What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-06-08 compared with 2021-12-10 · 136 added, 128 removed, 765 unchanged (26% of the section changed)

8 unchanged sentences

These risks include, but are not limited to, the following:

The COVID-19 pandemic could adversely affect our business in a material way.

Our ability to sell our products to several China customers has been restricted.

In addition, we are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets, including China.

Global economic and political conditions, including possible trade tariffs and trade restrictions, may have an impact on our business and financial condition in ways that we currently cannot predict.

Our primary inventory warehouse is located in Hong Kong and may be affected by recent political, social and economic conditions in Hong Kong.

The COVID-19 pandemic could adversely affect our business in a material way, including closure of our offices or the facilities of our suppliers or customers.

Our customers incorporate components supplied by multiple third parties, and a supply shortage or delay in delivery of these components could delay orders for our solutions by our customers.

Shortages in, or increased costs of, wafers and materials could increase the manufacturing times for our products and adversely impact our ability to meet customer demand, reduce our gross margins and lead to reduced revenues.

Camera manufacturers incorporate components supplied by multiple third parties, and a supply shortage or delay in delivery of these components could delay orders for our solutions by our customers.

We do not have long-term supply contracts with our third-party manufacturing vendors, and they may not allocate sufficient capacity to us at reasonable prices to meet future demands for our solutions.

We outsource our wafer fabrication, assembly and testing operations to third parties, and if these parties fail to produce and deliver our products according to requested demands in specification, quantity, cost and time, our reputation, customer relationships and operating results could suffer.

If our customers do not design our solutions into their product offerings, or if our customers’ product offerings are not commercially successful, our business would suffer.

If we fail to penetrate new markets, our revenue and financial condition could be harmed.

If we fail to develop and introduce new or enhanced solutions that meet market requirements on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

If we fail to penetrate new markets, including the automotive OEM ADAS market, our revenue and financial condition could be harmed.

Our target markets may not grow or develop as we currently expect and are subject to market risks, any of which could harm our business, revenue and operating results.

If we fail to develop and introduce new or enhanced solutions on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

Our ability to sell our products to certain China customers has been restricted.

In addition, we are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets, including China.

Global economic and political conditions, including possible trade tariffs and trade restrictions, may have an impact on our business and financial condition in ways that we currently cannot predict.

Our primary inventory warehouse is located in Hong Kong and may be affected by political, social and economic conditions in Hong Kong.

We face political and other risks conducting business in Taiwan, particularly due to its relationship with China.

Achieving design wins is subject to lengthy competitive selection processes that require us to incur significant costs.

13 unchanged sentences

While we intend to continue to invest in research and development, we may be unable to make the substantial investments that are required to remain competitive in our business.

We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs.

The average selling prices of video and image processing solutions in our target markets have historically decreased over time and will likely do so in the future, which could harm our revenue and gross margins.

7 unchanged sentences

Deterioration of the financial conditions of our customers could adversely affect our operating results.

Third parties’ assertions of infringement of their intellectual property rights could result in our having to incur significant costs and cause our operating results to suffer.

Any potential dispute involving our patents or other intellectual property

could affect our customers, which could trigger our indemnification obligations to them and result in substantial expense to us.

Any potential dispute involving our patents or other intellectual property could affect our customers, which could trigger our indemnification obligations to them and result in substantial expense to us.

Some of our operations and a significant portion of our customers and our subcontractors are located outside of the United States, which subjects us to additional risks, including increased complexity and costs of managing international operations and geopolitical instability.

6 unchanged sentences

In addition to global macroeconomic effects, the COVID-19 pandemic and related adverse public health developments have been causing, and are expected to continue to cause, disruption to our operations.

We have had to impose remote or work from home conditions in many of our offices, including the United States, Italy, Japan, South Korea and Taiwan.

While we have not yet experienced a significant disruption of our operations as a result of the COVID-19 pandemic, if the remote or work from home conditions continue for an extended period of time, we may experience delays in product development, a decreased ability to support our customers, reduced design win activity, and overall lack of productivity.

We have had to impose remote or work from home conditions for varying periods of time in many of our offices, including the United States, China, Italy, Japan, South Korea and Taiwan.

If such remote or work from home conditions continue for an extended period of time, we may experience delays in product development, a decreased ability to support our customers, reduced design win activity, and overall lack of productivity, which could harm our financial results.

Approximately 350 of our employees are located in Taiwan and approximately 200 employees are located in China, and lengthy closures of these offices could significantly disrupt our software engineering and customer support operations.

In addition, we and our suppliers, third-party distributors and customers have been, and are expected to continue to be, disrupted by quarantines and restrictions on certain employees’ ability to perform their jobs, office closures or restrictions, disruptions to shipping infrastructure, or other travel or health-related restrictions.

Depending on the magnitude of such effects on our manufacturing activities or the operations of our suppliers, third-party distributors or sub-contractors, our supply chain, manufacturing and product shipments could be delayed, which could materially adversely affect our business, results of operations and financial condition.

Disruptions may also adversely affect our customers’ ability to manufacture their products, which in turn could reduce their demand for our products.

In the first quarter of fiscal year 2023, we have experienced, and we expect to continue to experience, a significant disruption of orders by customers, as well as logistics throughout the Asia supply chain, as a result of the COVID-19 pandemic and measures taken to control spread of the virus.

Depending on the continuing magnitude of such effects on the operations of our suppliers, third-party distributors and our supply chain, our product shipments could be delayed, which could materially adversely affect our business, results of operations and financial condition.

Such continuing disruptions may also adversely affect our customers’ ability to manufacture their products, which in turn could reduce their demand for our products.

In addition, decreased consumer demand from the impact of pandemic lockdowns in China has contributed to decreased revenue in consumer-related markets, including home IP security, automotive aftermarket and consumer markets.

The semiconductor industry in general is currently experiencing significant shortages of capacity, due in part to COVID-19, which has resulted in a lengthening of the manufacturing lead time for our products and could be impacting the normal forecasting and ordering patterns of our customers.

Moreover, if there is a significant COVID-19 outbreak that impacts Samsung Electronic Corporation’s ability to manufacture our SoCs or our third-party contractors’ ability to assemble, test and ship our products, we could experience delays or reductions in our ability to ship products to our customers.

In addition, the COVID-19 pandemic or other disease outbreaks will, in the short-term, and could over the longer term, adversely affect the economies and financial markets of many countries, resulting in an economic downturn or recession that could adversely affect demand for our products and impact our results of operations and financial condition.

There can be no assurance that any decrease in sales resulting from the COVID-19 pandemic will be offset by increased sales in subsequent periods.

