What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-08-30 compared with 2022-09-14 · 435 added, 379 removed, 758 unchanged (52% of the section changed)

1 unchanged sentence

Index to Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Report of Independent Registered Public Accounting Firm s (PCAOB ID:

Consolidated Statements of Operations

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

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Commitments and Contingencies

Note 13 Subsequent Event

Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors

Aviat Networks, Inc.

Austin, Texas

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Aviat Networks, Inc.

(the “Company”) as of July 1, 2022 and July 2, 2021, the related consolidated statements of operations, comprehensive (loss) income, equity, and cash flows for each of the three fiscal years in the period ended July 1, 2022, the related notes and the financial statement schedule - Valuation and Qualifying Accounts (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at July 1, 2022 and July 2, 2021, and the results of its operations and its cash flows for each of the three fiscal years in the period ended July 1, 2022, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of July 1, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated September 14, 2022 expressed an unqualified opinion thereon.

To the shareholders and the Board of Directors of Aviat Networks, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Aviat Networks, Inc.

and subsidiaries (the "Company") as of June 30, 2023, the related consolidated statements of operations, comprehensive income, cash flows, and equity, for the fiscal year ended June 30, 2023, the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023, and the results of its operations and its cash flows for the fiscal year ended June 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 30, 2023 expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Estimated Costs to Complete

As described in Note 3 to the consolidated financial statements, revenues from network planning and design, engineering and installation-related services are recognized based on an overtime recognition model using the cost-input method.

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition — Service Revenues - Estimated Costs to Complete - Refer to Note 3 to the financial statements

Critical Audit Matter Description

The Company recognizes revenue from two primary sources:

products and services.

Revenues from services include revenues from network planning and design, engineering and installation-related services and are recognized based on an over-time recognition model using the cost-input method.

Judgment is required when estimating total contract costs and progress to completion on the over-time arrangements.

The cost estimation process for these contracts is based on the knowledge and experience of the Company’s project managers, engineers, and financial professionals.

Changes in job performance and job conditions are factors that influence estimates of the total costs to complete those contracts and the Company’s revenue recognition.

We identified estimated costs to complete for open and ongoing over-time revenue contracts at year end as a critical audit matter.

We identified estimated costs to complete for open over-time revenue contracts at year end as a critical audit matter.

The determination of the total estimated cost and progress toward completion requires management to make significant estimates and assumptions.

Changes in these estimates or timing of when the costs occur can have a significant impact on the revenue recognized each period.

Changes in these estimates or timing of when the costs occur can have a significant impact

on the revenue recognized each period.

Auditing these elements involved especially challenging and subjective auditor judgment in evaluating the reasonableness of management’s assumptions and estimates over the duration of these contracts.

The primary procedures we performed to address this critical audit matter included:

Testing the design and operating effectiveness of certain controls related to estimated costs to complete, including controls over management’s review of cost estimates.

Evaluating the reasonableness of a sample of project budgets for projects completed during the year through a retrospective review against actual performance at project completion.

Assessing the reasonableness of the estimated costs to complete for a sample of open projects through:

(i) evaluating the reasonableness of project budgets and the nature of costs required to complete open projects, (ii) assessing the status of completion of respective projects through testing of a sample of project costs incurred to date, (iii) evaluating the reasonableness of project status by performing inquiries of project managers and assessing the nature of activities required to complete open projects, and (iv) performing retrospective review on closed projects and investigating budget to actual variances (if any).

Assessing the reasonableness of project margins and changes in estimated costs to complete and investigating reasons for changes.

/s/ BDO USA, LLP

We have served as the Company's auditor since 2015.

San Jose, California

September 14, 2022

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates of costs to complete for open over-time revenue contracts used to recognize service revenues included the following, among others:

• We tested the effectiveness of controls related to estimated costs to complete, including controls over management’s review of cost estimates.

• We selected a sample of revenue contracts and performed the following:

◦ Tested the accuracy and completeness of the costs incurred to date

◦ Evaluated the estimates of cost to complete for a sample of open over-time contracts by:

▪ Comparing costs incurred to date to the costs management estimated to be incurred to date

▪ Evaluating the progress to completion by performing inquiries of project managers and assessing the nature of activities required to complete

▪ Comparing management’s estimates of gross margin for the selected contracts to the gross margin of similar contracts, when applicable

◦ Tested the mathematical accuracy of management’s calculation of revenue for the contract

• We developed an expectation of service revenue by creating an independent estimate of gross margin based on historical margin rates and compared it to the recorded service revenue

• We performed a lookback to evaluate management’s ability to estimate costs accurately by making a selection of changes in estimates during the year and testing whether the change in estimate was properly supported and recorded within the correct period

/s/ Deloitte & Touche LLP

Austin, Texas

August 30, 2023

We have served as the Company's auditor since fiscal year 2023.

Report of Independent Registered Public Accounting Firm

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Austin, Texas

Opinion on Internal Control over Financial Reporting

We have audited Aviat Networks, Inc.’s (the “Company’s”) internal control over financial reporting as of July 1, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 14, 2022, based on the COSO criteria .

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of July 1, 2022 and July 2, 2021, the related consolidated statements of operations, comprehensive (loss) income, equity, and cash flows for each of the three fiscal years in the period ended July 1, 2022, the related notes and the financial statement schedule - Valuation and Qualifying Accounts and our report dated September 14, 2022 expressed an unqualified opinion thereon.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Aviat Networks, Inc.

(the “Company”) as of July 1, 2022, the related consolidated statements of operations, comprehensive (loss) income, equity, and cash flows for each of the two fiscal years in the period ended July 1, 2022, the related notes and the financial statement schedule - Valuation and Qualifying Accounts (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at July 1, 2022, and the results of its operations and its cash flows for each of the two fiscal years in the period ended July 1, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We conducted our audits in accordance with the standards of the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, LLP

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September 14, 2022

We served as the Company's auditor from 2015 to 2022.

AVIAT NETWORKS, INC.

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Fiscal Year Ended

(In thousands, except per share amounts) July 1,

Revenue from product sales $ 208,100 $ 185,787 $ 153,793

Revenue from services 94,859 89,124 84,849

(In thousands, except per share amounts) June 30,

2023 July 1, 2022 July 2, 2021

Product sales $ 239,321 $ 208,100 $ 185,787

Services 107,272 94,859 89,124

Total revenues 346,593 302,959 274,911

Cost of revenues:

Cost of product sales 132,404 113,055 95,321

Cost of services 61,320 59,241 58,625

Product sales 151,008 132,404 113,055

Services 71,414 61,320 59,241

Total cost of revenues 222,422 193,724 172,296

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Operating expenses:

Research and development expenses 22,596 21,810 19,284

Selling and administrative expenses 57,656 56,324 57,985

Research and development 24,908 22,596 21,810

Selling and administrative 69,842 57,656 56,324

Restructuring charges 3,012 238 2,271

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Operating income 26,409 28,745 22,210

Other income, net 1,690 230 331

Other (expense) income, net ( 3,306 ) 1,690 230

Income before income taxes 23,103 30,435 22,440

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Net income $ 11,528 $ 21,160 $ 110,139

Net income attributable to Aviat Networks $ 11,528 $ 21,160 $ 110,139

Net income per share:

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AVIAT NETWORKS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Fiscal Year Ended

(In thousands) July 1,

(In thousands) June 30,

2023 July 1, 2022 July 2, 2021

Net income $ 11,528 $ 21,160 $ 110,139

Other comprehensive (loss) income:

Net change in cumulative translation adjustment, net of tax ( 1,702 ) 642 ( 2,233 )

Other comprehensive (loss) income ( 1,702 ) 642 ( 2,233 )

Comprehensive income (loss) $ 19,458 $ 110,781 $ ( 1,976 )

Other comprehensive income (loss):

Net change in cumulative translation adjustment 25 ( 1,702 ) 642

Other comprehensive income (loss) 25 ( 1,702 ) 642

Comprehensive income $ 11,553 $ 19,458 $ 110,781

See accompanying Notes to Consolidated Financial Statements

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CONSOLIDATED BALANCE SHEETS

(In thousands, except share and par value amounts) July 1, 2022 July 2, 2021

(In thousands, except share and par value amounts) June 30, 2023 July 1, 2022

Current Assets:

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Inventories 33,057 27,169

Customer service inventories 1,775 1,431

Asset held for sale — 2,218

Other current assets 22,162 12,437

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Property, plant and equipment, net 9,452 8,887

Goodwill 5,112 —

Intangible assets, net 9,046 —

Deferred income taxes 86,650 95,412

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Preferred stock, $ 0.01 par value;

50,000,000 shares authorized;

50.0 million shares authorized;

Common stock, $ 0.01 par value;

300,000,000 shares authorized;

11,160,160 and 11,153,445 shares issued and outstanding as of July 1, 2022 and July 2, 2021, respectively

Treasury stock 194,943 and 19,587 shares as of July 1, 2022 and July 2, 2021, respectively

300.0 million shares authorized;

11.5 million and 11.2 million shares issued and outstanding as of June 30, 2023 and July 1, 2022, respectively

Treasury stock 0.2 million and 0.2 million shares as of June 30, 2023 and July 1, 2022, respectively

( 6,147 ) ( 6,147 )

