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Item 1. Business

2021-02-19 compared with 2020-02-28 · 369 added, 166 removed, 206 unchanged (72% of the section changed)

Airgain is a leading provider of advanced antenna technologies used to enable high performance wireless networking across a broad and increasing range of devices and markets, including consumer, enterprise, and automotive.

Our innovative antenna systems are designed to address key challenges with wireless system performance faced by our customers.

We provide solutions to complex Radio Frequency, or RF, engineering challenges to help improve wireless services that require higher throughput, broad coverage footprint, and carrier grade quality.

Our antennas are deployed in carrier, fleet, enterprise, residential, private, government, and public safety wireless networks and systems, including set-top boxes, access points, routers, modems, gateways, media adapters, extenders, portables, digital televisions, sensors, fleet and asset tracking devices.

Airgain is a leading provider of advanced wireless connectivity solutions and technologies used to enable high performance wireless networking across a broad range of devices and markets, including consumer, enterprise, and automotive.

Our mission is to connect the world through advanced antenna systems and integrated wireless solutions.

Combining design-led

thinking with testing and development, our technologies are deployed in carrier, fleet, enterprise, residential, private, government, and public safety wireless networks and systems, including set-top

boxes, access points, routers, modems, gateways, media adapters, portables, digital televisions, sensors, fleet, and asset tracking devices.

Through our pedigree in the design, integration, and testing of high performance embedded antenna technology, we have become a leading provider to the residential wireless local area networking, also known as WLAN, market, supplying to leading carriers, original equipment manufacturers, or OEMs, original design manufacturers, or ODMs, and chipset manufacturers who depend on us to achieve their wireless performance goals.

Our embedded and external antenna solutions support a variety of wireless access technologies across the licensed and unlicensed spectrum of frequency bands.

These include IEEE 802.11 a/b/g/n, 802.11ac/ax, WCDMA, LTE, 5G, DECT, LPD, LPWAN, Bluetooth, ZigBee and Z-Wave, among others.

In addition, we have expertise in the testing and benchmarking of wireless systems and devices.

To satisfy the rapidly evolving technology needs of the industry, we have remained on the leading edge of next generation development by providing solutions for Multiple Input, Multiple Output, or MIMO, Multiuser MIMO, or MU-MIMO, short range wireless technologies, beam forming, and active antenna technology.

Our design teams partner with customers from the early stages of antenna prototyping to device throughput testing to facilitate optimal performance and quick time to market.

Our capabilities include design, custom engineering support, integration, and over-the-air, or OTA, testing.

We built the foundation of our business through the evolution of the IEEE 802.11 protocol standards, and our roots are steeped in Wi-Fi

Over the years, we have diversified our wireless connectivity solutions into cellular communications, starting with 3G technology, leading to LTE and more recently, 5G.

As the number of wireless standards has increased, we have adapted to develop the necessary solutions to meet end customer needs.

Our core business historically was primarily sales of embedded antenna solutions for the top North American video service providers, largely in the consumer market.

As technology advanced from 3G and pre-802.11ac protocol, antennas were often overlooked in terms of importance despite being a necessary component.

More recently, the number of antennas per device has increased, the number of frequency bands to be supported per device has increased, device form factors have become smaller, product refresh cycles have shortened, and RF performance requirements have become more stringent.

This evolution has made the antennas the limiting factor in the performance of many of today’s devices.

As we head into Wi-Fi

6 which addresses more dense areas, and 6E which adds additional spectrum for Wi-Fi,

and 5G, both sub-6GHz

and mmWave, we believe the market is moving straight into Airgain’s core competency and creating new opportunities for growth, particularly in our enterprise and automotive markets, where we have been targeting research and development investment in recent years.

We are leveraging our experience in embedded antenna solutions and the evolving technology landscape to transition from a passive antenna and related services provider to a wireless system solutions provider.

Our embedded antenna solutions and related design and test services, which has historically been our core business, is predominant to our consumer market, but also is a significant component of our enterprise market, and to a lesser extent, automotive markets.

In delivering embedded antenna solutions our design teams partner with customers from the early stages of antenna prototyping to device throughput testing to facilitate optimal performance and quick time to market.

Our capabilities include design, custom engineering support, integration, and over-the-air,

or OTA, testing.

These capabilities have resulted in a strong reputation across the OEM, ODM and chipset manufacturer ecosystem.

Our competencies and strengths have helped us secure design wins used in multiple reference designs from leading Wi-Fi chipset vendors.

Our competencies and strengths have helped us secure design wins used in multiple reference designs from leading Wi-Fi

chipset vendors.

OEMs, ODMs, chipset manufacturers and service providers rely on these reference designs and our engineering skills to deliver superior throughput performance.

We view our relationship with OEM, ODM, chipset manufacturers and service providers as an important attribute to our long-term strategy and success.

In 2019 we had over 1,000 antenna products in our portfolio which shipped worldwide and implemented across millions of devices.

We view our relationships with OEM, ODM, chipset and component manufacturers, and service providers and carriers as an important attribute to our long-term strategy and success.

As a wireless connectivity solution provider that has a history in antenna technology, antennas are a part of everything we do, embedded or otherwise.

We have over 1,000 antenna products in our portfolio which shipped worldwide and are implemented across millions of devices.

During 2020 we supplied our products to carriers, retailers, OEMs, ODMs and end users in three primary geographic regions:

North America, Europe, and Asia Pacific.

Our customer base includes Aruba, AT&T (DIRECTV U.S., LLC), Belkin International, Inc., Broadcom, Charter Communications, Inc., Comcast Corporation, Commscope, Inc., Dish Network, Liberty Global plc., Nokia, Telefonica SA, Sagemcom SAS, Samsung, Technicolor SA and ZTE Corporation, among others.

We have achieved significant growth in our business in a short period of time.

From 2012 to 2019, our annual sales have grown from $18.2 million to $55.7 million, while our net income has increased from a net loss of $1.1 million in 2012 to net income of $0.9 million in 2019.

We use third parties to manufacture our embedded antenna products while maintaining oversight for critical quality, test, and calibration functions.

We manufacture our Antenna Plus branded products at our Arizona facility.

Our customer base includes Aruba, Cisco, AT&T (DIRECTV U.S., LLC), Belkin International, Inc., Broadcom, Charter Communications, Inc., Comcast Corporation, Commscope, Inc., Dish Network, Liberty Global plc., Nokia, Telefonica SA, Sagemcom SAS, Samsung, Technicolor SA and ZTE Corporation, among others.

We have achieved significant growth in our business, and from 2012 to 2020 our annual sales have grown from $18.2 million to as high as $60.6 million in 2018.

Our embedded and external antenna solutions support a variety of wireless access technologies across the licensed and unlicensed spectrum of frequency bands.

These include IEEE 802.11 a/b/g/n, 802.11ac and ax (now called Wi-Fi

6), 3G, LTE, 5G, low power wide area (or LPWA), as well as wireless internet of things, or IoT, standards such as Bluetooth, ZigBee and Z-Wave,

among others.

In addition, we have expertise in the testing and benchmarking of passive and active wireless systems and devices including Wi-Fi

6 and 5G cellular.

To satisfy the rapidly evolving technology needs of the industry, we have remained on the leading edge of next generation development by aligning ourselves with the evolution of wireless standards and working with wireless chipset vendors and our OEM partners on proof-of-concept

and reference designs from very early in the new product development cycle, ensuring our solutions are ready in advance or in time for customer product implementations of new technology.

We believe, this flagship platform is a game changer for Airgain today in our public safety and fleet focused automotive markets and will play a key role in our future strategy for 5G solutions internationally for automotive and enterprise markets.

The first product from the AirgainConnect platform is the FirstNet Ready ™

AirgainConnect AC-HPUE antenna-modem, targeting vehicles used by first responders like police, fire and EMS and public safety support vehicles which include bus, rail, courier, utility, waste or water management, and security.

The AirgainConnect AC-HPUE antenna-modem includes an integrated high-power LTE modem supporting the 3GPP Band 14 HPUE (or high power user equipment) output power functionality known as MegaRange ™

This compact vehicle antenna-modem solution tightly couples essential LTE radio components with the antenna system to provide improved connectivity for public safety and fleet vehicles certified to run on the AT&T FirstNet network.

The AirgainConnect AC-HPUE more than doubles the range of existing solutions, a result of its ability to transmit 10 times the power of existing solutions today.

The incremental power improves the ability to communicate reliably in challenging environments including dense urban areas, underground garages and tunnels, and provides a significant advantage for first responders in poor signal coverage areas like rural areas or mountain ranges.