14 unchanged sentences

For example, in the past we have secured design wins for camera products that were never commercially released by our customer or did not sell in volumes initially forecast by the customer, as a result of factors beyond our control.

If other products or other product categories incorporating our SoC solutions are not commercially successful or experience rapid decline, our revenue and business will suffer.

If products incorporating our SoC solutions are not commercially successful or experience rapid decline, our revenue and business will suffer.

Similarly, if an OEM designs one of our SoC solutions into its product, we are not assured that we will receive or continue to receive new design wins from that OEM, which could negatively impact our business.

If we fail to penetrate new markets, our revenue and financial condition could be harmed.

Years ago, a substantial portion of our revenue was generated from sales of our SoCs to OEMs and ODMs of HD video cameras, including IP security cameras, wearable cameras and drones.

Our revenue from several of these markets, however, has experienced significant declines.

As a result, we believe that our future revenue growth, if any, will significantly depend on our ability to expand within the camera markets with our new artificial intelligence, or AI, computer vision SoC solutions, particularly in emerging markets such as the OEM automotive, robotics and industrial markets, as well as the existing professional IP security and home security and monitoring camera markets.

We believe that our future revenue growth, if any, will significantly depend on our ability to expand within the Intelligence of Things, or IoT, camera markets with our new artificial intelligence, or AI, computer vision SoC solutions, and the OEM automotive, robotics and industrial markets.

Each of these markets presents distinct and substantial risks and, in many cases, requires us to develop new functionality or software to address the particular requirements of that market.

We anticipate that as we continue to move into new markets, such as the OEM automotive, robotics and industrial markets, we will likely face competition from larger competitors with greater resources and more history in these markets.

If any of these markets do not develop as we currently anticipate, or if the development of such markets is delayed or impacted by factors outside of our control, such as the COVID-19 pandemic, or if we are unable to penetrate them successfully with our solutions, our revenue could decline, and our financial condition would be negatively impacted.

If any of these markets do not develop as we currently anticipate, the technical requirements of these markets evolve in ways we do not anticipate, the development of such markets is delayed or impacted by factors outside of our control, such as the COVID-19 pandemic, or if we are unable to penetrate them successfully with our solutions, our revenue could decline and our financial condition would be negatively impacted.

Some of these markets are primarily served by only a few large, multinational OEMs with substantial negotiating power relative to us and, in some instances, with internal solutions that are competitive to our products.

Meeting the technical requirements and securing design wins with any of these companies will require a substantial investment of our time and resources and we cannot assure you that we will secure design wins from these or other companies or that we will achieve meaningful revenue from the sales of our solutions into these markets.

We anticipate that as we continue to move into new markets, such as the OEM automotive, robotics and industrial markets, we will face competition from larger competitors with greater resources and more history in these markets.

If we fail to penetrate these or other new markets we are targeting, our financial condition would likely suffer.

Moreover, if we are successful in achieving design wins in these new markets, it will likely take longer to generate revenue from such design wins than in our current markets.

If we fail to develop and introduce new or enhanced solutions on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

We operate in a dynamic environment characterized by rapidly changing technologies.

To compete successfully, we must design, develop, market and sell enhanced solutions that provide increasingly higher levels of performance and functionality and that meet the technical and cost expectations of our customers.

Our existing or future solutions could be rendered obsolete by the introduction of new products by our competitors;

convergence of other markets with or into the camera market;

the market adoption of products based on new or alternative technologies;

the emergence of new industry standards applicable to our solutions;

or the requirement of additional functionality included in video processors.

In addition, some of the markets for our solutions are characterized by frequent introduction of next-generation and new products, short product life cycles, increasing demand for added functionality and significant price competition.

As we develop and introduce new solutions, we face the risk that customers may not value or be willing to bear the cost of incorporating these newer solutions into their products, particularly if they believe their customers are satisfied with current solutions.

Regardless of the improved features or superior performance of the newer solutions, customers may be unwilling to adopt our new solutions due to design or pricing constraints.

If we or our customers are unable to manage product transitions in a timely and cost-effective manner, our business and results of operations would suffer.

Our failure to anticipate or timely develop new or enhanced solutions in response to technological shifts could result in decreased revenue and our competitors achieving design wins that we sought.

In particular, we may experience difficulties with product design, development of new software, manufacturing, marketing or qualification that could delay or prevent our development, introduction or marketing of new or enhanced solutions.

In addition, for some markets, such as the automotive OEM market, we need to establish and maintain relationships with third-party suppliers or software providers in order to effectively market our solutions to end-customers.

Failure to establish these relationships could harm our ability to achieve design wins.

Delays in product development could impair our relationships with our customers and negatively impact sales of our solutions under development.

If we fail to introduce new or enhanced solutions that meet the needs of our customers or penetrate new markets in a timely fashion, we will lose market share, and our operating results will be adversely affected.

Shortages in, or increased costs of, wafers and materials could adversely impact our gross margins and lead to reduced revenues.

5 unchanged sentences

If we are unable to purchase wafers at favorable prices, our results of operations and financial condition will be adversely affected.

It is also possible during this time of supply chain capacity shortage that customers may place orders for our products that exceed their actual demand, which may lead to us manufacturing a surplus of products and could have a negative impact on our results or operations and cash reserves.

Our primary inventory warehouse is located in Hong Kong and may be affected by continued political, social and economic conditions in Hong Kong.

Our primary inventory warehouse is located in Hong Kong and may be affected by continued political, social, health and economic conditions in Hong Kong.

We operate a warehouse facility in Hong Kong through which the substantial majority of our finished SoCs are shipped to customers or logistic partners.

BIS has imposed additional restrictions on exports and reexports of U.S.-controlled items to Hong Kong by removing preferential treatment that Hong Kong used to receive and imposing more stringent licensing requirements similar to those applicable to China.

Hong Kong has experienced, and continues to experience, significant political unrest and social strife, including protests that resulted in the closing of the Hong Kong international airport in August 2019 for two days.

Hong Kong has experienced, and continues to experience, political unrest and social strife in addition to the impact of ongoing COVID-19 pandemic and measures to control spread of the virus.

In response to national security legislation adopted by the Chinese government, the U.S.

2 unchanged sentences

While such certification does not have an immediate impact on Hong Kong for trade or other purposes, this action represents an escalation in political and trade tensions involving the U.S, China and Hong Kong.

In addition, the Bureau of Industry and Security, or BIS, has imposed additional restrictions on exports and reexports of U.S.-controlled items to Hong Kong by removing preferential treatment that Hong Kong used to receive and imposing more stringent licensing requirements similar to those applicable to China.