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Fiscal Year Ended

(In thousands) July 1,

(In thousands) June 30,

2023 July 1, 2022 July 2, 2021

Operating Activities

Net income $ 11,528 $ 21,160 $ 110,139

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization of property, plant and equipment 4,463 5,383 4,387

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation of property, plant and equipment 5,475 4,463 5,383

Amortization of intangible assets 704 — —

Provision for (recovery from) uncollectible receivables 467 ( 23 ) 171

Share-based compensation 6,720 3,834 2,921

Deferred tax assets, net 8,004 ( 90,599 ) ( 172 )

Deferred income taxes 9,442 8,004 ( 90,599 )

Charges for inventory and customer service inventory write-downs 2,138 1,735 1,452

Loss on disposition of property, plant and equipment, net 11 6 56

Noncash lease expense 639 1,057 ( 342 )

Net gain on marketable securities ( 2,614 ) — —

Gains on sale of assets held for sale ( 66 ) — —

Net loss (gain) on marketable securities 1,734 ( 2,614 ) —

Other non-cash operating activities, net 67 ( 55 ) 6

Changes in operating assets and liabilities:

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Inventories ( 4,521 ) ( 3,901 ) ( 11,091 )

Customer service inventories ( 1,393 ) ( 1,104 ) ( 1,023 )

Accounts payable 16,040 10,503 580

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Other assets and liabilities ( 15,423 ) ( 7,899 ) ( 997 )

Change in lease liabilities ( 1,067 ) — —

Net cash provided by operating activities 2,789 17,298 17,493

Net cash (used in) provided by operating activities ( 1,644 ) 2,789 17,298

Investing Activities

Payments for acquisition of property, plant and equipment ( 5,335 ) ( 1,792 ) ( 2,847 )

Purchase of marketable securities ( 8,279 ) — —

Purchases of marketable securities — ( 8,279 ) —

Proceeds from sale of marketable securities 9,157 — —

Proceeds from sale of asset held for sale — 2,284 —

Acquisition, net of cash acquired and purchases of intangible assets ( 15,769 ) — —

Net cash used in investing activities ( 11,947 ) ( 7,787 ) ( 2,847 )

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Repayments of borrowings ( 102,200 ) — ( 9,000 )

Payments for repurchase of common stock — — ( 1,772 )

Payments of deferred financing costs ( 753 ) — —

Payments for repurchase of common stock - treasury shares — ( 5,362 ) ( 787 )

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Fiscal Year Ended

(In thousands) July 1,

(In thousands) June 30,

2023 July 1, 2022 July 2, 2021

Non-cash investing activities:

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Cash paid for interest $ 880 $ — $ 4

Cash (received) paid for income taxes, net $ 1,241 $ ( 2,119 ) $ 1,057

Cash paid (received) for income taxes, net $ 1,613 $ 1,241 $ ( 2,119 )

See accompanying Notes to Consolidated Financial Statements

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Stockholders’

(In thousands, except share amounts) Shares $ Amount Shares $ Amount

Balance as of June 28, 2019 10,719,390 $ 108 — $ — $ 815,142 $ ( 730,998 ) $ ( 12,736 ) $ 71,516

(In thousands) Shares $ Amount Shares $ Amount

Balance as of July 3, 2020 10,801 $ 108 — $ — $ 814,283 $ ( 730,741 ) $ ( 14,969 ) $ 68,681

Net income — — — — — 110,139 — 110,139

Other comprehensive (loss), net of tax — — — — — — ( 2,233 ) ( 2,233 )

Other comprehensive (loss) income — — — — — — 642 642

Issuance of common stock under employee stock plans 394 4 — — 1,902 — — 1,906

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Net income — — — — — 21,160 — 21,160

Other comprehensive income, net of tax — — — — — — 642 642

Other comprehensive (loss) income — — — — — — ( 1,702 ) ( 1,702 )

Issuance of common stock under employee stock plans 198 2 — — 1,029 — — 1,031

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Net income — — — — — 11,528 — 11,528

Other comprehensive (loss), net of tax — — — — — — ( 1,702 ) ( 1,702 )

Other comprehensive (loss) income — — — — — — 25 25

Issuance of common stock under employee stock plans 396 3 — — 1,267 — — 1,270

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Share-based compensation — — — — 6,720 — — 6,720

Balance as of July 1, 2022 11,160,160 $ 112 194,943 $ ( 6,147 ) $ 823,259 $ ( 599,442 ) $ ( 16,029 ) $ 201,753

Balance as of June 30, 2023 11,518 $ 115 195 $ ( 6,147 ) $ 830,048 $ ( 587,914 ) $ ( 16,004 ) $ 220,098

See accompanying Notes to Consolidated Financial Statements

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The Company and Summary of Significant Accounting Policies

We design, manufacture and sell a range of wireless networking solutions and services to mobile and fixed telephone service providers, private network operators, government agencies, transportation and utility companies, public safety agencies and broadcast system operators across the globe.

Aviat Networks, Inc.

(“Aviat,” the “Company,” “we,” “us,” and “our”) designs, manufactures, and sells a range of wireless networking and access networking solutions and services to mobile and fixed telephone service providers, private network operators, government agencies, transportation and utility companies, public safety agencies and broadcast system operators across the globe.

Our products include broadband wireless access base stations and customer premises equipment for fixed and mobile, point-to-point digital microwave radio systems for access, backhaul, trunking and license-exempt applications, supporting new network deployments, network expansion, and capacity upgrades.

We were incorporated in Delaware in 2006 to combine the businesses of Harris Corporation’s Microwave Communications Division (“MCD”) and Stratex Networks, Inc.

Aviat was incorporated in Delaware in 2006 to combine the businesses of Harris Corporation’s Microwave Communications Division (“MCD”) and Stratex Networks, Inc.

On January 28, 2010, we changed our corporate name from Harris Stratex Networks, Inc.

to Aviat Networks, Inc.

(“the Company”, “Aviat Networks,” “Aviat”, “we,” “us,” and “our”) to more effectively reflect our business and communicate our brand identity to customers.

to more effectively reflect our business and communicate our brand identity to customers.

Additionally, the change of our corporate name was to comply with the termination of the Harris Corporation (“Harris”) trademark licensing agreement resulting from the spin-off by Harris of its interest in our stock to its stockholders in May 2009.

Basis of Presentation

The consolidated financial statements include the accounts of Aviat Networks and its wholly-owned and majority owned subsidiaries.

Significant intercompany transactions and accounts have been eliminated.

Our fiscal year ends on the Friday nearest June 30.

This was July 1, for fiscal 2022, July 2, for fiscal 2021 and July 3, for fiscal 2020.

Fiscal 2022 and 2021 presented 52 weeks while fiscal 2020 included 53 weeks .

The consolidated financial statements include the accounts of the Company and its wholly-owned and majority owned subsidiaries.

All intercompany transactions and accounts have been eliminated.

Certain amounts in the financial statements have been reclassified for comparative purposes to conform to the current period financial statement presentation.

Our fiscal year includes 52 or 53 weeks and ends on the Friday nearest June 30.

This was June 30, 2023 for fiscal 2023, July 1, 2022 for fiscal 2022 and July 2, 2021 for fiscal 2021.

Fiscal 2023, 2022 and 2021 includes 52 weeks.

In these notes to consolidated financial statements, we refer to our fiscal years as “fiscal 2023”, “fiscal 2022” and “fiscal 2021.”

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Changes in such estimates, based on more accurate information, or different assumptions or conditions, may affect amounts reported in future periods.

Such estimates affect significant items, including revenue recognition, provision for uncollectible receivables, inventory valuation, valuation allowances for deferred tax assets and uncertainties in income taxes.

Such estimates affect significant items, including revenue recognition, provision for uncollectible receivables, inventory valuation, goodwill and identified intangible assets in business combinations, valuation allowances for deferred tax assets and uncertainties in income taxes.

The actual results that we experience may differ materially from our estimates.

Cash, Cash Equivalents and Restricted Cash

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However, a substantial portion of the cash equivalents is invested in prime money market funds which are backed by the securities in the fund.

As of July 1, 2022 and July 2, 2021, all of our high-quality marketable debt securities were invested in prime money market funds.

As of June 30, 2023 and July 1, 2022, all of our high-quality marketable securities were invested in prime money market funds.

Cash and cash equivalents that are restricted as to withdrawal or usage under the terms of contractual agreements are recorded as restricted cash.

Our long-term restricted cash included the cash balance in our disability insurance voluntary plan account that cannot be used by us for any operating purposes other than to pay benefits to the insured employees and was recorded in other assets on our consolidated balance sheets and the corresponding liabilities were included in other long-term liabilities on our consolidated balance sheets.

Our restricted cash is included in other assets on our consolidated balance sheets and represents the cash balance on our disability insurance voluntary plan account that cannot be used by us for any operating purposes other than to pay benefits to the insured employees.

Balance Sheet Components for further information.

Significant Concentrations

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We record the financing charges on discounting these letters of credit as interest expense.

During fiscal 2022, Motorola accounted for 13 % of our total revenue.

During fiscal 2021 and 2020 there were no customers that accounted for more than 10% of our total revenue.

As of July 1, 2022 and July 2, 2021, MTN Group accounted for approximately 17 % and 14 %, respectively, of our accounts receivable.

Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash equivalents, marketable debt securities, trade accounts receivable and financial instruments used in foreign currency hedging activities.

During fiscal 2023 and 2021, no customer accounted for more than 10% of our total revenue.