Through technological innovation, the AirgainConnect AC-HPUE antenna-modem combines the modem and antenna elements designed to deal with complexities of integration and heat dissipation, while maintaining a sleek form factor that is suitable for placement on a vehicle, which is a reason why AirgainConnect AC-HPUE is the first antenna-modem product servicing AT&T FirstNet.

The AirgainConnect AC-HPUE antenna-modem initially targets the U.S.

first responder market, which we believe represents a $500 million addressable market based on an estimated 2.7 million first responder and public safety vehicles in the U.S.

The average selling price of the AC-HPUE is in the $1,000 range, which represents a significant increase over the average selling price for our portfolio of antenna products, which were sold in the tens of cents to tens of dollars range.

We have already begun developing products to address other U.S.

carriers, global carriers, and enterprise fleet opportunities leveraging the AirgainConnect platform that will expand the $500 million addressable market significantly with a global total addressable market for the AirgainConnect platform we estimate at $4 billion today, based on ABI data for 2021 global modem shipments for targeted vehicle types and our estimates of average selling prices.

We are very excited about this first product, the potential of the AirgainConnect platform overall, and the related growth potential as we further our transition to a wireless systems solutions provider.

We use third parties to manufacture our embedded antenna solutions while maintaining oversight for critical quality, test, and calibration functions.

We manufacture our Antenna Plus branded products, including the AirgainConnect AC-HPUE antenna-modem at our Arizona facility.

As of December 31, 2020, we had 233 issued patents and 19 pending patent applications in the United States and 21 companion patents and five pending applications outside the United States.

NimbeLink Acquisition

On January 7, 2021 we purchased 100% of the outstanding shares of Minnesota-based NimbeLink Corp.

NimbeLink is an industrial internet of things, or IIoT, company focused on the design, development, and delivery of cellular solutions for enterprise customers.

NimbeLink provides carrier-certified embedded modems and asset tracking solutions that minimize or often eliminate RF design and certification time from project schedules, significantly reducing costs and time to market.

NimbeLink’s patented Skywire ®

modems are certified as an “end-device,” meaning further FCC or carrier certifications by its customers are normally unnecessary for intended products.

Nimbelink offers a full line of solutions from 2G to LTE and 5G, as well as products with integrated GPS/GNSS radios.

All Skywire products are small and pin-compatible enabling easy integration and simplifying the process of changing technologies in the future as they become available.

This time-to-market advantage allows developers to quickly design-in connectivity to cellular networks around the world.

NimbeLink’s asset tracking solution is an enmeshed edge solution that has the latest 5G LTE M technology in it.

The focus of NimbeLink asset tracking solutions is tracking non-powered assets that move around geographically in and out of areas without a local network.

The solution combines low power, battery operated edge devices, with its Nlink ™

Cloud-based device enablement platform, providing an asset tracking solution that can be deployed quickly and in many different applications.

In addition to Skywire and asset tracking, Nimbelink also engages in turnkey design and manufacture of white label IIoT solution services.

NimbeLink’s smart simple cellular solutions allow its customers to get their machines and asset connected to the internet quickly providing a quick time to market, driving data to the enterprise and allowing them to make better business decisions.

Nimbelink’s go to market strategy is business to business with a core set of internal sales resources focused on leveraging a set of distributors and VARs.

NimbeLink focuses on medium to large OEMs.

The acquisition of NimbeLink supports Airgain’s transition toward becoming a more system-level company and will play an important role in our overall growth strategy to broaden market diversification, especially within the IIoT space.

NimbeLink’s expertise in IIoT puts them squarely in one of our targeted submarkets, within the bigger enterprise market, and extends the breadth and opportunity for our AirgainConnect platform.

For NimbeLink, Airgain’s worldwide salesforce represents a present opportunity to expand NimbeLink’s reach and NimbeLink will now gain access to design opportunities they were not previously able to win.

The result is an increase in the opportunities for Airgain in the enterprise market and a more diverse offering of products and expertise for our customers.

Industry Background and Market Opportunity

Global adoption of Wi-Fi has been a major contributor to our growth to date and underpinning the demand has been the growth in internal protocol, or IP, traffic and IP-enabled devices.

According to the Cisco Visual Networking Index, by 2022, Wi-Fi and mobile networks will account for an estimated 71% of IP traffic, up from 52% in 2017.

We believe the greater proportion of traffic being transmitted and received over wireless technologies will be a tailwind for greater adoption of antenna systems.

According to ABI Research, next to cellular handsets, consumer access points are the second biggest consumers of Wi-Fi chipsets.

Residential gateways and Wireless access points make up the majority of consumer access points, the vast majority of which are provided to consumers by carriers, service providers and retailers.

Carriers and enterprises have realized the economic benefits of wireless connectivity to enable efficient delivery of premium content and internet services in the home, enterprise and mobile.

The rapid growth of mobile data traffic has been widely recognized and reported.

The trend toward mobility

carries over into the realm of fixed networks since an increasing portion of traffic will originate from portable or mobile devices.

The wireless market for antenna systems is growing rapidly as the technology is adopted across a wide variety of markets, including the following key markets we target :

The consumer market encompasses a large and growing market of consumers using wireless-enabled devices and our antennas are deployed in consumer access points, wireless gateways, Wi-Fi Mesh systems and extenders, smart TVs, smart home devices, and set-top boxes.

Our antennas support an array of technologies including WLAN, Wi-Fi, LTE, 5G and LPWAN.

These devices facilitate a variety of consumer-oriented applications and services including wireless video streaming, home automation, smart appliances, home security systems, and smart TV entertainment systems.

We estimate that the total addressable market for our antennas in the consumer market will grow at a compound annual growth rate, or CAGR, of 9% between 2017 and 2022, based on ABI research and our internal estimates of average selling price, or ASP.

Furthermore, according to ABI Research, the market for set-top boxes shipped worldwide is expected to increase from 45.4 million device shipments in 2018 to 61.4 million in 2022.

In the same period, the number of smart TV’s shipped are expected to grow from 125.4 million to 233 million.

Global adoption of Wi-Fi

has been a major contributor to our growth history to date.

An increasing amount of people rely on Wi-Fi

as the primary means to connect to the internet.

has become critical and vital to every public venue (retail shopping centers, airports, sports venues, the hospitality space, among others), and has become the key method for in-home

consumer connectivity.

As we transition to a more comprehensive wireless systems solution provider and continue to drive increased growth in the enterprise and automotive markets, mobile network (cellular) connectivity, and 5G in particular, is becoming an increasingly significant portion of our business, underpinned by the growth in cellular connectivity and data consumption demands globally.

While historically Wi-Fi

adoption was the primary contributor to our market potential, as we transition into a wireless systems solution provider we will consider mobile network connected device trends as an equal, if not more important indicator of our company’s market opportunity.

We believe the greater proportion of traffic being transmitted and received over wireless technologies, and the transition to new and more capable wireless technology standards, are direct indicators of future opportunity for our antenna and wireless connectivity solutions and services.

During the COVID-19

pandemic Wi-Fi

connectivity has grown in importance as consumers use it for connecting to videoconferencing, telehealth, and other critical applications and services.

has long been leveraged as one of the main solutions to meet the increasing demand for bandwidth, which enables operators to scale capacity to meet their subscribers’ needs.

With advances and ratifications in Wi-Fi

standards, dense environments with many concurrently connecting devices and IoT connections such as airports, public transportation, retail, healthcare, smart cities, stadiums, among others, result in public WI-FI

use cases across multiple industry segments.

According to the Cisco Annual Internet Report (2018-2023), Wi-Fi

4 and 5 Wi-Fi

(IEEE 802.11ac) standards will represent 66.8% of all WLAN endpoints by 2023 providing a range of speeds that allow users to view medium-resolution video streaming because of the higher throughput.

5, with very high theoretical speeds, is considered a true wired complement or equivalent and can enable higher definition video streaming and services with use cases that require higher data rates.

The latest Wi-Fi

6 (802.11ax) standard further improves the average throughput per user by a theoretical factor of at least four times in dense user environments, which will allow for dense IoT deployments.

By 2023, 27% of all WLAN endpoints will be equipped with Wi-Fi

6 according to the Cisco report.

Furthermore, Cisco predicts 55% of all networked devices will be wired or connected by Wi-Fi

by 2023, while the remaining 45% of networked devices will be mobile network-connected (3G and below, 4G, 5G or Low Power Wide Area (LPWA).

To help meet the increasing demand for Wi-Fi

and other unlicensed services, the Federal Communications Commission, or FCC, has led the way making additional blocks of frequency spectrum such as 5.9GHz and 6-7GHz

spectrum available.

More spectrum and larger channel bandwidth provide the needed capacity to support even more devices, at even faster speeds.