It is possible that the U.S.

government may take future measures to impose stricter export controls or duties on shipments made to Hong Kong, add additional parties to the Entity List, or reduce preferential treatment currently accorded to Hong Kong, which could harm our business, increase the cost of conducting our operations in Hong Kong or result in retaliatory actions against U.S.

government may take future measures to impose stricter export controls or duties on shipments made to Hong Kong, which could harm our business, increase the cost of conducting our operations in Hong Kong or result in retaliatory actions against U.S.

Further, Hong Kong has been impacted by the COVID-19 pandemic and office closures or other restrictions in light of the pandemic may harm our business or increase the cost of conducting our operations in Hong Kong.

While we have not been materially impacted by these problems to date, continued deterioration in political, social or economic conditions in Hong Kong or future unforeseen problems, including health pandemics, could affect deliveries of our SoCs to our customers or logistic partners, possibly resulting in business interruptions, substantially delayed or lost sales, loss of inventory, or increased expenses that cannot be passed on to customers, any of which could ultimately have a material adverse effect on our business and financial results.

In such an eventuality, we could be forced to relocate our warehouse operations, either temporarily or permanently, to another potentially costlier location or find alternative potentially costlier methods of shipping our finished SoCs to customers and logistic partners.

While we are taking measures to attempt to maintain the continuity of our product delivery operations notwithstanding the impact on the use of our Hong Kong facility of the continued or deteriorating conditions in Hong Kong or other future unforeseen problems there, we cannot ensure that these measures will be successful in eliminating disruptions in our business.

In such an eventuality, we could be forced to relocate our warehouse operations, either temporarily or permanently, to another potentially costlier location (or a location resulting in higher tax costs) or find alternative potentially costlier methods of shipping our finished SoCs to customers and logistic partners.

Our target markets may not grow or develop as we currently expect and are subject to market risks, any of which could harm our business, revenue and operating results.

17 unchanged sentences

Alternatively, if we are unable to project customer requirements accurately, we may not build enough SoCs, which could lead to delays in product shipments and lost sales opportunities in the near term, as well as force our customers to identify alternative sources, which could affect our ongoing relationships with these customers.

We have in the past had customers significantly increase their requested production quantities with little or no advance notice.

If we do not fulfill customer demands in a timely manner, our customers may cancel their orders and we may be subject to customer claims for cost of replacement.

In addition, the rapid pace of innovation in our industry could render portions of our inventory obsolete.

Excess or obsolete inventory levels could result in unexpected expenses or increases in our reserves that could adversely affect our business, operating results and financial condition.

In addition, any significant future cancellations or deferrals of product orders could harm our margins, increase our write-offs due to product obsolescence and restrict our ability to fund our operations.

We depend on a limited number of customers and end customers for a significant portion of our revenue.

2 unchanged sentences

We anticipate that this customer concentration will continue for the foreseeable future.

In fiscal year 2021, the customers representing 10% or more of our revenue were WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or Wintech, our distributor, and Chicony Electronics Co., Ltd., or Chicony, a direct ODM customer, which accounted for approximately 63% and 16% of total revenue, respectively.

For the nine months ended October 31, 2021, the customers representing 10% or more of revenue were Wintech and Chicony, which accounted for approximately 63% and 15% of total revenue, respectively.

In fiscal year 2022, the customers representing 10% or more of our revenue were WT Microelectronics Co., Ltd., formerly Wintech Microelectronics Co., Ltd., or WT, our distributor, and Chicony Electronics Co., Ltd., or Chicony, a direct ODM customer, which accounted for approximately 62% and 13% of total revenue, respectively.

For the three months ended April 30, 2022, the customers representing 10% or more of revenue were WT, Chicony, and Hakuto Co., Ltd., or Hakuto, a Japan distributor, which accounted for approximately 57%, 11%, and 10% of total revenue, respectively.

We believe that our operating results for the foreseeable future will continue to depend on sales to a relatively small number of customers and end customers.

3 unchanged sentences

Moreover, because several of our largest OEM customers have a dominant position in their markets, a loss of a significant customer may not be easily replaced.

If we fail to develop and introduce new or enhanced solutions on a timely basis, our ability to attract and retain customers could be impaired and our competitive position could be harmed.

We operate in a dynamic environment characterized by rapidly changing technologies and technological obsolescence.

Our existing or future solutions could be rendered obsolete by the introduction of new products by our competitors;

convergence of other markets with or into the camera market;

the market adoption of products based on new or alternative technologies;

the emergence of new industry standards for video compression;

or the requirement of additional functionality included in video processors.

In addition, the markets for our solutions are characterized by frequent introduction of next-generation and new products, short product life cycles, increasing demand for added functionality and significant price competition.

Regardless of the improved features or superior performance of the newer solutions, customers may be unwilling to adopt our new solutions due to design or pricing constraints.

If we or our customers are unable to manage product transitions in a timely and cost-effective manner, our business and results of operations would suffer.

Our failure to anticipate or timely develop new or enhanced solutions in response to technological shifts could result in decreased revenue and our competitors achieving design wins that we sought.

In addition, for some markets, such as the automotive OEM market, we expect that we will need to establish relationships with third-party suppliers or software providers in order to effectively market our solutions to end-customers.

Failure to establish these relationships could harm our ability to achieve design wins.

Delays in product development could impair our relationships with our customers and negatively impact sales of our solutions under development.

Achieving design wins is subject to lengthy competitive selection processes that require us to incur significant costs.

3 unchanged sentences

We may not prevail in the competitive selection process, and even when we do achieve a design win, we may never generate any revenue despite incurring development expenditures.

For example, in the past we had achieved certain design wins and projected substantial future revenue as a result of such design wins.

Subsequently, based on factors outside of our control, the applicable end customers abruptly cancelled the projects, with no notice to us, resulting in a loss of projected revenue.

In addition, even if an OEM designs one of our SoC solutions into one of its products, we cannot be assured that we will secure new design wins from that OEM for future products.

1 unchanged sentence

Our customers generally take a considerable amount of time to evaluate our solutions.

The typical time from early engagement by our sales force to actual product introduction runs from nine to 12 months, though it will likely take significantly longer in new markets such as the OEM automotive and robotics markets.

The typical time from early engagement by our sales force to actual product introduction runs from nine to 12 months for IoT markets and potentially significantly longer in the OEM automotive, robotics and industrial markets.

The delays inherent in these lengthy sales cycles increase the risk that a customer will decide to cancel, curtail, reduce or delay its product plans, causing us to lose anticipated sales.

2 unchanged sentences

Some of our customers may require our products and our third-party contractors to undergo a qualification process that does not assure product sales.