During fiscal 2022 there was one customer that accounted for 13 % of our total revenue.

As of June 30, 2023 and July 1, 2022, a group of related entities accounted for approximately 14 % and 17 %, respectively, of our accounts receivable.

Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash equivalents, marketable securities, trade accounts receivable and financial instruments used in foreign currency hedging activities.

We invest our excess cash primarily in prime money market funds and certificates of deposit.

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The inability of a contract manufacturer or supplier to fulfill our supply requirements or changes in their financial or business condition could disrupt our ability to supply quality products to our customers, and thereby may have a material adverse effect on our business and operating results.

We have entered into agreements relating to our foreign currency contracts with Silicon Valley Bank, a multinational financial institution.

The amounts subject to credit risk arising from the possible inability of any such parties to meet the terms of their contracts are generally limited to the amounts, if any, by which such party’s obligations exceed our obligations to that party.

Inventories are valued at the lower of cost and net realizable value.

Inventories are valued at the lower of cost or net realizable value.

Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

Cost is determined using standard cost, which approximates actual cost on a weighted-average first-in-

first-out basis.

We regularly review inventory quantities on hand and record adjustments to reduce the cost of inventory for excess and obsolete inventory based primarily on our estimated forecast of product demand and production requirements.

Cost is determined using standard cost, which approximates actual cost on a weighted-average first-in-first-out basis.

requirements.

Inventory adjustments are measured as the difference between the cost of the inventory and net realizable value based upon assumptions about future demand and charged to the provision for inventory, which is a component of cost of sales.

At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Customer Service Inventories

Our customer service inventories are stated at the lower of cost and net realizable value.

We carry service parts because we generally provide product warranty for 12 to 36 months and earn revenue by providing enhanced and extended warranty and repair service during and beyond this warranty period.

Customer service inventories consist of both component parts, which are primarily used to repair defective units, and finished units, which are provided for customer use permanently or on a temporary basis while the defective unit is being repaired.

We carry customer service related inventories such as service parts because we generally provide product warranty for 12 to 36 months and earn revenue by providing enhanced and extended warranty and repair service during and beyond this warranty period.

Customer service related inventories consist of both component parts, which are primarily used to repair defective units, and finished units, which are provided for customer use permanently or on a temporary basis while the defective unit is being repaired.

We record adjustments to reduce the carrying value of customer service inventories to their net realizable value.

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Estimates of net realizable value involve significant estimates and judgments about the future, and revisions would be required if these factors differ from our estimates.

Balance Sheet Components for further information.

Property, Plant and Equipment

Property, plant and equipment are stated on the basis of cost less accumulated depreciation and amortization.

Property, plant and equipment are stated on the basis of cost less accumulated depreciation.

We capitalize costs of software, consulting services, hardware and other related costs incurred to purchase or develop internal-use software.

We expense costs incurred during preliminary project assessment, re-engineering, training and application maintenance.

Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the respective assets.

Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease term or the estimated useful life of the improvements.

Depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets.

Leasehold improvements are depreciated on the straight-line method over the shorter of the remaining lease term or the estimated useful life of the improvements.

The useful lives of the assets are generally as follows:

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Machinery and equipment 2 to 5 years

Expenditures for maintenance and repairs are charged to expense as incurred.

Expenditures for maintenance and repairs are charged to expense as incurred and are included in cost of revenues and selling and administrative expenses on our consolidated statements of operations.

Cost and accumulated depreciation of assets sold or retired are removed from the respective property accounts, and any gain or loss is reflected in the consolidated statements of operations.

Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

Business Combinations

The Company accounts for acquisitions as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”).

The assets and liabilities of acquired businesses are recorded at their estimated fair values at the date of acquisition.

The excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill.

Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and often involves the use of estimates and assumptions.

If our assumptions or estimates in the fair value calculation change based on information that becomes available during the one-year period from the acquisition date, we may record adjustments to the net assets acquired with a corresponding offset to goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

The Company accounts for goodwill as required by FASB ASC Topic 350, Intangibles - Goodwill and Other (“ASC 350”).

We test goodwill for impairment on an annual basis and when events occur that may suggest that the fair value of such assets cannot support the carrying value.

ASC 350 gives an entity the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary.

However, if an entity concludes otherwise, then the quantitative impairment test shall be used to identify the impairment and measure the amount of an impairment loss to be recognized (if applicable).

As of June 30, 2023, we had recorded goodwill in the amount of $ 5.1 million, related to the Redline acquisition completed in the first quarter of fiscal 2023.

We did not have any recorded goodwill as of July 1, 2022.

We test our goodwill for impairment on an annual basis on the first day of our fourth fiscal quarter.

We have determined that we have one reporting unit.

We performed a qualitative assessment in fiscal 2023.

This assessment considered changes in our projected future cash flows and discount rates, recent market transactions and overall macroeconomic conditions.

Based on this assessment, we concluded that it was more likely than not that the estimated fair value of our reporting unit was higher than its carrying value and that the performance of a quantitative impairment test was not required.

Segment and Geographic Information and Note 12.

Acquisitions for further information.

Valuation of Long-Lived Assets

The Company periodically reviews the carrying value of its long-lived assets, including finite-lived intangibles, and property, plant and equipment, whenever events or changes in circumstances indicate that the carrying value may not be recoverable or that the assigned useful lives may not longer be appropriate.

Impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets.

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Our estimate of future cash flows is based upon, among other things, certain assumptions about expected future operating performance, growth rates and other factors.

The actual cash flows realized from these assets may vary significantly from our estimates due to increased competition, changes in technology, fluctuations in demand, consolidation of our customers, reductions in average selling prices and other factors.

Assumptions underlying future cash flow estimates are therefore subject to significant risks and uncertainties.

The actual cash flows realized from these assets may vary significantly from our estimates.

There were no impairment losses recorded for fiscal 2023, 2022 or 2021.

The Company amortizes the cost of finite-lived intangible assets on a straight-line basis over their estimated useful lives, which approximates the pattern of economic benefit.

The useful lives of the finite-lived purchased intangible assets are as follows:

Customer relationships 14

Trade names 16

On product sales, we provide for future warranty costs upon product delivery.

The specific terms and conditions of those warranties vary depending upon the product sold and the country in which we do business.

In the case of

products sold by us, our warranties generally start from the delivery date and continue for one to three years , depending on the terms.

In the case of products sold by us, our warranties generally start from the delivery date and continue for one to three years , depending on the terms.

Many of our products are manufactured to customer specifications and their acceptance is based on meeting those specifications.

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We assess the adequacy of our recorded warranty liabilities every quarter and make adjustments to the liabilities as necessary.

Balance Sheet Components for further information.

We lease facilities under non-cancelable operating lease agreements.

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We determine if an arrangement contains a lease at inception.

These operating leases are included in Right of use assets (ROU assets) on our July 1, 2022 consolidated balance sheets and represent our right to use the underlying asset for the lease term.

Our obligation to make lease payments are included in "Short-term lease liabilities" and "Long-term lease liabilities" on our July 1, 2022 consolidated balance sheets.

These operating leases are included in right of use assets (ROU assets) on our June 30, 2023 consolidated balance sheets and represent our right to use the underlying asset for the lease term.

Our obligation to make lease payments are included in short-term lease liabilities and long-term lease liabilities on our June 30, 2023 consolidated balance sheets.

We have not entered into any financing leases during fiscal 2023.

Operating lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

As most of our leases do not provide an implicit rate, we used the incremental borrowing rate based on the remaining lease term at commencement date in determining the present value of future payments.

As most of our leases do not provide an implicit rate, we used

the incremental borrowing rate based on the remaining lease term at commencement date in determining the present value of future payments.

The operating lease ROU assets also include any lease payments made and exclude lease incentives and initial direct costs incurred.

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Foreign Currency Translation

The functional currency of our subsidiaries located in the United Kingdom, Singapore, Mexico, Algeria and New Zealand is the United States (“U.S.”) dollar.

The functional currency of our subsidiaries located in the United Kingdom, Singapore, Mexico, Algeria, Lebanon and New Zealand is the United States (“U.S.”) dollar.

Determination of the functional currency is dependent upon the economic environment in which an entity operates as well as the customers and suppliers the entity conducts business with.

Changes in facts and circumstances may occur which could lead to a change in the functional currency of that entity.

Accordingly, all of the monetary assets and liabilities of these subsidiaries are re-measured into U.S.

dollars at the current exchange rate as of the applicable balance sheet date, and all non-monetary assets and liabilities are re-measured at historical rates.

Income and expenses are re-measured at the average exchange rate prevailing during the period.

Gains and losses resulting from the re-measurement of these subsidiaries’ financial statements are included in the consolidated statements of operations.

Accordingly, all non-functional currency denominated monetary assets and liabilities of these subsidiaries are re-measured into U.S.

dollars at the current exchange rate as of the applicable balance sheet date.

Non-monetary assets and liabilities are measured at historical rates.

Our other international subsidiaries use their respective local currency as their functional currency.

Assets and liabilities of these subsidiaries are translated at the local current exchange rates in effect at the balance sheet date, and income and expense accounts are translated at the average exchange rates during the period.

Assets and liabilities of these subsidiaries are translated at the current exchange rates in effect at the balance sheet date, and income and expense accounts are translated at average exchange rates during the period.

The resulting translation adjustments are included in accumulated other comprehensive loss.