Opening up blocks of 6 GHz bandwidth for Wi-Fi

is likely to support the growth of Wi-Fi

in the next decade.

Mobile network devices are evolving from lower-generation network connectivity (3G) to higher-generation network connectivity (3.5G, 4G or LTE and now also 5G), combining device capabilities with faster, higher bandwidth and more intelligent networks will contribute to increased mobile and Wi-Fi

According to the Cisco Annual Internet Report (2018-2023), over 70% of the global population will have mobile connectivity by 2023.

The total number of global mobile subscribers will grow from 5.1 billion (66% of population) in 2018 to 5.7 billion (71% of population) by 2023.

5G devices and connections will be over 10% of global mobile devices and connections by 2023.

By 2023 global mobile devices will grow from 8.8 billion in 2018 to 13.1 billion by 2023 – 1.4 billion of those will be 5G capable.

The fastest growing mobile device category is M2M followed by smartphones.

The mobile M2M category is projected to grow at a 30% CAGR from 2018 to 2023.

Smartphones will grow at a 7% CAGR within the same period.

This transition from 3G and below to 4G and now 5G deployment is a global trend and by 2023, nearly 60% of the mobile devices and connections globally will have 4G+ capability.

North America will have the highest share of its devices and connections on 4G+ connectivity – 62% by 2023.

By 2023 North America will be the region with highest share of connections on 5G at 17%.

The market for our wireless products and services is growing rapidly as the technology is adopted across a wide variety of markets, including the following key markets we target:

The consumer market encompasses a large and growing market of consumers using wireless-enabled devices and our antennas are deployed in consumer access points, wireless gateways, Wi-Fi

Mesh systems and extenders, smart TVs, smart home devices, and set-top

In these applications, our antennas support an array of technologies including WLAN, Wi-Fi,

LTE, 5G and LPWAN.

These devices facilitate a variety of consumer-oriented applications and services including high-speed wireless internet and wireless video streaming, home automation, smart appliances, home security systems, and smart TV entertainment systems.

We estimate that the total addressable market for our antennas in the service provider segment of the consumer market will grow at a compound annual growth rate, or CAGR, of 6%, while the IoT segment will grow at a CAGR of 11% between 2021 and 2024, based on ABI research and our internal estimates of average selling price, or ASP.

Furthermore, according to ABI Research, the market for residential gateways, routers and mesh devices shipped worldwide is expected to increase from 229 million device shipments in 2021 to 257 million in 2023.

Within the consumer market, the connected home market has seen an explosion of automation services and broadband-connected devices, making the demand for increased bandwidth, high throughput and reliable connectivity more critical than ever before.

Between 2017 and 2022, residential Wi-Fi Mesh systems and smart home devices are anticipated to experience some of the highest growth rates within the consumer market, with a CAGR of 63% and 31%, respectively.

Between 2021 and 2024, residential Wi-Fi Mesh systems are anticipated to experience some of the highest growth rates within the consumer market, with a CAGR of 16% according to ABI Research.

The enterprise market is characterized by devices that provide reliable wireless access for high-density environments such as buildings, campuses, transportation terminals and stadiums.

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Within this market, our antennas are deployed across a wide range of systems, devices, and applications that include access points and gateways, fixed wireless access infrastructure, small cells, and remote radio heads.

Within the enterprise market, which includes Industrial Internet of Things (IoT), we play a critical role in providing embedded and external connectivity solutions.

In enterprise, which includes IIoT, we play a critical role in providing embedded and external connectivity solutions and NimbeLink’s products are well positioned to increase our growth in this market.

Our customers in this space include the leading enterprise Wi-Fi

systems providers, whereby we often work under a joint development manufacturing (JDM) or ODM model, developing complete external antenna systems, including outdoor enclosure and mounting hardware, to meet demanding technical specifications, often resulting in higher ASP’s when compared to our more traditional embedded antenna business.

We estimate that the total addressable market for our antennas in the enterprise market will grow at a CAGR of 13% from 2021 to 2024, based on ABI Research device shipment numbers and our internal estimates of ASP.

The automotive industry is in the midst of significant transformation led by innovations around safety, energy efficiency, autonomous driving, and infotainment systems.

According to ABI Research, the number of vehicles produced worldwide with wireless connectivity capability is expected to increase from 32 million in 2017 to over 70 million per year by 2022.

While one segment of the automotive antenna market is tied to antennas designed and integrated into new vehicles, the other is tied to the fleet and a ftermarket segment.

In the automotive market, our antennas are deployed in a wide range of vehicles to support a variety of wireless connectivity solutions in the fleet and aftermarket segment and support a variety of technologies that include Wi-Fi, 3G, LTE, Satellite and LPWAN.

The fleet and aftermarket segment consist of applications whereby rugged vehicular wireless routers are paired with external antenna systems to provide connectivity to fixed and mobile assets.

3G, LTE, 5G, and satellite connectivity.

The fleet and aftermarket segment of the automotive market consists of applications whereby rugged vehicular wireless routers are paired with external antenna systems to provide connectivity to fixed and mobile assets and includes first responder and public safety vehicle fleets, the targets for our AirgainConnect AC-HPUE antenna-modem.

Within the fleet and aftermarket market segment, there has been a rise in the number of antennas per vehicle.

This is largely driven by the increasing needs of connectivity across different access technologies that include Wi-Fi, 3G, LTE, 5G, Satellite, and low power wide area networking, or LPWAN.

We estimate the total addressable market for our antennas in the automotive market will grow at a CAGR of 15% from 2017 and 2022, based on ABI Research device shipment numbers and our internal ASP estimates.

This is largely driven by the increasing needs of connectivity across different access technologies that include Wi-Fi,

3G, LTE, 5G, and satellite.

We estimate the total addressable market for our antennas (excludes antenna-modems) in the automotive fleet antenna market in North America, will grow at a CAGR of 11% from 2021 and 2024, based on ABI Research device shipment numbers and our internal ASP estimates.

Antenna Design and Testing

We are an antenna solution provider that not only has the expertise in antenna design, engineering and integration, but also the testing and optimization of OTA throughput.

In addition to antenna design, engineering and integration, we also provide testing and optimization of OTA throughput.

Our expertise is based on years of experience in dealing with multiple antenna designs performing under varying RF conditions.

We believe our expertise is important to our success as the wireless RF environment in homes, enterprises, and public places is a highly complex multipath environment that is not accurately represented by antenna simulation tool modeling.

We believe our test expertise is important to our success as the wireless RF environment in homes, enterprises, and public places is a highly complex multipath environment that is not accurately represented by antenna simulation tool modeling.

While common antenna industry practice is to design antennas exclusively within a passive environment using simulation tools based on the assumption of free space, we design our antenna systems using a combination of device and environment modeling combined with active antenna OTA throughput performance feedback.

This performance feedback loop forms the foundation of our integration process that optimizes overall device performance, as well as antenna characteristics.

Our regiona l OTA testing facilities are configured to replicate the real-world performance in typical homes and offices, while providing isolation from external RF and wireless interference.

Our regional OTA testing facilities are configured to replicate the real-world performance in typical homes and offices, while providing isolation from external RF and wireless interference.

This low noise environment is key when comparing and identifying the effect of various antenna and system designs on wireless throughput performance.

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Engineering Review

When a new product is initiated, our engineers review antenna-specific characteristics, such as gain (throughput), efficiency, and coupling, alongside board-level factors, such as on-board noise and radio interference, as well as identification and housing constraints.

When a new product is initiated, our engineers review antenna-specific characteristics, such as gain (throughput), efficiency, and coupling, alongside board-level factors, such as on-board

noise and radio interference, as well as identification and housing constraints.

We plan to expand awareness of our brand and our offerings throughout the OEM and carrier technical community through participation in industry technical working groups, forums and trade events.

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While many of our competitors select a final antenna based on RF chambers testing, we proceed with a critical further step and measure actual system level performance of the device in an iterative process to optimize performance.

Over-the-Air Throughput Testing .

We have developed a set of proprietary performance metrics, measurement methodologies, and automated test conditions to help enable accurate and repeatable characterization of the relative OTA performance of 802.11-based WLAN devices such as routers, gateways, and set-top boxes.

Throughput Testing

WLAN devices such as routers, gateways, and set-top

Our benchmark testing provides an accurate assessment of the performance characteristics for devices to enable manufacturers to make informed decisions in selecting the best antenna solution for their needs.

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We continuously strive to remain at the forefront of wireless technologies.

We work closely with leading wireless chipset manufacturers, carriers and OEM’s on the cutting edge of new wireless technology introduction, while we continue to focus on extending our core competencies in product innovation, quality, integration and OTA performance verification processes, helping to ensure we continue to deliver on our promise of optimal antenna system performance.