If we are unsuccessful or delayed in qualifying these products or third-party contractors with a customer, our business and operating results could suffer.

If we are unsuccessful or delayed in qualifying these products or third-party contractors with a customer, our business and operating results c ould suffer.

Prior to purchasing our products, some of our customers, particularly in the automotive market, may require that our products and our third-party contractors undergo extensive qualification processes, which involve testing of our products in the customers’ systems, as well as testing for reliability.

5 unchanged sentences

We expect competition to increase in the future, which could have an adverse effect on our revenue and market share.

The global semiconductor market in general, and the computer vision, video and image processing markets in particular, are highly competitive.

The global semiconductor market in general, and the computer vision and video/image processing markets in particular, are highly competitive.

We compete in different target markets to various degrees on the basis of a number of competitive factors, including our solutions’ performance, features, energy efficiency, size, ease with which our solution may be integrated into our customers’ products, customer support, reliability and price, as well as on the basis of our reputation.

4 unchanged sentences

Our competitors range from large, international companies with greater resources offering a wide range of semiconductor products to smaller, nimble companies specializing in narrow markets.

In the security camera market, our primary competitors include AMLogic Inc., Axera Technology Co., Ltd., Goke Microelectronics Co., Ltd., HiSilicon Technologies Co., Ltd., or HiSilicon, which is owned by Huawei Technologies Co., Ingenic Semiconductor Co., Ltd., Lumissil Microsystems, Novatek Microelectronics Corp., or Novatek, OmniVision Technologies, Inc., Qualcomm Incorporated, or Qualcomm, SigmaStar Technology Corp., Socionext Inc., or Socionext, an entity created from the merger of the system LSI businesses of Fujitsu Ltd.

and Panasonic Corporation, and Texas Instruments Incorporated, or Texas Instruments, as well as vertically integrated divisions of security camera device OEMs, including Axis, Hanwha Techwin, and Google LLC, which is owned by Alphabet, Inc.

In the automotive camera market, we primarily compete against Allwinner Technology Co., Ltd., Horizon Robotics Inc., iCatch Technology, Inc., Mobileye, a subsidiary of Intel Corporation, or Intel, Novatek, NVIDIA Corporation, or NVIDIA, NXP Semiconductors N.V., Qualcomm, Renesas Electronics Corporation, Texas Instruments and Xilinx Inc.

In the robotics and emerging applications markets, our primary competitors are Fuzhou Rockchip Electronics Co., Ltd., NVIDIA, Qualcomm, and Texas Instruments.

In the other applications markets, our primary competitors are HiSilicon, Movidius Ltd., a subsidiary of Intel, NVIDIA, Qualcomm, Socionext, and vertically integrated divisions of our OEM customer, Shenzhen Dajiang Baiwang Technology Co., Ltd., or Dajiang Baiwang.

I n the IoT market, our primary competitors include AMLogic Inc., Fuzhou Rockchip Electronics Co., Ltd., HiSilicon Technologies Co., Ltd., or HiSilicon, which is owned by Huawei Technologies Co., Ingenic Semiconductor Co., Ltd., Novatek Microelectronics Corp., or Novatek, NVIDIA Corporation, or NVIDIA, OmniVision Technologies, Inc., Qualcomm Incorporated, or Qualcomm, SigmaStar Technology Corp., and Socionext Inc.

In the automotive camera market, we compete against Allwinner Technology Co., Ltd., Horizon Robotics Inc., iCatch Technology, Inc., Mobileye, a subsidiary of Intel Corporation, Novatek, NVIDIA, NXP Semiconductors N.V., Qualcomm, Renesas Electronics Corporation, and Texas Instruments.

Certain of our customers and suppliers also have divisions that produce products competitive with ours and other customers may seek to vertically integrate competitive solutions in the future.

9 unchanged sentences

our ability to develop and maintain relationships with key OEMs and ODMs;

our products’ effective implementation of video processing standards;

our products’ effective implementation of video processing or radar standards;

our ability to protect our intellectual property;

9 unchanged sentences

Accidental or willful security breaches or other unauthorized access by third parties to our facilities or our information systems or the existence of computer viruses in our data or software could expose us to a risk of information loss and misappropriation of proprietary and confidential information.

The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in interruptions and delays that may impede our sales, product distribution, financial reporting or other critical functions.

In addition, we could incur significant costs in notifying affected persons and entities and otherwise complying with the multitude of foreign, federal, state and local laws and regulations relating to the unauthorized access to, or use or disclosure of, personal information.

Security breaches, computer malware and computer hacking attacks have become more prevalent and sophisticated.

9 unchanged sentences

Any theft or misuse of this information could result in, among other things, damage to our reputation, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties and possible financial obligations for liabilities and damages related to the theft or misuse of this information, any of which could have a material adverse effect on our business, financial condition, our reputation, and our relationships with our customers and partners.

We may also encounter errors in corruption or loss of data, an inability to accurately process or record transactions, and security or technical reliability issues.

All of these could harm our ability to conduct core operating functions such as processing purchase orders and invoices, product distribution, recording and reporting financial and management information on a timely and accurate basis, and could impact our internal control compliance efforts.

We also rely on a number of third-party “cloud-based” service providers of corporate infrastructure services relating to, among other things, human resources, electronic communication services and some finance functions, and we are, of necessity, dependent on the security systems of these providers.

3 unchanged sentences

Our research and development expense was $167.3 million, $140.8 million and $129.7 million in fiscal years 2022, 2021 and 2020, respectively.

For the nine months ended October 31, 2021, our research and development expense was $118.8 million.

For the three months ended April 30, 2022, our research and development expense was $46.7 million.

We expect to increase our research and development expenditures as compared to prior periods as part of our strategy of focusing on the development of innovative computer vision, video and image processing solutions with increased functionality, and as we target new markets, such as the automotive OEM and robotics markets.

We are unable to predict whether we will have sufficient resources to achieve the level of investment in research and development required to remain competitive.

For example, development in the latest process nodes, such as 10 and 5 nanometer, or nm, costs significantly more than required to develop in larger process nodes, such as 28nm or 14nm.

For example, development in the latest process nodes, such as 5 nanometer, or nm, or smaller, costs significantly more than required to develop in larger process nodes, such as 14 or 10nm.

This added cost could prevent us from being able to maintain a technology advantage over larger competitors that have significantly more resources to invest in research and development.

22 unchanged sentences

We are increasing our investment in research and development and other functions to grow our business and address new markets, such as the OEM automotive and robotics markets.