Gains and losses resulting from foreign exchange transactions and revaluation of monetary assets and liabilities in non-functional currencies are included in other income, net in the accompanying consolidated statements of operations, based on the nature of the transactions.

Net foreign exchange (loss) gains recorded in our consolidated statements of operations during fiscal 2022, 2021 and 2020 were $( 1.1 ) million, $( 1.0 ) million, and $ 0.4 million, respectively.

Gains and losses resulting from foreign exchange transactions and re-measurement of monetary assets and liabilities in non-functional currencies are included in other (expense) income, net in the accompanying consolidated statements of operations, based on the nature of the transactions.

Net foreign exchange (losses) gains recorded in our consolidated statements of operations during fiscal 2023, 2022 and 2021 were $( 1.0 ) million, $( 1.1 ) million, and $( 1.0 ) million, respectively.

Retirement Benefits

As of July 1, 2022, we provided retirement benefits to substantially all employees primarily through our defined contribution retirement plans.

As of June 30, 2023, we provided retirement benefits to substantially all employees primarily through our defined contribution retirement plans.

These plans have matching and savings elements.

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Retirement plan expense amounted to $ 2.1 million, $ 1.9 million and $ 1.8 million in fiscal 2023, 2022 and 2021, respectively.

Retirement plan expenses are included in cost of revenues, research and development, and selling and administrative expenses on our consolidated statements of operations.

Revenue Recognition

Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, we recognize revenue by applying the following five-step approach:

We recognize revenue by applying the following five-step approach:

(1) identification of the contract with a customer;

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and (5) recognition of revenue when, or as, we satisfy a performance obligation.

See Note 3 for additional discussion on revenue recognition.

Revenue Recognition for further information.

Cost of Product Sales and Services

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Share-Based Compensation

We estimate the grant date fair value of our share-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term.

The Company has a share-based compensation plan which includes non-qualified stock options, restricted stock units and performance share awards.

We estimate the grant date fair value of our share-based awards and amortize the fair value over the requisite service period or vesting term.

To estimate the fair value of our stock option awards, we use the Black-Scholes option pricing model.

The determination of the fair value of stock option awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables.

These variables include our expected stock price volatility over the expected term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends.

The determination of the fair value of stock option awards on the date of grant is affected by our stock price as well as assumptions regarding a number variables.

These variables include our expected stock price volatility over the expected term of the awards, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividend yield.

Due to the inherent limitations of option valuation models, including consideration of future events that are unpredictable and the estimation process utilized in determining the valuation of the share-based awards, the ultimate value realized by our employees may vary significantly from the amounts expensed in our financial statements.

For restricted stock awards and units and performance share awards and units, we measure the grant date fair value based upon the market price of our common stock on the date of the grant.

The fair value of each market-based stock unit with market conditions was estimated using the Monte-Carlo simulation model.

We elected to account for forfeitures as they occur.

For restricted stock awards and units, we measure the grant date fair value based upon the market price of our common stock on the date of the grant.

The fair value of each performance share award with market conditions is estimated using a Monte-Carlo simulation model on the date of the grant.

We account for forfeitures as they occur.

We generally recognize compensation cost for share-based payment awards on a straight-line basis over the requisite service period.

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The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

It is inherently difficult and subjective to estimate such

amounts, as this requires us to determine the probability of various possible outcomes.

It is inherently difficult and subjective to estimate such amounts, as this requires us to determine the probability of various possible outcomes.

We reevaluate these uncertain tax positions on a quarterly basis.

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Accounting Standards Adopted

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740).

This guidance simplifies the accounting for income taxes by removing certain exceptions to the general principles and also simplifies areas such as franchise taxes, step-up in tax basis of goodwill, separate entity financial statements and interim recognition of enactment of tax laws and rate changes.

ASU 2019-12 became effective for us in our first quarter of fiscal 2022.

The adoption had no material impact on our unaudited condensed consolidated financial statements.

Accounting Standards Not Yet Adopted

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848).

This guidance provides optional guidance related to reference rate reform, which provides practical expedients for contract modifications and certain hedging relationships associated with the transition from reference rates that are expected to be discontinued.

This guidance is applicable for our borrowing instruments, which use LIBOR as a reference rate, and will be effective through December 31, 2022.

We are currently evaluating the potential impact of ASU 2020-04 will have on our consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

In June 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (ASU 2016-13) and also issued subsequent amendments to the initial guidance:

ASU 2018-19, ASU 2019-04, and ASU 2019-05 (collectively, Topic 326).

ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2022-02 (collectively, “Topic 326”).

Topic 326 requires measurement and recognition of expected credit losses for financial assets held.

Topic 326 will be effective for us in our first quarter of fiscal 2023, and earlier adoption is permitted.

We are evaluating the impact adopting Topic 326 will have on our consolidated financial statements.

Topic 326 became effective for our first quarter of fiscal 2023.

The adoption had no material impact on the Company’s consolidated financial statements.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination.

ASU 2021-08 became effective for our first quarter of fiscal 2023.

The adoption had no material impact on the Company’s consolidated financial statements.

Accounting Standards Not Yet Adopted

The Company considers the applicability and impact of all ASUs issued by the FASB.

The Company determined at this time that all other ASUs issued but not yet adopted are either not applicable or are expected to have a minimal impact on its financial position and results of operations.

Net Income per Share of Common Stock

Net income per share is computed using the two-class method, by dividing net income attributable to us by the weighted average number of shares of our outstanding common stock and participating securities outstanding.

Net income per share is computed by dividing net income attributable to us by the weighted average number of shares of our outstanding common stock.

The following table presents the computation of basic and diluted net income per share attributable to our common stockholders:

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Diluted $ 0.97 $ 1.79 $ 9.42

The following table summarizes the weighted-average equity awards that were excluded from the diluted net income per share calculations since they were antidilutive:

The following table summarizes the weighted-average equity awards that were excluded from the diluted net income per share calculations since they were anti-dilutive:

(In thousands) 2023 2022 2021

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Product assembly, product testing, complete system integration, and system testing may either be performed within our own facilities or at the locations of our third-party manufacturers.

Revenue from services includes certain network planning and design, engineering, installation and commissioning (“field services”), extended warranty, customer support, consulting, training, and education.

Revenue from services includes certain network planning and design, engineering, installation and commissioning (“field services”), extended warranty, hosted software-as-a-service (“SaaS”), customer support, consulting, training, and

Maintenance and support services are generally offered to our customers and recognized over a specified period of time and from sales and subsequent renewals of maintenance and support contracts.

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Certain judgment is required when estimating total contract costs and progress to completion on the over-time arrangements, as well as whether a loss is expected to be incurred on the contract.

The cost estimation process for these

contracts is based on the knowledge and experience of the Company’s project managers, engineers, and financial professionals.

The cost estimation process for these contracts is based on the knowledge and experience of the Company’s project managers, engineers, and financial professionals.

Changes in job performance and job conditions are factors that influence estimates of the total costs to complete those contracts and the Company’s revenue recognition.

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Bill-and-Hold Sales

Certain customer arrangements consist of bill-and-hold characteristics under which transfer of control has been met (including the passing of title and significant risk and reward of ownership to the customers).

Therefore, the customers can direct the use of the bill-and-hold inventory while we retain physical possession of the product until it is installed at a customer site at a point in time in the future.

Certain customer arrangements consist of bill-and-hold characteristics under which control has been transferred to the customer, while we retain physical possession of the product.

We evaluate bill-and-hold arrangement criteria to determine when the customer has obtained control.

Once control has been obtained by the customer, they can direct or determine the use of the bill-and-hold inventory while we retain physical possession of the product until it is installed at a customer site at a point in time in the future.

Termination Rights

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We have assessed the treatment of costs to obtain or fulfill a contract with a customer.

Under ASC 606, we capitalize sales commissions related to multi-year service contracts, and amortize the asset over the period of benefit, which is the estimated service period.

We capitalize sales commissions related to multi-year service contracts, and amortize the asset over the period of benefit, which is the estimated service period.

Sales commissions paid on contract renewals, including service contract renewals, is commensurate with the sales commissions paid on the initial contracts.

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We elected the practical expedient to expense sales commissions as incurred when the amortization period of the related asset is one year or less.

These costs are recorded as sales and marketing expense and included in our consolidated balance sheet as accrued expenses until paid.

Our amortization expense was not material for the fiscal years ended July 1, 2022, July 2, 2021 and July 3, 2020.

These costs are recorded as selling and administrative expense and included in our consolidated balance sheet as accrued expenses until paid.

Our amortization expense was not material for the fiscal years ended June 30, 2023, July 1, 2022 and July 2, 2021.

Contract Balances, Performance Obligations, and Backlog

The following table provides information about receivables and liabilities from contracts with customers (in thousands):

July 1, 2022 July 2, 2021

June 30, 2023 July 1, 2022

Contract Assets

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Significant changes in contract balances may arise as a result of recognition over time for services, transfer of control for equipment, and periodic payments (both in arrears and in advance).

The Contract Asset balance has continued to grow as we continue to execute on large North American over time projects and International projects that carry notably longer payment terms.

The contract balances have continued to grow as we continue to execute on large North American over time projects and International projects that carry notably longer payment terms.

From time to time, we may experience unforeseen events that could result in a change to the scope or price associated with an arrangement.

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however, this will have no impact on our future obligation to bill and collect.