Benefits to our C ustomers

We work closely with leading wireless chipset manufacturers, carriers and OEM’s on the cutting edge of new wireless technology introduction, while we continue to focus on extending our core competencies in product innovation, quality, levels of integration and OTA performance verification processes, helping to ensure we continue to deliver on our promise of optimal antenna and wireless system performance.

Benefits to our Customers

We have developed strong relationships with leading WLAN chipset vendors, OEMs, and key service providers, keeping us at the forefront of new developments in wireless technologies and industry requirements.

We share our expertise with customers in several areas including design, engineering, and testing, and provide insights based on years of experience across hundreds of devices.

By harnessing our specialized experience and expertise, we offer solutions that can improve our customers’ product performance, reduce their staff costs and allow our customers to focus on non-antenna related factors in the face of short design, engineering and production windows.

Rather than rely upon a captive engineering group that only works on in-house opportunities, we act as an outsourced antenna design, engineering, and test group for our customers.

We also bring years of experience in delivering high performance, ultra-reliable wireless connectivity for mobile, fleet, and industrial IoT and machine-to-machine, or M2M, applications.

related factors in the face of short design, engineering and production windows.

Rather than rely upon a captive engineering group that only works on in-house

opportunities, we act as an outsourced antenna design, engineering, and test group for our customers.

We also bring years of experience in delivering high performance, ultra-reliable wireless connectivity for mobile, fleet, and industrial IoT and machine-to-machine,

or M2M, applications.

Designed for all environments, our broad range of multi-band products support a variety of applications from kiosk and ATM connectivity to government and public safety fleet applications.

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This commitment to performance has established us as one of the recognized leaders in the design, testing, and performance of wireless systems, and led to what we believe is one of the broadest blue-chip customer lists in the industry.

Our antennas are found in a broad range of applications and end-user devices that are deployed in carrier, fleet, enterprise, residential, private, government, and public safety wireless networks and systems, including set-top boxes, access points, routers, modems, gateways, media adapters, Wi-Fi extenders, portables, digital televisions, sensors, and fleet and asset tracking devices.

Our antennas are found in a broad range of applications and end-user

devices that are deployed in carrier, fleet, enterprise, residential, private, government, and public safety wireless networks and systems, including set-top

boxes, access points, routers, modems, gateways, media adapters, Wi-Fi

extenders, portables, digital televisions, sensors, and fleet and asset tracking devices.

Our products have been adopted by some of the world’s leading telecom manufacturers and networking companies and are now being used by millions of carrier subscribers in the United States, Canada, Europe, and Asia Pacific.

We offer several product categories designed to maximize the performance of wireless devices while providing cost and design flexibility:

MaxBeam TM Embedded Antennas .

AirgainConnect.

In 2020 we introduced our AirgainConnect ™

AC-HPUE, the first antenna-modem from our break-through AirgainConnect platform.

AirgainConnect AC-HPUE includes an integrated FirstNet Ready ™

high-power LTE modem supporting the 3GPP Band 14 High Power UE output power functionality.

Band 14 spectrum is the nationwide, high-quality spectrum set aside by the U.S.

government specifically for FirstNet.

This rugged vehicle antenna-modem solution tightly couples essential LTE radio components to meet the most demanding needs of public safety and fleet vehicles.

By integrating an HPUE modem within an antenna assembly, AC-HPUE ensures transmission of the maximum allowable radiated power directly to the LTE antenna elements.

Our patented technology supporting the AirgainConnect platform eliminates the signal loss over coax cables that run from mobile routers mounted in vehicle compartments to roof-mounted antennas, which combined with HPUE capability provides up to ten times the transmit power at the antenna when compared to the router’s conventional modem and antenna.

The result is a dramatic increase in the coverage area and higher data rates.

Custom Embedded Antenna Solutions.

Within our consumer market, we engage with chipset providers, carriers, ODM’s and OEMs to develop highly integrated and customized embedded antenna solutions.

While we have over 1000 models of embedded antennas supporting the common wireless standards, our embedded solutions are typically designed specifically to optimize the connectivity of an individual device, and therefore they are usually unique for a specific customer device as a solution set.

It is common practice for us to draw from our existing antenna design library when implementing embedded antenna programs, to drive constant improvement and evolution in performance, while reducing time to market.

The embedded antennas we develop can generally be categorized under one or more of the following product families:

Embedded Antennas

MaxBeam high gain antennas utilize patented technology to deliver up to double the signal strength than conventional antenna solutions.

The superior performance is derived by combining the benefits of directional antenna elements with high isolation between each beam.

Each antenna utilizes mixed material, multi-element assemblies to provide optimal performance and turnkey integration.

The MaxBeam antenna family offers maximum coverage designed for WLAN and Cellular frequency bands.

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Profile Embedded Antennas feature highly efficient printed circuit board, or PCB, based solutions offering low profile designs optimized for confined industrial designs.

Ideal for embedded applications requiring integration flexibility, the Profile family includes case, through- hole, and SMT mount designs and is available in single, dual, tri-band, and multi-band configurations.

Our Profile Embedded Antenna family features four new designs targeting Wi-Fi 6 wireless system design challenges and are designed to enable tailored performance characteristics to meet the needs of any Wi-Fi 6 implementation.

These antennas, including the Q Series, X Series, H Series and Q6 Series are designed to help enable us to deliver market-leading antenna integration and OEM design support for complex Wi-Fi 6 carrier gateways and access points.

Profile Contour Embedded Antennas

Profile Contour Embedded line utilizes Flexible Printed Circuit Board, or FPC, providing performance with device integration flexibility.

Flexible and very low profile, these antennas can conform to many two-dimensional shapes making them ideal for integration within

curved enclosures and wearable devices.

Profile Contour antennas are supplied pre-fitted with adhesive tape for ease of integration .

Profile Contour Embedded antennas utilize flexible printed circuit board, or FPC, providing performance with device integration flexibility.

Flexible and very low profile, these antennas can conform to many two-dimensional

shapes making them ideal for integration within curved enclosures and wearable devices.

Ultra Embedded Antennas

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These stamped metal designs provide high efficiency and allow for rapid customization and tuning to each device, making them ideal for embedded applications requiring integration flexibility.

Ideal for high volume applications, these antennas utilize superior materials and plating for optimal performance.

OmniMax High Performance External Antennas .

Our external dipole antennas are designed for indoor and outdoor WLAN, cellular and LPWAN applications.

With an extensive variety of single and dual-band designs available, this family of dipoles offers superior performance and flexible mounting options for various deployment scenarios.

Our dipole antennas are available in 2.4 and 5GHz bands supporting Wi-Fi frequencies, as well as wideband 617MHz to 6GHz for global cellular and 5G New Radio (NR) applications, and ISM band, or industrial, scientific, and medical radio, which includes 868 to 928MHz for international unlicensed LPWAN applications.

Embedded Antennas.

These chipset agnostic smart antennas utilize dynamic spatial and polarity selection, providing optimal throughput performance and coverage for 802.11ac Wi-Fi

MaxBeam Carrier Class Antennas

These are a series of multi-band LTE and WLAN antennas for small cell systems including femtocells, picocells, and Wi-Fi hotspots, backhaul and community systems.

These embedded antennas are designed to provide increased range and coverage for indoor or outdoor applications that demand carrier-grade service levels.

SmartMax TM Embedded Antennas.

These chipset agnostic smart antennas utilize dynamic spatial and polarity selection, providing optimal throughput performance and coverage for 802.11ac Wi-Fi systems.

Designed for set-top-box, gateway, and smart HDTV deployments, SmartMax improves spatial correlation among received signals, producing a significant improvement in the performance of MIMO systems.

SmartMax antennas require no dedicated connectivity to Wi-Fi chipset base-band circuits, minimizing the cost and complexity typically associated with Smart Antenna System integration.

These are a series of multi-band LTE and WLAN antennas for small cell and enterprise Wi-Fi systems including femtocells, picocells, and Wi-Fi hotspots, backhaul and community systems.

These antennas are often deployed by our customers under a white label model;

therefore they are typically highly customized to specific carrier, ODM or OEM needs, and will often include customized external enclosures and mounting hardware.

Antenna Plus Antennas.

Through the Antenna Plus brand, we offer a broad and expanding portfolio of automotive, fleet, public safety and M2M antennas.

Our high performance, low profile antennas are designed for many wireless standards and frequencies, including LTE and 5G cellular with MIMO, Wi-Fi, Bluetooth, Dedicated Short Range Communications, or DSRC, and GPS/GNSS.

Our high performance, low profile antennas are designed for many wireless standards and frequencies, including LTE and 5G cellular with MIMO, Wi-Fi

6, Bluetooth, Intelligent Transport Systems, or ITS, and GPS/GNSS.