To manage our growth successfully and handle the responsibilities of being a public company, we believe we must effectively, among other things:

recruit, hire, train and manage additional qualified engineers for our research and development activities, particularly in our offices in Asia and especially for the positions of semiconductor design and systems, applications engineering and computer vision development;

To manage growth successfully, we believe we must effectively, among other things:

recruit, hire, train and manage additional qualified engineers for our research and development activities, particularly for the positions of semiconductor design and systems, AI computer vision development and applications engineering;

add additional sales and business development personnel;

add additional finance and accounting personnel;

maintain and improve our administrative, financial and operational systems, procedures and controls;

2 unchanged sentences

We are likely to incur the costs associated with these increased investments earlier than some of the anticipated benefits, and the return on these investments, if any, may be lower, may develop more slowly than we expect or may not materialize.

In addition, development of products to address emerging markets, such as the OEM automotive and robotics markets, could negatively impact our ability to develop new products for our current markets, which may harm our financial condition, particularly in the near term.

If we are unable to manage growth effectively, we may not be able to take advantage of market opportunities or develop new solutions, and we may fail to satisfy customer product or support requirements, maintain product quality, execute our business plan or respond to competitive pressures.

1 unchanged sentence

Deterioration of the financial condition of our distributors or customers could adversely impact our collection of accounts receivable.

For the nine months ended October 31, 2021, the customers representing 10% or more of revenue and accounts receivable were Wintech and Chicony, which accounted for approximately 63% and 15% of total revenue, respectively.

As of October 31, 2021, accounts receivable with Wintech and Chicony were approximately $23.5 million and $12.4 million, respectively.

For the three months ended April 30, 2022, the customers representing 10% or more of revenue were WT, Chicony, and Hakuto, which accounted for approximately 57%, 11%, and 10% of total revenue, respectively.

As of April 30, 2022, accounts receivable with WT, Chicony, and Hakuto were approximately $3.1 million, $10.5 million, and $0.6 million respectively.

We regularly review the collectability and creditworthiness of our distributors and customers to determine an appropriate allowance for credit losses.

3 unchanged sentences

The semiconductor industry is highly cyclical and is characterized by constant and rapid technological change, rapid product obsolescence, price erosion, evolving standards, short product life cycles and wide fluctuations in product supply and demand.

The industry experienced a significant downturn during the 2008-2009 global recession and the economic impact of the COVID-19 pandemic could lead to a similar downturn in future periods.

The industry experienced a significant downturn during the 2008-2009 global recession.

These downturns have been characterized by diminished product demand, production overcapacity, high inventory levels and accelerated erosion of average selling prices.

Any future downturns could harm our business and operating results.

Furthermore, any significant upturn in the semiconductor industry could result in increased competition for access to third-party foundry and assembly capacity.

Recently, the semiconductor industry has experienced increased competition for access to third-party foundry and assembly capacity.

We are dependent on the availability of this capacity to manufacture and assemble our SoC solutions.

16 unchanged sentences

We believe this strategy will help us remain competitive.

We may face difficulties, delays and increased expense as we transition our products to new processes, such as the 5nm process node, and potentially to new foundries.

We may face difficulties, delays and increased expense as we transition our products to new processes, such as the 4nm or 3nm process nodes, and potentially to new foundries.

We currently depend on Samsung, as the principal foundry for our products, to transition to new processes successfully.

We cannot assure you that Samsung will be able to effectively manage such transitions or that we will be able to maintain our relationship with Samsung or develop relationships with new foundries.

Moreover, as we utilize more advanced process nodes beyond 5nm, we are increasingly dependent upon Samsung, who is one of the few foundries currently available for certain advanced process technologies.

Moreover, as we utilize more advanced process nodes beyond 5nm, we are increasingly dependent upon a very small number of foundries currently available for certain advanced process technologies.

If we or our foundry vendors experience significant delays in transitioning to smaller geometries or fail to efficiently implement transitions, we could experience reduced manufacturing yields, delays in product deliveries and increased costs, all of which could harm our relationships with our customers and our operating results.

10 unchanged sentences

We have research and development design centers and business development offices in China, Japan, Italy, South Korea and Taiwan, and we expect to continue to conduct business with companies that are located outside the United States, particularly in Asia.

We have research and development design centers and business development offices in China, Germany, Italy, Japan, South Korea and Taiwan, and we expect to continue to conduct business with companies that are located outside the United States, particularly in Asia.

We purchase wafers from foreign foundries, have our solutions assembled and tested by subcontractors located in Asia, and supply our solutions to customers located outside of the United States.

5 unchanged sentences

regional economic instability;

geopolitical instability and military conflicts;

geopolitical instability and military conflicts, including the ongoing conflict in Ukraine;

limited protection of our intellectual property and other assets;

15 unchanged sentences

On November 5, 2021, we completed our acquisition of Oculii Corp.

In connection with the transaction, Oculii became a wholly owned subsidiary of the Company.

In connection with the transaction, Oculii became our wholly owned subsidiary.

The benefits we expect to realize from this acquisition will depend, in part, on our ability to integrate the businesses successfully and efficiently.

4 unchanged sentences

Our management may face significant challenges in consolidating the operations of Ambarella and Oculii, integrating the technologies, procedures, and policies, as well as addressing the different corporate cultures of the two companies and retaining key personnel.

If the companies or technology are not successfully integrated, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

If the businesses or technology are not successfully integrated, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

Our existing or prospective customers, licensees, suppliers and/or partners may delay, defer or cease purchasing products or services from or providing products or services to us, delay or defer other decisions concerning us, or otherwise seek to change the terms on which they do business with us.

5 unchanged sentences

We used a significant portion of our cash in connection with the acquisition of Oculii, which was completed on November 5, 2021.

Our use of cash to fund the Oculii acquisition has reduced our liquidity and any future acquisitions may also reduce our liquidity.

Using cash to fund acquisitions may (i) limit our flexibility in responding to other business opportunities and (ii) increase our vulnerability to adverse economic and industry conditions.

Our use of cash to fund the Oculii acquisition has reduced our liquidity and any future acquisitions may also reduce our liquidity or require the use of equity.

Using cash to fund acquisitions may limit our flexibility in responding to other business opportunities and increase our vulnerability to adverse economic and industry conditions.

Our acquisition of Oculii and any acquisitions we may make in the future could disrupt our business, cause dilution to our shareholders, reduce our financial resources and harm our business.

Prior to our acquisition of Oculii, we had not made any acquisitions since our acquisition of VisLab S.r.l., or VisLab, in June 2015.

Our ability to make and successfully integrate acquisitions is unproven.

Prior to our acquisition of Oculii, we had not made any acquisitions since our acquisition of VisLab S.r.l.

in June 2015.