As of July 1, 2022, we had $ 42.7 million in advance payments and unearned revenue and long-term unearned revenue, of which approximately 60 % is expected to be recognized as revenue in fiscal 2023 and the remainder thereafter.

During fiscal years 2022 and 2021, we recognized approximately $ 23.3 million and $ 21.9 million respectively, that was included in advance payments and unearned revenue at the beginning of each reporting period.

As of June 30, 2023, we had $ 51.7 million in advance payments and unearned revenue and long-term unearned revenue, of which approximately 72 % is expected to be recognized as revenue in fiscal 2024 and the remainder thereafter.

During fiscal 2023 and 2022, we recognized approximately $ 47.2 million and $ 23.3 million respectively, that was included in advance payments and unearned revenue at the beginning of each reporting period.

Remaining Performance Obligations

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As our product purchase orders are generally delivered within one year or less and our maintenance and support service contracts can be terminated without substantive termination penalties resulting in contracts with less than one year of duration, these performance obligations have been excluded from the remaining performance obligation amounts.

The aggregate amount of transaction price allocated to the remaining unsatisfied performance obligations (or partially unsatisfied) was approximately $ 97.0 million at July 1, 2022 relating to our long-term field service projects.

The aggregate amount of transaction price allocated to the remaining unsatisfied performance obligations (or partially unsatisfied) was approximately $ 151.8 million at June 30, 2023 relating to our long-term field service projects.

Of this amount, we expect to recognize approximately 70 % as revenue during fiscal 2024, with the remaining amount to be recognized as revenue beyond 12 months.

We lease facilities under non-cancelable operating lease agreements.

These leases have original terms that range from one to 20 years and may contain leasehold improvement incentives, rent holidays and escalation clauses.

In addition, some of these leases have renewal options for up to 3 years.

We lease office space in Austin, Texas as our corporate headquarters with an original term of 36 months.

We determine if an arrangement contains a lease at inception.

These operating leases are included in "Right of use assets" (ROU assets) on our July 1, 2022 consolidated balance sheet and represent our right to use the underlying asset for the lease term.

Our obligation to make lease payments are included in "Short-term lease liabilities" and "Long-term lease liabilities" on our July 1, 2022 consolidated balance sheet.

We have not entered into any financing leases during fiscal 2022.

Operating lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

The operating lease ROU assets also include any lease payments made and exclude lease incentives and initial direct costs incurred.

Variable lease payments are expensed as incurred and are not included within the ROU asset and lease liability calculation.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Certain of our lease arrangements include non-lease components and we account for non-lease components together with lease components for all such lease arrangements.

Leases with an initial term of 12 months or less are not recorded on our consolidated balance sheets.

We recognize lease expense for these leases on a straight-line basis over the lease term.

As of June 30, 2023, total ROU assets were approximately $ 2.6 million, and short-term lease liabilities and long-term lease liabilities were approximately $ 0.6 million and $ 2.1 million, respectively.

Cash paid for lease liabilities was $ 0.9 million for fiscal 2023.

As of July 1, 2022, total ROU assets were approximately $ 2.8 million, and short-term lease liabilities and long-term lease liabilities were approximately $ 0.5 million and $ 2.4 million, respectively.

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Operating lease assets obtained in exchange for operating lease liabilities $ 95 $ 104

Rental expense for operating leases, including rentals on a month-to-month basis was $ 3.6 million for fiscal 2022 and $ 3.3 million for each of fiscal 2021 and 2020.

As of July 1, 2022, our future minimum lease payments under all non-cancelable operating leases with an initial term in excess of one year were as follows (in thousands):

Rental expense for operating leases, including rentals on a month-to-month basis was $ 3.4 million, $ 3.6 million, and $ 3.3 million for fiscal 2023, 2022 and 2021, respectively.

As of June 30, 2023, our future minimum lease payments under all non-cancelable operating leases with an initial term in excess of one year were as follows (in thousands):

Fiscal years Amount

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The following table provides a summary of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that reconciles to the corresponding amount in the consolidated statements of cash flows:

(In thousands) July 1, 2022 July 2, 2021

(In thousands) June 30, 2023 July 1, 2022

Cash and cash equivalents $ 22,242 $ 36,877

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Total cash, cash equivalents, and restricted cash $ 22,521 $ 37,104

Cash and cash equivalents includes $ 2.6 million of collateralized cash for certain commercial commitments as of June 30, 2023.

Accounts Receivable, net

Our net accounts receivable are summarized below:

(In thousands) July 1, 2022 July 2, 2021

(In thousands) June 30, 2023 July 1, 2022

Accounts receivable $ 102,372 $ 74,102

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Our inventories are summarized below:

(In thousands) July 1, 2022 July 2, 2021

(In thousands) June 30, 2023 July 1, 2022

Finished products $ 18,502 $ 14,916

Raw materials and supplies 12,794 10,478

Customer service inventories $ 1,761 $ 1,775

Total inventories $ 33,057 $ 27,169

Consigned inventories included within raw materials $ 11,224 $ 9,796

During fiscal 2022, 2021 and 2020, we recorded charges to adjust our inventory and customer service inventory due to excess and obsolete inventory resulting from lower sales forecasts, product transitioning or discontinuance.

Such charges incurred during fiscal 2022, 2021 and 2020 were classified in cost of product sales as follows:

During fiscal 2023, 2022 and 2021, we recorded charges to adjust our inventories due to excess and obsolete inventory resulting from lower sales forecasts, product transitioning or discontinuance.

Such charges incurred during

fiscal 2023, 2022 and 2021 were classified in cost of product sales as follows:

(In thousands) 2023 2022 2021

Excess and obsolete inventory charges (recovery) $ 647 $ 544 $ 233

Excess and obsolete inventory charges $ 1,109 $ 647 $ 544

Customer service inventory write-downs 1,029 1,088 908

Total charges $ 2,138 $ 1,735 $ 1,452

Assets Held for Sale

We consider properties to be Assets held for sale when management approves and commits to a plan to dispose of a property or group of properties.

The property held for sale prior to the sale date is separately presented on the balance sheet as Assets held for sale.

During the second quarter of fiscal 2021 management initiated the sale of our facility located in the United Kingdom.

We completed the sale during the third quarter of fiscal 2022 with proceeds of $ 2.3 million, reflecting a gain of $ 0.1 million.

We have no additional assets held for sale.

Other Current Assets

Our other current assets are summarized below:

(In thousands) June 30, 2023 July 1, 2022

Contract manufacturing assets $ 6,487 $ 1,621

Prepaids and other current assets 15,675 10,816

Total other current assets $ 22,162 $ 12,437

Property, Plant and Equipment, net

Our property, plant and equipment, net is summarized below:

(In thousands) July 1, 2022 July 2, 2021

(In thousands) June 30, 2023 July 1, 2022

Land $ 210 $ 210

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70,238 76,958

Less accumulated depreciation and amortization ( 68,071 ) ( 68,037 )

Less accumulated depreciation ( 60,786 ) ( 68,071 )

Total property, plant and equipment, net $ 9,452 $ 8,887

Included in the total plant, property and equipment above were $ 1.2 million and $ 0.3 million of assets in progress which have not been placed in service as of July 1, 2022 and July 2, 2021, respectively.

Depreciation and amortization expense related to property, plant and equipment, including amortization of internal use software was $ 4.5 million, $ 5.4 million and $ 4.4 million in fiscal 2022, 2021 and 2020, respectively.

Included in the total plant, property and equipment above were $ 0.4 million and $ 1.2 million of assets in progress which have not been placed in service as of June 30, 2023 and July 1, 2022, respectively.

Depreciation expense related to property, plant and equipment was $ 5.5 million, $ 4.5 million and $ 5.4 million in fiscal 2023, 2022 and 2021, respectively.

Accrued Expenses

Our accrued expenses are summarized below:

(In thousands) July 1, 2022 July 2, 2021

Accrued compensation and benefits $ 11,625 $ 13,455

Accrued agent commissions 1,864 2,348

Accrued warranties 2,913 3,228

(In thousands) June 30, 2023 July 1, 2022

Compensation and benefits $ 10,368 $ 11,625

Taxes 4,553 5,286

Professional fees 2,104 944

Warranties 2,100 2,913

Commissions 1,453 1,864

Other 3,864 3,819

$ 26,451 $ 28,154

Total accrued expenses $ 24,442 $ 26,451

We accrue for the estimated cost to repair or replace products under warranty.

Changes in our warranty liability, which is included as a component of accrued expenses in the consolidated balance sheets, were as follows:

Changes in our accrued warranty liability, were as follows:

(In thousands) 2023 2022 2021

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Warranty provision recorded during the period 768 1,328 1,679

Acquisition 55 — —

Consumption during the period ( 1,636 ) ( 1,643 ) ( 1,647 )

Balance as of the end of the period $ 2,913 $ 3,228 $ 3,196

Balance as of the end of the fiscal year $ 2,100 $ 2,913 $ 3,228

Advance payments and Unearned Revenue

Our advance payments and unearned revenue are summarized below:

(In thousands) July 1, 2022 July 2, 2021

(In thousands) June 30, 2023 July 1, 2022

Advance payments $ 1,607 $ 1,870

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• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts, estimated fair values and valuation input levels of our assets and liabilities that are measured at fair value on a recurring basis as of July 1, 2022 and July 2, 2021 were as follows:

July 1, 2022 July 2, 2021

The carrying amounts, estimated fair values and valuation input levels of our assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2023 and July 1, 2022 were as follows:

June 30, 2023 July 1, 2022

(In thousands) Carrying

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These marketable securities are publicly traded stock measured at fair value and classified within Level 1.