Designed for all environments, our broad range of highly integrated and multi-band products support a variety of applications from kiosk and ATM connectivity to government and public safety vehicular applications.

We have over 26 years of experience designing mission critical automotive fleet and mobile antenna applications.

As the original inventor of the low-profile cellular antenna, we are known for our market leading performance, quality, and long product life.

Our antennas build on the best in class RF performance, leading design features, and extended operational life of our highly successful fleet and public safety antenna products connecting to almost any vehicular router or modem.

As the original inventor of the low-profile

cellular antenna, we are known for our market leading performance, quality, and long product life.

Our antennas build on the best-in-class

RF performance, leading design features, and extended operational life of our highly successful fleet and public safety antenna products connecting to almost any vehicular router or modem.

Design Partnerships

We have entered into joint development efforts with WLAN chipset vendors to collaborate on next-generation WLAN reference designs, where we jointly pursue the development of reference design platforms optimized for use with integrated embedded antenna systems.

These WLAN reference designs are intended to provide ODMs with high performance, embedded antenna solutions that provide consistent, measurable results and provide a path to reduced product development costs and cycle times.

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Growth Strategy

Our growth strategy is centered around targeting three key markets, consumer, enterprise and automotive.

The following graphic provides a summary of the estimated total addressable market for each of these three markets.

We are in the process of transitioning from a passive antenna and related services provider to a wireless system solutions provider, targeting higher levels of integration and complexity, and therefore, higher selling prices and margins.

Climbing the value curve and expanding our presence in adjacent markets are key ingredients to our growth strategy.

In terms of markets, our growth strategy is centered around targeting three key markets, specifically, consumer, enterprise and automotive.

We consider our consumer market as foundational revenue, with enterprise and automotive markets representing our primary growth markets.

The following graphic provides a summary of our estimated total addressable market within each of these three markets.

As highlighted in the graphic below, based on ABI Research and our internal ASP estimates, by 2022, we estimate a total addressable market to be in excess of $12 billion.

The consumer market has seen an explosion of automation services and broadband-connected devices, making the demand for increased bandwidth and reliable connectivity more critical than ever before.

Within the carrier gateway and set-top box devices, the transition towards 802.11ac and 802.11ax (also called Wi-Fi 6) standard, and more recently the 6GHz extension to Wi-Fi 6, labelled Wi-Fi 6E is a key market growth driver.

The shift toward Gigabit Wi-Fi 802.11ac and 802.11ax is creating increased demand for our solutions as the number of antennas per device increases substantially.

802.11ax provides a theoretical ability to deliver speeds in excess of 14Gbps using 4x4 MIMO which is comparable to full duplex Docsis 3.1 and 5G bandwidths, resulting in wireless bandwidth delivery achieving parity with wireline speeds.

Within our foundational consumer market most of our revenue comes from gateways and routers that are sold to cable multiple system operators, or MSOs.

While the MSO companies have faced “cord-cutting” in favor of over-the-top,

or OTT, internet-based

programming, the cord-cutting trends have not impacted the market for gateways and routers, as OTT devices still need access to the internet in the home through Wi-Fi

via the gateway.

The transition towards Wi-Fi

6 standards, and more recently the 6GHz extension to Wi-Fi

6, labelled Wi-Fi

6E is driving a new wave in device upgrades.

The shift toward Gigabit Wi-Fi

6 is creating increased demand for our solutions as the number of antennas per device increases substantially.

6 provides a theoretical ability to deliver speeds in excess of 14Gbps using 4x4 MIMO which is comparable to full duplex DOCSIS 3.1 and 5G bandwidths, resulting in wireless bandwidth delivery achieving parity with wireline speeds.

Given the performance improvements over existing systems, service providers around the world are expediting their upgrade cycle towards higher performing consumer devices, driving a device design refresh cycle.

We continue to penetrate an increasing scope of adjacent wireless device applications such as home security, smart appliances, waterproof and solar outdoor wireless systems, and healthcare.

We are also expanding our footprint in these markets through support of an increasing range of IoT wireless standards, such as Bluetooth, ZigBee, Z-Wave, Thread, NB-IoT and LoRa WAN.

Our engineering team provides custom antenna solutions to support a variety of device constraints, including flexible antenna technology for curved and smaller form factors, and specific absorption rate (SARs) compliant antennas for body worn applications.

We provide IP alarm and security camera solutions for one of the world’s leading providers of video surveillance products.

We continue to penetrate an increasing scope of adjacent wireless device applications within the consumer market such as home security, smart appliances, and connected healthcare devices.

We are also expanding our footprint in these markets through support of an increasing range of IoT wireless standards, such as Bluetooth, ZigBee, Z-Wave,

Thread, NB-IoT

and LoRa WAN.

Our engineering team provides custom antenna solutions to support a variety of device constraints, including flexible antenna technology for curved and smaller form factors, and specific absorption rate, or SARs, compliant antennas for body worn applications.

In the automotive market, the trend towards the ubiquitous connected car and the demand for increasingly complex aftermarket/fleet wireless connectivity solutions, are key growth drivers for us.

Automakers are seeking to integrate a wide range of radio access technologies to support connected vehicles, from 2G and 3G for light, telematics-based connectivity to LTE—leading to 5G, and Wi-Fi for heavy infotainment use, and DSRC for safety applications such as collision avoidance.

Other standards such as 802.11p will play a role in vehicle-to-vehicle, or V2V, and vehicle-to-everything, or V2X, communications, while GPS will remain a basic requirement for vehicle location tracking and navigation.

The automotive segment has six distinct product categories, including mobility management, vehicle management, entertainment, safety, drive assistance, and well-being.

Many of these categories can be particularly useful to owners of vehicle fleets, such as company and service vehicles, as well as companies in the car-rental and car-sharing industries.

Although many of the technologies needed to support these functions are already established, the number of fleet sales in this segment is expected to grow.

Connected cars require internal and external antennas for a complete wireless solution.

We have a leading portfolio of automotive antenna connectivity solutions, from embedded solutions for OBD II, IHU and connected car gateways, to custom shark fin

antennas for automotive OEM’s, and high-quality antenna products for mobile and automotive fleet applications for government, public safety, and enterprise applications.

In the enterprise market we see growth potential beyond the traditional Wi-Fi market across multiple product categories and applications, driven by availability of new frequency bands in the form of Citizens Broadband Radio Service, or CBRS, and 5G NR.

The automotive market represents a significant growth opportunity both near and long term.

Connected cars require embedded and external mounted antennas for a complete wireless solution.

We have a leading portfolio of automotive antenna connectivity solutions, from embedded solutions for OBD II, IHU and connected car gateways, to custom ‘shark fin’ style antennas for automotive applications, mainly targeting mobile and automotive fleet applications for government, public safety, and enterprise applications.

Our strategy is to continue to leverage our Antenna Plus brand in the North American fleet and public safety automotive aftermarket segments to generate near-term revenue.

For longer term revenue growth opportunities, we are pursuing the European and other international aftermarket fleets and motorhome antenna markets.

In 2020 we launched Centurion Next, the first of the 5G family with Wi-Fi

6 support, as part of the 5G refresh of our Antenna Plus fleet antenna product lines.

For international markets, we obtained our first European compliance qualification in 2020 opening the door to the distribution of our 5G capable fleet and M2M antenna products.

Our new patented AirgainConnect antenna-modem platform is expected to be the biggest growth contributor to the automotive market.

The first AirgainConnect product, the AC-HPUE,

is currently one of only two HPUE products certified for use on the AT&T FirstNet network.

AT&T activated the first HPUE on the FirstNet network in January 2021.

While FirstNet primary users are first responders, there are extended-primary users from transit agencies;

public-utility and tow-truck

school districts;

a state child-protective-services agency, airports, and television/media news outlets.

The AirgainConnect platform has the potential to address a very broad set of sub-market

applications.

In addition, AC-HPUE

supports all AT&T LTE bands, so is usable with or without HPUE.

We are developing our next generation AirgainConnect product to feature a global modem.

The patented AirgainConnect AC-HPUE is the first HPUE antenna-modem product available for vehicles and we have certain exclusive rights to the use of the HPUE modem module from our partner Assured Wireless Corporation, for rooftop vehicular applications.

Within the enterprise market, we are targeting new 5G device programs primarily sub-6GHz,

citizens broadband radio service, or CBRS, and Wi-Fi

6, for integrated smart antenna systems.

This allows us to leverage our core competencies in advanced antenna designs in a market that offers significantly higher selling prices in the 10s of dollars to hundreds of dollars range.

CBRS is driving new use cases including private LTE, leading to private 5G, and cellular operators for fixed wireless access, or FWA, and for secondary indoor spectrum.