Our ability to make and successfully integrate acquisitions is largely unproven.

The Oculii acquisition and any future acquisitions may not strengthen our competitive position and may be viewed negatively by our customers, financial markets or investors, and we may not achieve our goals in a timely manner, or at all.

3 unchanged sentences

The complexity of calculating our tax provision may result in errors that could result in restatements of our financial statements.

We are incorporated in the Cayman Islands and our operations are subject to income and transaction taxes in the United States, China, Hong Kong, Japan, Italy, South Korea, Taiwan and other jurisdictions in which we do business.

We are incorporated in the Cayman Islands and our operations are subject to income and transaction taxes in the United States, China, Hong Kong, Germany, Italy, Japan, South Korea, Taiwan and other jurisdictions in which we do business.

Due to the complexity associated with the calculation of our tax provision, we have hired independent tax advisors to assist us.

11 unchanged sentences

the forecasting, scheduling, rescheduling or cancellation of orders by our customers;

shifts in consumer or manufacturer preferences and any resultant change in demand for video and image capture devices into which our solutions are incorporated;

shifts in consumer or manufacturer preferences and any resultant change in demand for our customers’ products;

changes in the competitive dynamics of our markets, including new entrants or pricing pressures;

1 unchanged sentence

our ability to successfully define, design and release new solutions in a timely manner that meet our customers’ needs;

changes in manufacturing costs, including wafer, test and assembly costs, mask costs, manufacturing yields and product quality and reliability;

timely availability of adequate manufacturing capacity from our manufacturing subcontractors;

changes in manufacturing costs, including wafer, test and assembly costs, mask costs, manufacturing yields and product quality and reliability;

the timing of product announcements by our competitors or by us;

13 unchanged sentences

If revenue levels are below our expectations, we may experience material adverse impacts on our business, including declines in margins and profitability, or incur losses.

For example, our revenue declined 2.5% in fiscal year 2021, increased 0.4% in fiscal year 2020 and declined 23% in fiscal year 2019.

We incurred a net loss in fiscal years 2021, 2020, and 2019, respectively.

For the nine months ended October 31, 2021, while our revenue increased by 50.2% compared to the same period in fiscal year 2021, we incurred a net loss of $17.2 million.

We may experience similar fluctuations or declines in revenue or net losses in the future, which would harm our financial results.

If we do not generate revenue growth, we may not be able to execute our business plan and our operating results could suffer.

We believe that our future revenue growth, if any, will significantly depend on our ability to expand within our existing camera markets, such as the existing professional IP security and home security and monitoring camera markets, and successfully penetrate new markets, such as the OEM automotive, robotics and industrial markets, with our new AI computer vision SoC solutions.

We believe that our future revenue growth, if any, will significantly depend on our ability to expand within our existing IoT camera markets, such as the existing professional IP security and home security and monitoring camera markets, and successfully penetrate new markets, such as the OEM automotive, robotics and industrial markets, with our new AI computer vision SoC solutions.

We believe that executing upon our business plan requires us to continue to develop new SoCs and new software to address the particular requirements of these markets.

Accordingly, we continue to invest in the development of new technology and solutions and expect our research and development expenditures to increase compared to prior periods.

Our revenue declined 2.5% in fiscal year 2021, increased 0.4% in fiscal year 2020 and declined 23% in fiscal year 2019.

We incurred net loss in fiscal years 2021, 2020, and 2019, respectively.

For the nine months ended October 31, 2021, while our revenue increased by 50.2% compared to the same period in fiscal year 2021, we incurred a net loss of $17.2 million.

Accordingly, if we are unable to generate or maintain adequate revenue growth, our financial results could suffer and our stock price could decline.

If we are unable to generate or maintain adequate revenue growth, our financial results could suffer and we may not be able to continue to invest in the development of new technology and solutions required to be successful.

We may have difficulty accurately predicting our future revenue and appropriately budgeting our expenses.

15 unchanged sentences

Sales to customers in Asia accounted for approximately 88%, 88% and 90% of our total revenue in fiscal years 2022, 2021 and 2020, respectively.

For the nine months ended October 31, 2021, sales to customers in Asia accounted for approximately 88% of our total revenue.

For the three months ended April 30, 2022, sales to customers in Asia accounted for approximately 83% of our total revenue.

Because most of our end customers or their ODM manufacturers are located in Asia, we anticipate that a majority of our future revenue will continue to come from sales to that region.

38 unchanged sentences

The unavailability of one or both of these foundries could significantly impact our ability to produce our new products or delay production, which would negatively impact our business.

Our customers incorporate components supplied by multiple third parties, and a supply shortage or delay in delivery of these components could delay orders for our solutions by our customers.

Our customers purchase components used in the manufacture of their products from various sources of supply, often involving several specialized components, including lenses, sensors, microcontrollers, power management integrated circuits (PMICs), Wi-Fi chips, and memory chips.

Any supply shortage or delay in delivery by third-party component suppliers, or a third-party supplier’s cessation or shut down of its business, may prevent or delay production of our customers’ products.

As a result of delays in delivery or supply shortages of third-party components, orders for our solutions may be delayed or canceled and our business may be harmed.

The semiconductor industry is currently experiencing shortages of certain devices, including microcontrollers, PMICs, Wi-Fi chips, which has impacted, and may continue to impact, our customers’ ability to build their products and negatively impact our customers’ demand for our solutions.

We believe these shortages have been exacerbated by the COVID-19 pandemic.

Similarly, our ability to generate design wins in some markets, such as the automotive OEM market, requires us to collaborate with third-party software suppliers in order to offer a complete solution to customers.

Our inability to successfully collaborate with such third-party suppliers, or such suppliers’ inability to develop and deliver software, could harm our ability to achieve design wins and harm our business.

Errors or defects within a camera system or in the manner in which the various components interact could prevent or delay production of our customers’ products, which could harm our business.

14 unchanged sentences

A substantial portion of our revenue is processed through a single distributor and the loss of this distributor may cause disruptions in our shipments, which may adversely affect our operations and financial condition.

We sell a significant percentage of our solutions through a single distributor, Wintech, which serves as our non-exclusive sales representative in Asia, other than Japan.

Approximately 63%, 60% and 58% of our revenue was derived from sales through Wintech for the fiscal years ended January 31, 2021, 2020 and 2019, respectively, and approximately 63% of our revenue was derived from sales through Wintech for the nine months ended October 31, 2021.

We anticipate that a significant portion of our revenue will continue to be derived from sales through Wintech in the foreseeable future.

In November 2019, WPG Holdings Co., or WPG, a Taiwan distributor, announced an unsolicited bid to acquire up to 30% of Wintech.