As of July 1, 2022, these money market funds were valued at $1.00 net asset value per share by these financial institutions.

As of June 30, 2023, these money market funds were valued at $ 1.00 net asset value per share by these financial institutions.

We classify items in Level 2 if the observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources are available with reasonable levels of price transparency.

Our bank certificates of deposit and foreign exchange forward contracts are classified within Level 2.

certificates of deposit and foreign exchange forward contracts are classified within Level 2.

The carrying value of bank certificates of deposit approximates their fair value.

Foreign currency forward contracts are measured at fair value using observable foreign currency exchange rates.

The assets and liabilities related to our foreign currency forward contracts were not material as of July 1, 2022 and July 2, 2021.

We did not have any foreign currency forward contracts outstanding as of June 30, 2023.

We did not have any recurring assets or liabilities that were valued using significant unobservable inputs.

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Credit Facility and Debt

On May 17, 2020, we entered into Amendment No.

4 to Third Amended and Restated Loan and Security Agreement with Silicon Valley Bank (the “SVB Credit Facility”) which extended the expiration date to June 28, 2024.

The SVB Credit Facility provides for a $ 25.0 million accounts receivable formula based revolving credit facility that can be borrowed by our U.S.

company, with a $ 25.0 million sublimit that can be borrowed by our U.S.

and Singapore entities.

Loans may be advanced under the SVB Credit Facility based on a borrowing base equal to a specified percentage of the value of eligible accounts of the borrowers under the SVB Credit Facility.

The borrowing base is subject to certain eligibility criteria.

Availability under the accounts receivable formula based revolving credit facility can also be utilized to issue letters of credit with a $ 12.0 million sub limit.

We may prepay loans under the SVB Credit Facility in whole or in part at any time without premium or penalty.

As of July 1, 2022, available credit under the SVB Credit Facility was $ 21.7 million reflecting the calculated borrowing base of $ 25.0 million less outstanding letters of credit of $ 3.3 million.

We did not borrow against the SVB Credit Facility during fiscal 2022 or 2021 and there was no borrowing outstanding as of July 1, 2022.

The SVB Credit Facility carries an interest rate, at our option, computed (i) at the prime rate reported in the Wall Street Journal plus a spread of 0.50 % to 1.50 %, with such spread determined based on our adjusted quick ratio;

or (ii) if we satisfy a minimum adjusted quick ratio, a LIBOR rate determined in accordance with the SVB Credit Facility, plus a spread of 2.75 %.

Any outstanding Singapore subsidiary borrowed loans shall bear interest at an additional 2.00 % above the applicable prime or LIBOR rate.

The SVB Credit Facility contains monthly and quarterly financial covenants including minimum adjusted quick ratio and minimum profitability (EBITDA) requirements.

In the event our adjusted quick ratio falls below a certain level, cash received in our accounts with Silicon Valley Bank may be directly applied to reduce outstanding obligations under the SVB Credit Facility.

The SVB Credit Facility also imposes certain restrictions on our ability to dispose of assets, permit a change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments and enter into transactions with affiliates under certain circumstances.

Certain of our assets, including accounts receivable, inventory, and equipment, are pledged as collateral for the SVB Credit Facility.

Upon an event of default, outstanding obligations would be immediately due and payable.

Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default at a per annum rate of interest equal to 5.00 % above the applicable interest rate.

As of July 1, 2022, we were in compliance with the quarterly financial covenants, as amended, contained in the SVB Credit Facility.

During fiscal 2022, we terminated an uncommitted short-term line of credit from a bank in New Zealand to support the operations of our subsidiary located there.

On May 9, 2023, we entered into a Secured Credit Facility Agreement (the “Credit Facility” or “Credit Agreement”) with Wells Fargo Bank, National Association, as administrative agent, swingline lender and issuing lender and Wells Fargo Securities LLC, Citigroup Global Markets Inc., and Regions Capital Markets as lenders.

The Credit Facility provides for a $ 40.0 million revolving credit facility (the “Revolver”) and a $ 50.0 million Delayed Draw Term Loan Facility (the “Term Loan”) with a maturity date of May 8, 2028.

The $ 40.0 million Revolver can be borrowed with a $ 10.0 million sublimit for letters of credit, and a $ 10.0 million swingline loan sublimit.

The Term Loan has a funding date on or prior to the closing date of the previously announced NEC Transaction with the proceeds used to settle the cash portion of the consideration and related expense.

Acquisitions for further information.

As of June 30, 2023, available credit under the Revolver was $ 40.0 million.

Available credit under the Term Loan was $ 50.0 million.

We borrowed $ 36.5 million and repaid $ 36.5 million against the Revolver during fiscal 2023.

As of June 30, 2023 there was no borrowing outstanding for either the Revolver or Term Loan.

Deferred financing costs of $ 0.8 million were paid in association with entering into the Credit Facility.

Outstanding borrowings under the Credit Facility bear interest at either:

(a) Adjusted Term Secured Overnight Financing Rate (“SOFR”) plus the applicable margin;

or (b) the Base Rate plus the applicable margin.

The pricing levels for interest rate margins are determined based on the Consolidated Total Leverage Ratio as determined and adjusted quarterly.

The Credit Facility requires the Company and its subsidiaries to maintain a fixed charge coverage ratio to be greater than 1.25 to 1.00 as of the last day of any fiscal quarter of the Company.

The Credit Facility also requires that the Company maintain a maximum leverage ratio of 3.00 times EBITDA, with a step-down to 2.75 times EBITDA after four full quarters, and 2.50 times EBITDA after eight full quarters.

The Credit Facility contains customary affirmative and negative covenants, including, among others, covenants limiting the ability of the Company and its subsidiaries to dispose of assets, permit a change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments, and enter into transactions with affiliates, in each case subject to customary exceptions.

As of June 30, 2023, we were in compliance with all financial covenants contained in the Credit Agreement.

On May 9, 2023, the Company and Silicon Valley Bank (“SVB”) terminated the Third Amended and Restated Loan and Security Agreement dated June 29, 2018, and as amended May 17, 2021 (the “SVB Credit Facility”), by and between the Company, as borrower, and SVB, as lender.

We borrowed $ 65.7 million and repaid $ 65.7 million against the SVB Credit Facility during fiscal 2023.

As of June 30, 2023, we had $ 2.6 million of collateralized cash on deposit with SVB associated with certain commercial commitments.

During fiscal 2023, the weighted-average interest rate under our available credit facilities was 7.6 %.

Restructuring Activities

The following table summarizes our restructuring related activities during fiscal year 2022, 2021 and 2020:

(In thousands) Severance and Benefits Facilities and Other

Q4 2022 Plan Fiscal 2021 Plan Prior Years Plans Prior Years Plans Total

Balance as of June 28, 2019 $ — $ — $ 1,089 $ 238 $ 1,327

The following table summarizes our restructuring related activities during fiscal 2023, 2022 and 2021:

(In thousands) Employee Severance and Benefits Facilities and Other

Fiscal 2023 Plans Prior Years Plans Prior Years Plans Total

Balance as of July 3, 2020 $ — $ 2,502 $ 236 $ 2,738

Charges, net — 2,271 — 2,271

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Balance as of July 2, 2021 — 2,489 248 2,737

Charges, net — 2,414 ( 143 ) — 2,271

Charges (reversals), net — 474 ( 236 ) 238

Cash payments — ( 1,559 ) — ( 1,559 )

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Cash payments ( 2,347 ) ( 1,381 ) — ( 3,728 )

Foreign currency translation (gain) loss — ( 23 ) — ( 12 ) ( 35 )

Balance as of July 1, 2022 $ 295 $ 1,086 $ — $ — $ 1,381

As of July 1, 2022, the sum of the accrual balance of $ 1.4 million was in short-term restructuring liabilities on the consolidated balance sheets.

Included in the above plans for which we were carrying a provision were positions identified for termination that have not been executed from a restructuring perspective.

During the fourth quarter of Q4 2022, our Board of Directors approved a restructuring plan (the “Q4 2022 Plan”) to restructure specific groups to optimize skill sets and align structure to execute on strategic deliverables.

The Q4 2022 Plan was anticipated to entail a reduction in force of approximately 11 employees to be implemented through early fiscal year 2023, with a certain number of positions being consolidated.

Fiscal 2021 Plan

During the third quarter of fiscal 2021, our Board of Directors approved restructuring plans (the “Fiscal 2021 Plan”) to continue to reduce our operating costs and improve profitability as part of our transformational initiative to optimize our business model and increase efficiencies.

We recorded restructuring charges of $ 2.4 million related to the Fiscal 2021 Plan in fiscal 2021.

The Fiscal 2021 Plan was anticipated to entail a reduction in force of approximately 30 employees to be implemented through the end of fiscal year 2022, with a certain number of positions being consolidated and/or relocated.

During the fourth quarter of fiscal 2020, our Board of Directors approved a restructuring plan (the “Q4 2020 Plan”) to continue to reduce our operating costs and improve profitability to optimize our business model and increase efficiencies.

Payments related to the accrued restructuring liability balance for this plan was completed in the second quarter of fiscal 2022.