New 5G spectrum is creating opportunities for operators to establish or expand FWA offerings, to compete with wired incumbents, driving development of a new wave of 5G-enabled customer-premises equipment (CPE) devices and small cells.

We are developing core 5G antenna IP, while actively engaged in a new wave of 5G small cell and FWA device integration projects.

Technical challenges relate to complexity of integration and coverage of a broader range of frequency bands, including new millimeter wave, or mmW 5G NR spectrum.

Our first phase of active beam steering mmW 5G antenna technology is anticipated to be ready in the first quarter of 2020 for customer engagement.

Within the traditional enterprise Wi-Fi markets, we see growth potential in outdoor stadium and arena deployments, in-building coverage for commercial applications, kiosks, asset tracking, and Industrial IoT.

According to ABI Research, enterprise access point shipments are estimated to reach 16.5 million per year by 2023.

In the connected smart home and city IoT sub-segments, we see embedded and external connectivity solutions for LPWAN, such as NB-IoT and LoRa for multiple applications.

This includes security and asset tracking applications.

In the M2M and IoT Infrastructure sub-segment serviced by our Antenna Plus products, typical applications include in-building, out-building, and on-building connectivity solutions for commercial, retail, and office, outdoor kiosk, signage, and fixed asset connectivity and tracking.

New 5G spectrum is creating opportunities for operators to establish or expand FWA offerings, to compete with wired incumbents, driving development of a new wave of 5G-enabled

customer-premises equipment devices and small cells.

The enterprise market is characterized by various submarket segments, each having different characteristics and therefore different growth strategies.

Our strategy in the enterprise Wi-Fi

submarket is to focus on customized embedded, and external antenna systems for the top two global OEMs in this market.

In 2020 we were on-boarded as a supplier to a global leader in Enterprise Wi-Fi

for the award of an active stand-alone high-gain Wi-Fi

antenna system that we expect to enter volume production in Q3 2021.

On the cellular side of the enterprise market, we are currently developing core 5G antenna systems designs and associated intellectual property, while being actively engaged in a new wave of 5G small cell and FWA device.

We expect this trend in 5G enabled device opportunities to continue to ramp in 2021.

Technical challenges relate to the complexity of integration and coverage of a broader range of frequency bands, including new millimeter wave, or mmW 5G NR spectrum.

Our first phase of active beam steering mmW 5G antenna technology was successfully demonstrated to our customers in a live demonstration at CES in January 2020.

Within the M2M and IoT infrastructure submarket of the enterprise market, serviced by our Antenna Plus products, we see expect to see growth in demand for in-building,

out-building,

and on-building

connectivity solutions for commercial, retail, and office, outdoor kiosk, signage, and fixed asset connectivity and tracking.

According to ABI research, by 2023, there will be approximately 12 million new M2M wireless modem shipments per year, up from approximately six million new modem shipments in 2018.

We provide a comprehensive set of services for single and multi-client Wi-Fi performance testing, characterization, and validation for wireless devices utilizing advanced MIMO configurations and technologies including WLAN, Bluetooth, ZigBee, Z-Wave, LoRa, CBRS, LTE, and more.

We expect the addition of NimbeLink products to our portfolio to immediately help us drive growth in the IIoT segment of the enterprise market.

We provide a comprehensive set of services for single and multi-client OTA performance testing, characterization, and validation for wireless devices utilizing the common wireless standards including WLAN, Bluetooth, ZigBee, Z-Wave,

LoRa, LTE, CBRS, and 5G.

Our service offering includes early-stage system design, custom engineering support, and superior OTA testing services for service providers and OEMs.

Our proprietary OTA testing process has become somewhat of an industry standard in wireless throughput evaluation, enabling our service offering to create stickiness with customers as they depend on our testing services to evaluate their products.

We believe there is significant potential for growth of our service offering revenue, including through renewable service provider service contracts, and to further leverage this offering to customers and applications in adjacent markets.

Our proprietary OTA testing process has become highly regarded in wireless throughput evaluation, enabling our service offering to create stickiness with customers as they depend on our testing services to evaluate their products.

Some of our customers have implemented their own performance testing capability in-house,

reducing their need to purchase OTA performance testing services from us, thereby limiting the growth potential of our services revenue in the enterprise market.

Despite these challenges, we continue to see strong demand for these services, including through renewable service provider service contracts, and we plan to continue to leverage this offering to customers and applications in adjacent markets.

Over the next several years, we believe the adoption of 5G on a global basis will offer incremental growth opportunities for us.

According to ABI Research, 25% of network traffic will be 5G by 2023.

5G antenna systems are more complex and highly integrated as they need to support complex active architectures for new configurations such as active beam forming, and new frequency ranges in the sub-6GHz and mmWave, frequency bands.

and mmWave, frequency bands.

We believe this shift in antenna complexity and integration will allow us to leverage our expertise and antenna performance, including integration between antenna and the RF front end, to enhance the value proposition to our customers.

Furthermore, highly integrated and complex designs demanded by 5G will require closer coordination between the ecosystem of component vendors, OEMs and Chipset Vendors, a key strength of ours.

In the United States we have a strong position with service providers and carriers that supply in-home residential wireless equipment.

In the United States we have a strong position with service providers, carriers, and MSO’s that supply in-home

residential wireless equipment.

That said, we believe there are growth opportunities on the international front.

This includes Europe, especially in areas of the connected home and automotive OEM markets which will offer meaningful opportunities.

Our mission is to be a leading supplier of smart, embedded and external antennas to the expanding wireless device and systems marketplace.

This includes Europe, especially in areas of the connected home and aftermarket automotive markets which will offer meaningful opportunities.

Our mission is to connect the world through advanced antenna systems and integrated wireless solutions.

The key elements of our strategy are listed below.

Transition to systems solutions.

Our core business historically was primarily embedded antenna solutions, but with the launch of the AirgainConnect platform and our NimbeLink acquisition, we are transitioning to a more system-oriented wireless connectivity systems solutions provider.

We believe the transition to a wireless system solution provider will offer more value to customers and drive growth in the consumer, enterprise, and automotive markets.

Innovate into new products and markets.

We will leverage our core competencies in product innovation, quality, levels of integration, and OTA performance verification processes to continue to release new wireless connectivity solutions taking advantage of developments in our key markets.

Our launch of the AirgainConnect platform represents innovation in the automotive market with a more system-oriented product than our previous offerings.

Trends such as the IoT are driving an explosion of demand for wireless connectivity in new applications in and out of the home, including IIoT.

IIoT market segments are characterized by high volumes, and a prevalence of cellular and GNSS connectivity.

Due to the low antenna count and low investment that is typically allocated to the antenna portion of the IIoT designs, the traditional embedded antenna business model was not a strategic priority for us.

However, with the acquisition of NimbeLink and the ability to offer a wider variety of cellular solutions we are focused on utilizing our wireless technologies and antennas to pursue growth in the IIoT market segment.

Expand our customer base within our core markets.

We sold our products in 2020 to over 90 end-customers.

Although the customers that pay for our products are often ODMs and distributors, it is primarily the OEMs, carriers and retail-focused end-customers that drive the selection of our solutions.

Although the customers that pay for our products are often ODMs and distributors, it is primarily the OEMs, carriers, and retail-focused end-customers

that drive the selection of our solutions.

Increase our sales to existing customers.

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In many cases we are providing antenna solutions for an isolated subset of our customer’s wireless product portfolios.

We plan to initiate targeted marketing campaigns to expand our solutions footprint—effec tively to mine our existing customer base more effectively to expand our revenue on a per customer basis .

Innovate into new products and markets.

Trends such as the IoT are driving an explosion of demand for wireless connectivity in new applications in and out of the home, including connected vehicles.

Our technology and solutions are well suited to the majority of these high growth potential new markets.

We also see new opportunities in M2M communications, LTE, Near Field Communications, Identification and Tracking via Radio Frequency Identification, or RFID, Personal Area Networks such as 5G, Wi-Fi 6, ZigBee, Z-Wave, LoRa or Bluetooth, and other wireless communications methods and applications.

We are constantly working to expand our solutions footprint with existing customers — effectively to mine our existing customer base more effectively to expand our revenue on a per customer basis.

As we continue to expand our solution breadth into adjacent markets, we create further opportunity to ‘sell more’ to our existing customers.

Focus on system performance and products with long lifecycles

Our antenna solutions are typically integrated into customers’ products at the design stage.

Once an equipment manufacturer designs our antennas into its product offering, it is difficult to design out the incumbent solution since changing antenna suppliers involves significant cost, time, effort, and usually re-certification of products.