In January 2020, WPG acquired approximately 17% of Wintech, but indicated it intended to remain a passive investor in Wintech.

The acquisition of Wintech by WPG could have an adverse impact on our relationship with Wintech.

Our current agreement with Wintech is effective until September 2022, unless it is terminated earlier by either party for any or no reason with 60 days written notice or by failure of the breaching party to cure a material breach within 30 days following written notice of such material breach by the non-breaching party.

Our agreement with Wintech will automatically renew for additional successive 12-month terms unless at least 60 days before the end of the then-current term either party provides written notice to the other party that it elects not to renew the agreement.

Termination of the relationship with Wintech, either by us or by Wintech, could result in a temporary or permanent loss of revenue.

We sell a significant percentage of our solutions through a single distributor, WT, which serves as our non-exclusive sales representative in Asia, other than Japan.

Approximately 62%, 63% and 60% of our revenue was derived from sales through WT for the fiscal years ended January 31, 2022, 2021 and 2020, respectively, and approximately 57% of our revenue was derived from sales through WT for the three months ended April 30, 2022.

We anticipate that a significant portion of our revenue will continue to be derived from sales through WT in the foreseeable future.

In November 2019, WPG Holdings Co., or WPG, a Taiwan distributor, announced an unsolicited bid to acquire up to 30% of WT.

In January 2020, WPG acquired approximately 17% of WT, but indicated it intended to remain a passive investor in WT.

An acquisition of WT by WPG could have an adverse impact on our relationship with WT.

Our current agreement with WT is effective until September 2022, unless it is terminated earlier by either party for any or no reason with 60 days written notice or by failure of the breaching party to cure a material breach within 30 days following written notice of such material breach by the non-breaching party.

Our agreement with WT will automatically renew for additional successive 12-month terms unless at least 60 days before the end of the then-current term either party provides written notice to the other party that it elects not to renew the agreement.

Termination of the relationship with WT, either by us or by WT, could result in a temporary or permanent loss of revenue.

We may not be successful in finding suitable alternative distributors on satisfactory terms, or at all, and this could adversely affect our ability to effectively sell our solutions in certain geographical locations or to certain end customers.

Furthermore, Wintech, or any successor or other distributors we do business with, may face issues obtaining credit, which could impair their ability to make timely payments to us.

Furthermore, WT, or any successor or other distributors we do business with, may face issues obtaining credit, which could impair their ability to make timely payments to us.

We are subject to risks associated with our distributors' product inventories.

8 unchanged sentences

Our reserve estimates associated with products stocked by our distributors are based largely on reports that our distributors provide to us on a weekly or monthly basis.

To date, we believe this resale and channel inventory data have been generally accurate.

To the extent that these data are inaccurate or not received in a timely manner, we may not be able to make reserve estimates for future periods accurately or at all.

3 unchanged sentences

As a result of delays in delivery or supply shortages of third-party components, orders for our solutions may be delayed or canceled and our business may be harmed.

For example, a disruption in the availability of image sensors from Sony Corporation as a result of the April 14, 2016 Kumamoto, Japan earthquake impacted our customers’ ability to build or launch cameras and, as a result, negatively impacted the timing and scope of demand for our SoCs in the second and third quarters of fiscal year 2017.

The semiconductor industry is currently experiencing shortages of certain devices, which has impacted, and may continue to impact, our customers’ ability to build their products and negatively impact our customers’ demand for our solutions.

15 unchanged sentences

During such a transition, we would be required to meet customer demand from our then-existing inventory, as well as any partially finished goods that could be modified to the required product specifications.

We do not seek to maintain sufficient inventory to address a lengthy transition period because we believe it is uneconomical to keep more than minimal inventory on hand.

We do not seek to maintain sufficient inventory to address a lengthy transition period because we believe it is uneconomical.

As a result, we may not be able to meet customer needs during such a transition, which could delay shipments, cause production delays, result in a decline in our sales and damage our customer relationships.

18 unchanged sentences

The risk of an earthquake or tsunami in South Korea, Taiwan, Japan and elsewhere in the Pacific Rim region is significant due to the proximity of major earthquake fault lines.

For example, in December 2006 a major earthquake occurred in Taiwan and in March 2011 a major earthquake and tsunami occurred in Japan.

Although we are not aware of any significant damage suffered by our third-party contractors as a result of those natural disasters, the occurrence of additional earthquakes or other natural disasters could result in the disruption of our foundry vendor or assembly and test capacity.

A disruption in the availability of image sensors from Sony Corporation as a result of the 2016 Kumamoto, Japan earthquake impacted our customers’ ability to build or launch cameras and, as a result, negatively impacted the timing and scope of demand for our SoCs in fiscal year 2017.

Similarly, a severe cold storm in Texas in February 2021 disrupted the manufacturing of some of our products at Samsung’s Texas facility for several weeks.

Any disruption resulting from such events could cause significant delays in the production or shipment of our products until we are able to shift our manufacturing, assembling or testing from the affected contractor to another third-party vendor.

6 unchanged sentences

In December 2020, certain affiliated entities of our customer Shenzhen Dajiang Baiwang Technology Co., Ltd., or Dajiang Baiwang, were added to the Entity List.

While the addition of Hikvision, Dahua and affiliates of Dajiang Baiwang to the Entity List negatively impacts our ability to ship items subject to BIS regulations to these listed entities, we have determined that we are able to ship some SoC products to the listed entities in compliance with applicable law.

While the addition of such customers to the Entity List negatively impacts our ability to ship items subject to BIS regulations to these listed entities, we have determined that we are able to ship some SoC products to the listed entities in compliance with applicable law.

Notwithstanding our ability to continue to supply some SoC products to the listed entities, these customers may seek to obtain similar or substitute products from our competitors that are not subject to these limitations, or to develop similar or substitute products themselves.

8 unchanged sentences

Global economic and political conditions, including possible trade tariffs and trade restrictions, may have an impact on our business and financial condition in ways that we currently cannot predict.

Beyond the BIS actions relating to Hikvision, Dahua and affiliates of Dajiang Baiwang, general trade tensions between the United States and China have been escalating, which has, in our view, created and will continue to create an uncertain business environment.

For example, BIS has added over 150 entities related to Huawei Technologies Co., Ltd.

to the Entity List and created new controls on foreign-produced items when one of these entities is a party to the transaction.

Our operations and performance depend significantly on global, regional and U.S.

economic and geopolitical conditions .

If additional tariffs or trade restrictions are imposed on our SoC solutions or the products of our customers, or trade restrictions are imposed on our ability to conduct business with certain customers, there could be a negative impact on our operations and financial performance.