Prior Years’ Plan

Activities under the Fiscal 2015-2016 Plan primarily included reductions in workforce across the Company, but primarily in operations outside the United States.

Payments related to the accrued restructuring liability balance for this plan are complete.

Balance as of June 30, 2023 $ 600 $ — $ — $ 600

As of June 30, 2023, the accrued restructuring balance of $ 0.6 million was in restructuring liabilities on the consolidated balance sheets.

Included in the above were positions identified for termination that have not been executed from a restructuring perspective.

Fiscal 2023 Plans

During fiscal 2023, our Board of Directors approved restructuring plans, primarily associated with the acquisition of Redline and reductions in workforce in our operations outside the United States.

The fiscal 2023 plans are expected to be completed through the end of first half of fiscal 2024.

Prior Years’ Plans

Activities under the prior years’ plans primarily included reductions in workforce across the Company, primarily in our operations outside the United States.

Payments related to the accrued restructuring balance for these plans are complete.

Stockholders’ Equity

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In November 2021, our Board of Directors approved a stock repurchase program to purchase up to $ 10.0 million of our common stock.

During fiscal 2022, 2021 and 2020 we repurchased $ 5.4 million, $ 0.8 million and $ 1.8 million of our common stock in the open market respectively.

As of July 1, 2022, $ 7.3 million remained available for repurchase under our November 2021 stock repurchase program.

During fiscal 2023 we did no t repurchase any shares of our common stock.

In fiscal 2022 and 2021 we repurchased $ 5.4 million and $ 0.8 million, respectively.

As of June 30, 2023, $ 7.3 million remained available for repurchase.

The following table summarizes the repurchase of our common stock:

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Fiscal 2022 Treasury Shares 175,356 $ 30.57 $ 5,360

Fiscal 2020 256,046 $ 6.91 $ 1,769

Fiscal 2021 Treasury Shares 19,587 $ 40.16 $ 787

Starting in February 2021, repurchased shares were recorded as treasury stock and we do not anticipate retiring them.

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All repurchased shares prior to February 2021 were retired and reflected the two -for-one stock split.

As of July 1, 2022, $ 7.3 million remained available for repurchase under our November 2021 stock repurchase program.

Stock Incentive Programs

Stock Equity Plan

At July 1, 2022, we had one stock incentive plan for our employees and non-employee directors, the 2018 Incentive Plan (the “2018 Plan”).

The 2018 Plan was approved by the stockholders at the fiscal year 2017 Annual Stockholders’ Meeting and it added 500,000 shares to the equity pool of shares available to grant to employees and non-employee directors.

As of June 30, 2023, we had one stock incentive plan for our employees and non-employee directors, the 2018 Incentive Plan (the “2018 Plan”).

The 2018 Plan was approved by the Company’s stockholders in March 2018.

An increase of 1,250,000 shares available to grant to employees and non-employee directors was approved at the Annual Meeting of Stockholders in November 2021.

The 2018 Plan replaced the 2007 Plan as our primary long-term incentive program (“LTIP”).

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provided that, as shares are returned under the 2007 Plan upon cancellation, termination or otherwise of awards outstanding under the 2007 Plan, such shares will be available for grant under the 2018 Plan.

The 2018 Plan also provides for the issuance of share-based awards in the form of stock options, stock appreciation rights, restricted stock awards and units, and performance share awards and units.

The 2018 Plan provides for the issuance of share-based awards in the form of stock options, stock appreciation rights, restricted stock awards and units, and performance share awards and units.

Under the 2018 Plan, option exercise prices are equal to the fair market value of our common stock on the date the options are granted using our closing stock price.

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Restricted stock units issued to non-executive board members annually generally vest on the day before the annual stockholders’ meeting.

Vesting of performance share awards and units is subject to the achievement of predetermined financial performance criteria and continued employment through the end of the applicable period.

Market-based stock units vest upon meeting certain predetermined share price performance criteria and continued employment through the end of the applicable period.

Vesting of performance share awards and units is subject to the achievement of predetermined financial performance and share price criteria, and continued employment through the end of the applicable period.

We issue new shares of our common stock to our employees upon the exercise of stock options, vesting of restricted stock awards and units or vesting of performance share awards and units.

All awards that are canceled prior to vesting or expire unexercised are returned to the approved pool of reserved shares and made available for future grants under the 2018 Plan.

Shares of our common stock remaining available for future issuance under the 2018 Plan totaled 932,752 as of July 1, 2022.

Shares of our common stock remaining available for future issuance under the 2018 Plan totaled 1,822,810 as of June 30, 2023.

On March 3, 2020, our Board of Directors authorized and declared a dividend distribution of one right (a “Right”) for each outstanding share of our common stock, par value $ 0.01 per share, to our stockholders of record as of the close of business on March 3, 2020, (the “Record Date”).

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The Rights have a de minimis fair value.

The complete terms of the Rights are set forth in The Plan, dated as of March 3, 2020, and amended as of August 27, 2020, between the Company and Computershare Inc., as rights agent.

The complete terms of the Rights are set forth in the Amended and Restated Tax Benefit Preservation Plan (the “Plan”), dated as of August 27, 2020, and amended as of February 28, 2023, between the Company and Computershare Inc., as rights agent.

By adopting the Plan, we are helping to preserve the value of certain deferred tax benefits, including those generated by net operating losses (collectively, the “Tax Benefits”), which could be lost in the event of an “ownership change” as defined under Section 382 Code.

We submitted the Plan to a stockholder vote and our stockholders voted to approve the Plan at the 2020 Annual Meeting of Stockholders.

The amended Plan will be submitted to the Company’s stockholders for ratification at the Company’s 2023 annual meeting (the “Annual Meeting”), which extends the final expiration date of the Plan until March 3, 2026.

Also, on September 6, 2016, our Board of Directors adopted certain amendments to our Amended and Restated Certificate of Incorporation, as amended (the “Charter Amendments”) The Charter Amendments are designed to preserve the Tax Benefits by restricting certain transfers of our common stock.

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Under the Employee Stock Purchase Plan (“ESPP”), employees are entitled to purchase shares of our common stock at a 5 % discount from the fair market value at the end of a three-month purchase period.

As of July 1, 2022, 110,123 shares were reserved for future issuances under the ESPP.

We issued 1,254 shares under the ESPP during fiscal 2023.

The ESPP was terminated at the end of calendar year 2022 and the remaining shares reserved for future issuance expired.

Share-Based Compensation

Total following table presents the compensation expense for share-based awards included in our consolidated statements of operations for fiscal 2022, 2021 and 2020:

The following table presents the compensation expense for share-based awards included in our consolidated statements of operations for fiscal 2023, 2022 and 2021:

(In thousands) 2023 2022 2021

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Restricted stock awards and units 3,565 1,482 857

Performance share awards and units and market-based stock units 1,770 1,307 355

Performance share awards and units 1,761 1,770 1,307

Total share-based compensation expense $ 6,720 $ 3,834 $ 2,921

The following table summarizes the unamortized compensation expense and the remaining years over which such expense would be expected to be recognized, on a weighted-average basis, by type of award:

June 30, 2023

Unamortized Expense Weighted-Average Remaining Recognition Period

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Expired ( 1,190 ) $ 35.97

Options outstanding as of July 1, 2022 469,716 $ 15.15 4.68 $ 5,599

Options vested and expected to vest as of July 1, 2022 469,716 $ 15.15 4.68 $ 5,599

Options exercisable as of July 1, 2022 111,505 $ 9.97 3.3 $ 1,693

The aggregate intrinsic value represents the total pre-tax intrinsic value or the aggregate difference between the closing price of our common stock on July 1, 2022 of $ 25.09 , and the exercise price for in-the-money options that would have been received by the optionees if all options had been exercised on July 1, 2022.

Options outstanding as of June 30, 2023 414,092 $ 21.77 4.65 $ 4,911

Options vested and expected to vest as of June 30, 2023 414,092 $ 21.77 4.65 $ 4,911

Options exercisable as of June 30, 2023 188,254 $ 14.41 3.78 $ 3,607

The aggregate intrinsic value represents the total pre-tax intrinsic value or the aggregate difference between the closing price of our common stock on June 30, 2023 of $ 33.37 , and the exercise price for in-the-money options that would have been received by the optionees if all options had been exercised on June 30, 2023.

Additional information related to our stock options is summarized below:

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Fair value of options vested $ 1,142 $ 608 $ 484

The fair value of each option grant under our 2018 Stock Plan was estimated using the Black-Scholes option pricing model on the date of grant.

The fair value of each option grant under our 2018 Plan was estimated using the Black-Scholes option pricing model on the date of grant.

A summary of the significant weighted-average assumptions we used in the Black-Scholes valuation model is as follows:

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Expected term (in years) 3.0 3.0 3.0

The following summarizes all of our stock options outstanding and exercisable as of July 1, 2022:

The following summarizes all of our stock options outstanding and exercisable as of June 30, 2023:

Options Outstanding Options Exercisable

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414,092 4.65 $ 21.77 188,254 $ 14.41

$ 8.90 — $ 8.90 40,204 2.52 $ 8.90 40,204 $ 8.90

$ 11.00 — $ 11.00 150,956 5.06 $ 11.00 40,708 $ 11.00

$ 17.25 — $ 35.97 123,176 6.01 $ 32.32 5,373 $ 24.00

469,716 4.68 $ 15.15 111,505 $ 9.97

Restricted Stock Awards and Units

A summary of the status of our restricted stock as of July 1, 2022 and changes during fiscal 2022 is as follows:

A summary of the status of our restricted stock as of June 30, 2023 and changes during fiscal 2023 is as follows:

Shares Weighted-Average

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Forfeited ( 38,407 ) $ 29.32

Restricted stock outstanding as of July 1, 2022 383,257 $ 25.59

Restricted stock outstanding as of June 30, 2023 273,451 $ 28.16

The fair value of each restricted stock grant is based on the closing price of our common stock on the date of grant.