This is especially valuable in the service provider market, where product generations generally ship for two to three years before displacement by next-generation devices.

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The substantial majority of our sales are to ODMs and distributors based in China.

However, for the year ended December 31, 2019, approximately 58% of the end-customers of our products, based on sales, were in North America and 42% were outside of North America.

In addition, our top two customers, Synnex Technology International (HK) Ltd.

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We market our design capabilities directly to chipset vendors and service providers to generate demand.

OEM (Original Equipment Manufacturer).

We sell our products to OEM customers worldwide.

These customers make many products including Wi-Fi access points and repeaters, set-top boxes, video gateways, and other wireless equipment found in homes, schools, businesses, and networks.

These customers make many products including Wi-Fi

access points and repeaters, set-top

boxes, video gateways, and other wireless equipment found in homes, schools, businesses, and networks.

Typically, these customers work with us to help overcome a specific performance issue, or to improve product performance against internal or external benchmarks.

OEMs are also often mandated or encouraged by service providers to select us.

ODM (Original Design Manufacturer).

We sell our products to ODM customers worldwide with the vast majority being headquartered in Asia.

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Chipset vendors and Semiconductor manufacturers work with us to promote better integration and improved performance, and to create optimal reference designs.

These customers help influence purchasing decisions with OEM and ODMs as their reference designs and associated Bills of Materials (BoM’s) and suppliers are usually closely replicated in production designs.

This can also improve time-to-market for OEM and ODM customers.

These customers help influence purchasing decisions with OEM and ODMs as their reference designs and associated Bills of Materials (BoMs) and suppliers are usually closely replicated in production designs.

This can also improve time-to-market

for OEM and ODM customers.

Service Providers.

Typically, w e do not sell antennas directly to telecommunications and broadband service providers, but these companies often specify overall product performance, and sometimes use our wireless test and valid ation services.

Typically, we do not sell antennas directly to telecommunications and broadband service providers, but these companies often specify overall product performance, and sometimes use our wireless test and validation services.

By working with the service providers, we are often written into the carrier’s specifications, which are sent to the OEM or ODM.

Our antenna products are then shipped directly from our contract manufacturers to the device manufacturer.

In d oing so, we can have an impact on an OEM’s or ODM’s ability to hit certain performance levels.

In doing so, we can have an impact on an OEM’s or ODM’s ability to hit certain performance levels.

We have worked with service providers, and in some cases, we have sold testing equipment that mirrors the testing equipment and environment we use internally.

Value Added Reseller (VARs) and Distributors.

These partners combine our antenna products with other devices and services including vehicular modems, to deliver complete integrated and installed aftermarket solutions to end customers.

These partners combine our antennas and wireless products with other devices and services including vehicular modems, to deliver complete integrated and installed aftermarket solutions to end customers.

The VAR and Distributor channels are particularly important as the main outlet for our automotive product lines, including Antenna Plus and our new AirgainConnect platform.

Sales and Marketing

Our sales and marketing organizations work together closely to improve market awareness, build a strong sales pipeline, and cultivate ongoing customer relationships to drive sales growth.

We sell our products to OEMs, ODMs, carriers and through manufactures for retail.

We sell our embedded antenna products and, in many cases, related services to OEMs, ODMs, carriers and through manufacturers for retail.

Our global sales effort consists of direct and indirect sales teams, and indirect channel partners.

Our direct sales team consists of inside sales personnel based in China and Taiwan and our outside field sales teams based in the United States, the United Kingdom, Europe, Korea, China, and Taiwan.

Our direct sales team consists of inside sales personnel based in the United States, China and Taiwan and our outside field sales teams based in the United States, the United Kingdom, Korea, China, and Taiwan.

Our outside field sales teams consist of business, sales, account, technical marketing and program managers, and field application engineers, or FAEs.

Our indirect channel partners consist of distributors, engineering design companies and outside sales representatives.

Our outside sales team is engaged in pre-sales, account management, and creating partnership opportunities with third parties such as service providers and semiconductor manufacturers.

Our outside sales team is engaged in pre-sales,

account management, and creating partnership opportunities with third parties such as service providers and semiconductor manufacturers.

They are assigned quotas and have defined sales territories and/or accounts.

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Our FAEs assist these managers by providing technical support to existing customers.

Our indirect channel partners provide lead generation, pre-sales support, product fulfillment and, in certain circumstances, post-sales customer service and support.

This channel partner network often co-sells with our inside sales and field sales teams.

Our indirect channel partners provide lead generation, pre-sales

support, product fulfillment and, in certain circumstances, post-sales customer service and support.

This channel partner network often co-sells

with our inside sales and field sales teams.

Our channel provides us with additional sales leverage by sourcing new prospects, providing technical support to existing customers, upselling for additional use cases and daily indexing capacities, and maintaining repeat business with existing customers.

These channels provide added coverage to customers and prospects we cannot reach directly.

The percentage of our sales from indirect channel partners was 26%, 27% and 24% for the years ended December 31, 2019, 2018, and 2017 respectively.

Our marketing strategy is focused on building market awareness and acceptance of our products and promoting our brand.

We market our products directly to both prospective and existing customers.

Our marketing strategy is focused on building market awareness and acceptance of our products and promoting our brands.

We market our products directly to both prospective and existing customers, and we actively engage in co-marketing

with our distribution and VAR partners globally.

The marketing department is engaged in product management, product marketing, program management, corporate marketing, tradeshows and public speaking, development of our website and collateral material, and creating partnership opportunities with third parties, such as service providers, distributors and semiconductor manufacturers.

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We strategically choose the location and focus of each trade show based on each show’s prospectus, reputation, and audience attendees, allocating marketing funds to support presence at shows annually in North America, Asia, and Europe.

These shows provide us with the opportunity to

showcase our newest products and system designs, as well as set up meetings with current and po tential OEM and ODM customers, carriers, and chipset manufacturers .

The embedded and external antenna market is highly competitive and is characterized by rapid technological change and evolving standards.

Our principal competitors fall into three categories:

These shows provide us with the opportunity to showcase our newest products and system designs, as well as set up meetings with current and potential OEM and ODM customers, carriers, and chipset manufacturers.

The antenna and wireless solutions market is highly competitive and is characterized by rapid technological change and evolving standards.

Our principal competitors fall into four categories:

Direct Competitors.

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Ltd., and WHA YU Industrial Co., Ltd., among others.

In addition, the barriers to entry for the antenna industry are low, and we expect new competitors to emerge in the future.

In-house Antenna Design and Engineering Teams.

Within the antenna industry, the barriers to entry for newcomers is low, and we expect new competitors to emerge in the future.

For NimbeLink, Multitech and Digi international are direct competitors for the Skywire modem while the Asset tracker solution competes against full vertical solutions in each industry.

Antenna Design and Engineering Teams.

Several of our existing customers, including OEMs and ODMs which design and build complete wireless devices, also have internal resources to design, engineer, and produce antenna solutions.

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In these cases, there may be short-term or long-term contractors who work to design, engineer, test, and manage production of an antenna solution.

Automotive Modem Companies.

Our AirgainConnect platform has the potential to complete with existing suppliers of vehicular modems such as Sierra Wireless, and Cradlepoint in the future.

As mentioned earlier, we are not aware of any competing solutions with the same architecture and benefits as AirgainConnect on the market today.

In the near term we see the potential to create meaningful partnerships with the existing vehicular modem and router providers, to supply antenna-modems, particularly while these companies do not have an HPUE capable wireless solution within their own product stable, or antenna-modem products.

It should be noted that we have filed for and have issued several patents covering our antenna-modem offerings, and we have exclusive rights to the use of the HPUE modem module from our partner Assured Wireless Corporation, for rooftop vehicular applications.

The principal competitive factors in our markets include:

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Brand awareness and reputation;

Antenna performance, such as reliability, range, throughput;

Antenna and antenna-modem performance, such as reliability, range, throughput;

Ability to integrate with other technology infrastructures;

Offerings across breadth of in-home wireless products;

Offerings across breadth of in-home

wireless products;

Antenna design and testing capabilities;

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Intellectual property portfolio.

We compete primarily based on antenna performance, our intellectual product portfolio, design and testing capabilities, and reputation.

We compete primarily based on antenna and RF system performance, our intellectual product portfolio, design and testing capabilities, and reputation.

We believe we generally compete favorably on the basis of these factors.

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Manufacturing and Operations

We have limited in-house manufacturing capability, solely with respect to antennas deployed in the fleet and M2M market.

We have limited in-house

manufacturing capability, solely with respect to antennas deployed in the fleet and M2M antenna market.

We do final assembly of these antenna products at our facility located in Scottsdale, Arizona, where we purchase raw materials, assemble, test, and ship products.