8 unchanged sentences

The materialization of these risks could have a material adverse effect on our business and financial condition.

Further, our business and performance are subject to economic conditions, and our suppliers, distributors, and customers may suffer their own financial and economic challenges.

Inflation or other deteriorations in global economic conditions may impact our operating expenses and third parties may demand pricing accommodations, which could harm our ability to meet customer demands or collect revenue or otherwise could harm our business and financial results.

Russia’s ongoing conflict with Ukraine has triggered significant sanctions from U.S.

and European leaders.

Resulting changes in U.S.

trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a trade war.

Furthermore, if the conflict between Russia and Ukraine continues for a long period of time, or if other countries, including the U.S., become further involved in the conflict, we could face significant adverse effects to our business and financial condition.

In addition, some of our customers and third-party partners have engineering teams located in Russian and/or Ukraine, whose operations have been and may continue to be disrupted by the ongoing conflict between the countries.

If such disruption were to continue for an extended period, our customers could face delays in the launch of new products containing our solutions, resulting in delayed or decreased demand for our solutions.

We have significant business operations in Taiwan, including approximately 350 employees, and many of our third-party manufacturing suppliers are located in Taiwan.

Accordingly, our business, financial condition and results of operations may be affected by changes in governmental and economic policies in Taiwan, social instability and diplomatic and social developments in or affecting Taiwan due to its international political status.

Although significant economic and cultural relations have been established between Taiwan and China, we cannot assure that relations between Taiwan and China will not face political or economic uncertainties in the future.

Any deterioration in the relations between Taiwan and China, and other factors affecting military, political or economic conditions in Taiwan, could disrupt our business operations and materially and adversely affect our results of operations.

We are subject to governmental export and import controls that could subject us to liability or impair our ability to compete in international markets.

4 unchanged sentences

Noncompliance with these laws could have negative consequences, including government investigations, penalties and reputational harm.

Compliance with export and import regulations have not had a significant impact on our business to date, but changes in our products or changes in export, import and economic sanctions laws and regulations may delay our introduction of new products in international markets, prevent our customers from deploying our products internationally or, in some cases, prevent the export or import of our products to or from certain countries altogether.

Changes in our products or changes in export, import and economic sanctions laws and regulations may delay our introduction of new products in international markets, prevent our customers from deploying our products internationally or, in some cases, prevent the export or import of our products to or from certain countries altogether.

Any change in export or import regulations or legislation, shift or change in enforcement, or change in the countries, persons or technologies targeted by these regulations, could result in decreased use of our products by, or in our decreased ability to export or sell our products to, existing or potential customers with international operations.

15 unchanged sentences

and international laws and regulations, including oversight by various regulatory or other governmental bodies.

Many foreign countries and governmental bodies, including the European Union and other relevant jurisdictions where we conduct business, have laws and regulations concerning the collection and use of PII and other data obtained from their residents or by businesses operating within their jurisdictions that are currently more restrictive than those in the U.S.

Many foreign countries and governmental bodies, including China, the European Union and other relevant jurisdictions where we conduct business, have laws and regulations concerning the collection and use of PII and other data obtained from their residents or by businesses operating within their jurisdictions that are currently more restrictive than those in the U.S.

For example, effective May 2018, the European Union adopted the General Data Protection Regulation that imposed more stringent data protection requirements and provided for greater penalties for noncompliance.

1 unchanged sentence

The CCPA gives California residents the right to access, delete and opt out of certain sharing of their information, and imposes penalties for failure to comply.

In 2021, the National People’s Congress passed the Data Security Law of the People’s Republic of China (Data Security Law).

The Data Security Law is the first comprehensive data security legislation in China and aims to regulate a wide range of issues in relation to the collection, storage, processing, use, provision, transaction and publication of any kind of data.

Given its recent passage, there is significant uncertainty in how regulators will interpret and enforce the law, but it contains provisions that allow substantial government oversight and include fines for failure to obtain required approval from China’s cyber and data protection regulators for cross-border personal information-related data transfers.

Any inability, or perceived inability, to adequately address privacy and data protection concerns, even if unfounded, or to comply with applicable laws, regulations, policies, industry standards, contractual obligations or other legal obligations, could result in additional cost and liability to us, damage our reputation and adversely affect our business.

177 unchanged sentences

Sales of a substantial number of our ordinary shares in the public market, or the perception that these sales might occur, could cause the market price of our ordinary shares to decline.

We filed registration statements on Form S-8 under the Securities Act to register shares for issuance under our 2004 Stock Plan, 2012 Equity Incentive Plan and the Amended and Restated 2012 Employee Stock Purchase Plan.

Our 2012 Equity Incentive Plan and the Amended and Restated 2012 Employee Stock Purchase Plan provide for automatic increases in the shares reserved for issuance under these plans which could result in additional dilution to our shareholders.

In the past, we have issued stock options to employees and we regularly issue restricted stock units (RSUs) to employees, which settle as ordinary shares upon vesting.

These shares can be freely sold in the public market upon issuance and vesting, subject to restrictions provided under the terms of the applicable plan and/or the option agreements entered into with option holders.

51 unchanged sentences

EXHIBIT INDEX

Agreement and Plan of Merger, dated October 26, 2021, by and among Ambarella, Inc., Ohio Merger Sub, Inc., Oculii Corp.

and Shareholder Representative Services LLC.

Amended and Restated Memorandum of Association and Second Amended and Restated Articles of Association of the Registrant.

Employment letter entered into by Ambarella Corp.

with Brian White, dated March 18, 2022.

Change of Control and Severance Agreement entered into by Ambarella Corp.

with Brian White, dated March 28, 2022.

Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.

7 unchanged sentences

Inline XBRL Taxonomy Presentation Linkbase Document

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2021, has been formatted in Inline XBRL and included in Exhibit 101.

Incorporated by reference to the Registrant’s current report on Form 8-K as filed with the Securities and Exchange Commission on October 26, 2021.

The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2022, has been formatted in Inline XBRL and included in Exhibit 101.

Incorporated by reference to the Registrant’s registration statement on Form S-1 (No.

1 unchanged sentence

3 as filed with the Securities and Exchange Commission on September 12, 2012.

M anagement contracts or compensation plans or arrangements in which directors or executive officers are eligible to participate.

In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No.

4 unchanged sentences

AMBARELLA, INC.

December 10, 2021

/s/ Feng-Ming Wang

1 unchanged sentence

President and Chief Executive Officer

December 10, 2021

/s/ John Young

Vice President, Finance

Chief Financial Officer

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-Q

Item 1A. Risk Factors