a StoneX company, acted as financial advisor to Data I/O. The securities were sold in a private placement and have not been registered under the Securities Act of 1933.