We outsource the manufacturing for all of our other products to contract manufacturers, or CMs, located in China.

We have long-term relationships with these CMs, and

work together to control raw materials, assembl y , test, quality and ship ment of our antenna products.

We outsource the manufacturing for most other products to contract manufacturers, or CMs, located in China and Myanmar.

We have long-term relationships with certain of these CMs, and work together to control raw materials, assembly, test, quality and shipment of our antenna products.

We perform quality assurance and testing at our California facilities.

We maintain a close direct relationship with these manufacturers to help ensure supply and quality meet our requirements.

Although the contract manufacturing services required to manufacture and assemble our products can be satisfied by one of our CMs or may be readily available from several established manufacturers, it may be time consuming and costly to qualify and implement new contract manufacturer relationships.

If our CMs suffer an interruption in their businesses, or experiences delays, disruptions, or quality control problems in their manufacturing operations, or we otherwise have to change or add additional contract manufacturers or suppliers, our ability to ship products to our customers could be delayed, and our business adversely affected.

The CMs manufacture antenna products according to our design specification, materials specification, quality standards, and delivery requirements.

The contract manufacturing services required to manufacture and assemble our products can be satisfied by one or more of our CMs, however it may be time consuming and costly to qualify and implement new contract manufacturer relationships.

If our CMs suffer an interruption in their businesses, or experiences delays, disruptions, or quality control problems in their manufacturing operations, or we otherwise need to change or add additional contract manufacturers or suppliers, our ability to ship products to our customers could be delayed, and our business adversely affected.

Our qualified CMs manufacture antenna products according to our design specification, materials specification, quality standards, and delivery requirements.

We have full control and authority over the selection of materials, manufacturing processes, and inspection processes.

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We invest considerable time and financial resources in research and development to enhance our antenna design and system integration capabilities and conduct quality assurance testing to improve our technology.

Our engineering team consists of engineers located in research, design, and test centers in California, Arizona, and Florida, as well as the United Kingdom, China, and Taiwan.

We have a total of 47 employees or dedicated representatives within our research and development organization representing approximately 36% of our workforce.

Our engineering team consists of engineers located in research, design, and test centers in California, Arizona, and Florida, as well as the United Kingdom and China.

Our engineering team actively participates in research and development activities to expand our capabilities and target applications for the consumer, enterprise and automotive markets.

We expect to continue to expand our product offerings and technology solutions in the future and to invest significantly in ongoing research and development efforts.

In the connected home, we are developing a series of antenna products for the home security market, including designs ranging from Z-Wave applications for door sensors to customized connectivity solutions for smart metering using LTE and LPWAN standards, and antenna modules enabling gigabit speed last meter connectivity for broadband operators.

We continue to architect and improve our antenna systems for our enterprise class smart antenna customers, as well as new high-performance designs for the outdoor Wi-Fi and small cell markets.

We continually review alternative antenna designs for increasingly complex carrier gateway products, which are expanding beyond just delivering Wi-Fi to also include 5G, ZigBee, Z-Wave, DECT, LPWAN, NB-IoT and Bluetooth applications.

We expect to continually expand our product offerings and technology solutions over time and to continue to invest significantly in ongoing research and development efforts.

In the connected home, we are developing a series of antenna products for the home security market, including designs ranging from Z-Wave

applications for door sensors to customized connectivity solutions for smart metering using LTE and LPWAN standards, and antenna modules enabling gigabit speed last meter connectivity for broadband operators.

We continue to architect and improve our antenna systems for our enterprise class smart antenna customers, as well as new high performance designs for the outdoor Wi-Fi

and small cell markets.

We continually review alternative antenna designs for increasingly complex carrier gateway products, which are expanding beyond just delivering Wi-Fi

to also include 5G, ZigBee, Z-Wave,

DECT, LPWAN, NB-IoT

and Bluetooth applications.

Finally, we are engaged in the design and evaluation of antenna systems for next generation 802.11ax technology, including reference designs with industry leading chipset vendors.

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In addition, although it is difficult to make broad generalizations, our sales tend to be lower in the first quarter of each year compared to other quarters due to the Chinese New Year.

The extension of the lunar new year holidays due to the recent outbreak of the coronavirus disease (COVID19) originating in China, as well as the broader economic impacts caused by the outbreak, may contribute to the traditionally slower first quarter sales this year.

The broader economic impacts caused by the COVID-19 pandemic, may contribute to the traditionally slower first quarter sales this year.

Results for any quarter may not be indicative of the results that may be achieved for the full fiscal year and these patterns may change as a result of general customer demand or product cycles.

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patents covering our embedded and external antenna technology with expiration dates ranging from 2021 to 2024, and 19 pending patent applications in the United States Patent and Trademark Office.

Outside of the United States we have 24 issued patents and five pending patent applications with expiration dates ranging from 2020 to 2037, which entail

counterparts of U.S.

Outside of the United States we have 21 issued patents and five pending patent applications with expiration dates ranging from 2021 to 2037, which entail counterparts of U.S.

patent applications.

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Hardware implementations of switched directional antennas;

Taken together, these patents with priority dates as far back as November 2000, form both a barrier to competition and a licensable asset for customers in the MIMO arena.

Large assortment of antenna designs;

Antenna assemblies and systems for vehicles;

Compact embedded wireless modems and environmental monitoring assemblies.

Taken together, these patents with priority dates as far back as November 2000, form both a barrier to competition and a licensable asset for customers in the MIMO and antenna assembly categories.

Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information that we regard as proprietary.

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Third parties, including certain of these leading companies, may in the future assert patent, copyright, trademark and other intellectual property rights against us, our channel partners or our customers.

As of December 31, 2019, we had a total of 126 employees including 83 in the United States, 31 in China, six in Taiwan, and four in the United Kingdom.

Among the total 126 employees, 49 of them were primarily engaged in research and development, 28 of them were primarily engaged in sales and marketing and 49 of them were primarily engaged in operations and general and administration functions.

As of December 31, 2020, we had a total of 129 employees and dedicated representatives including 84 in the United States, 32 in China, 6 in Taiwan, 1 in South Korea and 4 in the United Kingdom.

Among the total 129 employees and dedicated representatives, 47 of them were primarily engaged in research and development, 31 of them were primarily engaged in sales and marketing and 51 of them were primarily engaged in operations and general and administration functions.

In addition, we contract directly with engineers and sales contractors domestically and internationally.

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We consider our relationship with our employees to be good.

The United States and other countries around the world are experiencing a major health pandemic related to COVID-19,

which has created considerable instability and disruption in the U.S.

and world economies.

Governmental authorities in impacted regions are taking actions in an effort to slow COVID-19’s

spread, resulting in limitations on business operations and limits on consumer and employee travel.

We have worked, and continue to work, to comply within the framework of local, county, state, and federal laws.

In that regard, we have implemented a wide range of practices to protect and support our employees and to modify and monitor the engagement with our customers, suppliers, and contract manufacturers.

Specifically in response to intensifying efforts to contain the spread of COVID 19, we began to monitor or modify our hours of operation and the hours of our employees based in China, as did our contract manufacturers.

As the situation progressed and the outbreak was stabilized in China, our workers and facilities, as well as those of our contract manufacturers, returned to full function with precautions in place to help prevent outbreak or spread of the virus.

In the United States, most of our employees in the San Diego office are working from home and our offices are reserved for only those who cannot perform certain functions remotely, such as periodic prototyping and testing.

In accordance with local regulations, engineering, testing and production operations in our Scottsdale office, as well as testing operations in our remote facilities have resumed with protocols in pace to prevent and limit the spread of the virus.

In each work location, protocols have been established and remain in place, in accordance with government guidance, in order to minimize the risk to those employees whose presence in the office is necessary, or allowed.

Our salespeople continue to engage with customers in order to secure sales of, and opportunities for, our products and services remotely rather than in-person.

The continued spread of COVID-19

and its related effects on our business have had a material and adverse effect on our business operations.

Through the date of this filing, these disruptions or restrictions include restrictions on our ability to travel, temporary closures of our office buildings or the facilities of our customers or suppliers, and during the fourth quarter disruptions with certain components in our supply chain located in Asia.

Such disruptions of our customers have had a negative impact on our sales and operating results, particularly in the first quarter.

Related to sales, we saw orders begin to rebound in the second and third quarters.

However, the continued spread of COVID-19

may adversely affect such rebound and have a negative effect on our operating results in future quarters.

The impact of the COVID-19

pandemic on the U.S.

and world economies generally, and our future results in particular, could be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted.

This includes new information that may emerge concerning COVID-19,

the success of vaccinations and other actions taken to contain or treat COVID-19

and additional reactions by consumers, companies, governmental entities and capital markets.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business