The total grant date fair value of restricted stock that vested during fiscal 2023, 2022 and 2021 was $ 3.4 million, $ 0.5 million and $ 0.5 million, respectively.

Market-Based Stock Units

A summary of the status of our market-based stock units as of July 1, 2022 and changes during fiscal 2022 is as follows:

Performance Share Awards and Units

A summary of the status of our performance shares as of June 30, 2023 and changes during fiscal 2023 is as follows:

Shares Weighted-Average

Market-based stock units outstanding as of July 2, 2021 165,000 $ 11.51

Performance shares outstanding as of July 1, 2022 225,103 $ 16.69

Granted 66,649 30.01

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Forfeited ( 12,350 ) 21.71

Market-based stock units outstanding as of July 1, 2022 208,059 $ 14.54

The fair value for each market-based stock units with market condition was estimated using the Monte-Carlo simulation model.

A summary of the significant weighted-average assumptions we used in the Monte-Carlo simulation model is as follows:

Performance shares outstanding as of June 30, 2023 180,054 $ 25.20

The fair value of performance shares was estimated using the Monte-Carlo simulation model.

A summary of the significant weighted-average assumptions is as follows:

Expected dividends — —

Expected volatility 63.7 % 62.2 % - 60.0 %

53.2 % - 48.9 %

Risk-free interest rate 3.5 % 0.45 % - 0.37 %

0.13 % - 0.19 %

Weighted-average grant date fair value per share granted $ 32.10 $ 35.56 - $ 31.38

Performance Share Awards and Units

A summary of the status of our performance shares awards and units as of July 1, 2022 and changes during fiscal 2022 is as follows:

Shares Weighted-Average

Performance share awards and units outstanding as of July 2, 2021 103,328 $ 14.58

Granted — $ —

Vested and released ( 45,938 ) $ 8.66

Forfeited/Cancelled ( 40,346 ) $ 9.38

Performance share awards and units outstanding as of July 1, 2022 17,044 $ 42.85

The total grant date fair value of performance share units that vested during fiscal 2023, 2022 and 2021 was $ 1.0 million, $ 0.4 million and $ 0.4 million, respectively.

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United States $ 198,435 57.3 %

Philippines 16,327 5.4 %

United States $ 198,824 65.6 %

United States $ 181,842 66.1 %

Philippines $ 12,550 5.3 %

Our long-lived assets, consisting primarily of net property, plant and equipment, by geographic areas based on the physical location of the assets as of July 1, 2022 and July 2, 2021 were as follows:

(In thousands) July 1, 2022 July 2, 2021

Our long-lived assets, consisting primarily of net property, plant and equipment, by geographic areas based on the physical location of the assets as of June 30, 2023 and July 1, 2022 were as follows:

(In thousands) June 30, 2023 July 1, 2022

New Zealand $ 3,619 $ 5,149

United States 5,048 2,972

Slovenia 433 1,122

Other countries 785 766

Total $ 9,452 $ 8,887

Income before provision for income taxes during fiscal year 2022, 2021 and 2020 consisted of the following:

Income (loss) before provision for (benefit from) income taxes during fiscal 2023, 2022 and 2021 consisted of the following:

(In thousands) 2023 2022 2021

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Total income before income taxes $ 23,103 $ 30,435 $ 22,440

Provision for (benefit from) income taxes for fiscal year 2022, 2021 and 2020 were summarized as follows:

Provision for (benefit from) income taxes for fiscal 2023, 2022 and 2021 were summarized as follows:

(In thousands) 2023 2022 2021

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Permanent differences 19 7 ( 346 )

Foreign income inclusions 397 — —

Effect of flow-through entities 409 58 101

Transaction costs 746 235 —

State and local taxes, net of U.S.

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Executive compensation limitation 663 439 —

Stock-based compensation excess tax benefits

Share-based compensation

( 728 ) ( 580 ) ( 482 )

Tax credit/deductions - generated and expired 113 108 99

Tax credit - generated and expired ( 140 ) 113 108

Foreign withholding taxes 88 267 1,184

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Return-to-provision/Deferred true-up adjustments 359 ( 269 ) —

Acquisition restructuring and integration 3,022 — —

Other ( 9 ) ( 176 ) 1,000

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$ 11,575 $ 9,275 $ ( 87,699 )

Our provision for (benefit from) income taxes was $ 9.3 million of expense for fiscal 2022, $ 87.7 million of benefit for fiscal 2021 and $ 3.5 million of expense for fiscal 2020.

Our provision for (benefit from) income taxes was $ 11.6 million of expense for fiscal 2023, $ 9.3 million of expense fiscal 2022 and $ 87.7 million of benefit for fiscal 2021.

Our tax expense for fiscal 2023 was primarily due to tax expense related to U.S.

and profitable foreign subsidiaries, including tax expense associated with our acquisition of Redline in July 2022 and subsequent restructuring and integration impact.

Acquisitions.

Our tax expense for fiscal 2022 was primarily due to tax expenses related to U.S.

and profitable foreign subsidiaries.

Our tax benefit for fiscal 2021 was primarily due to the release of $ 92.2 million in valuation allowance on our U.S.

federal and state deferred tax assets, offset by tax expenses related to profitable foreign subsidiaries and an increase in our reserve for uncertain tax positions.

The components of deferred tax assets and liabilities were as follows:

(In thousands) July 1, 2022 July 2, 2021

(In thousands) June 30, 2023 July 1, 2022

Deferred tax assets:

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Amortization 86 2,274

Stock compensation 807 552

Share-based compensation 858 807

Deferred revenue 3,678 1,913

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Other 144 2,888

Capitalized research expenses 5,119 —

Tax credit carryforwards 4,274 4,926

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Right of use assets 488 548

Other 227 650

Total deferred tax liabilities 1,325 2,322

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$ 86,158 $ 94,849

Our valuation allowance related to deferred income taxes, as reflected in our consolidated balance sheets, was $ 37.5 million as of July 1, 2022 and $ 37.4 million as of July 2, 2021.

The change in valuation allowance for the fiscal years ended July 1, 2022 and July 2, 2021 was an increase of $ 0.1 million and a decrease of $ 98.7 million, respectively.

The increase in the valuation allowance in fiscal 2022 was primarily due to losses in tax jurisdictions in which we cannot recognize tax benefits, partially offset by the release of certain U.S.

federal, state, and foreign valuation allowances.

Our valuation allowance related to deferred income taxes, as reflected in our consolidated balance sheets, was $ 37.0 million as of June 30, 2023 and $ 37.5 million as of July 1, 2022.

The change in valuation allowance for the fiscal years ended June 30, 2023 and July 1, 2022 was an decrease of $ 0.5 million and an increase of $ 0.1 million, respectively.

The decrease in the valuation allowance in fiscal 2023 was primarily due to the release of certain U.S.

federal, state, and foreign valuation allowances, partially offset by losses in tax jurisdictions in which we cannot recognize tax benefits.

During the third quarter of fiscal 2021, we recorded a valuation allowance release of $ 92.2 million as a discrete item based on management’s reassessment of the amount of its U.S.

federal and state deferred tax assets that are more likely than not to be realized, primarily as a result of increases in U.S.

profitability in the current period and expectations of continued profitability in future periods.

In performing our analysis, we used the most updated plans and estimates that we currently use to manage the underlying business and calculated the utilization of our deferred tax assets.

As of July 1, 2022, we continue to maintain a valuation allowance of $ 1.1 million on certain U.S.

The increase in the valuation allowance in fiscal 2022 was primarily due to losses in tax jurisdictions in which we cannot recognize tax benefits, partially offset by the release of certain U.S.

federal, state, and foreign valuation allowances.

As of June 30, 2023, we continue to maintain a valuation allowance of $ 1.2 million on certain U.S.

federal and state deferred tax assets that we believe is not more likely than not to be realized in future periods.

Tax loss and credit carryforwards as of July 1, 2022 have expiration dates ranging between one year and no expiration in certain instances.

Tax loss and credit carryforwards as of June 30, 2023 have expiration dates ranging between one year and no expiration in certain instances.

The amounts of U.S.

federal tax loss carryforwards as of July 1, 2022 was $ 358.9 million and begin to expire in fiscal 2023.

federal tax loss carryforwards as of June 30, 2023 was $ 303.5 million and begin to expire in fiscal 2024.

The amount of U.S.

federal and state tax credit carryforwards as of July 1, 2022 was $ 7.0 million, and certain credits began to expire in fiscal 2023.

The amount of foreign tax loss carryforwards as of July 1, 2022 was $ 188.0 million and certain losses began to expire in fiscal 2023.

The amount of foreign tax credit carryforwards as of July 1, 2022 was $ 2.8 million, and certain credits will begin to expire in fiscal 2026.

federal and state tax credit carryforwards as of June 30, 2023 was $ 6.9 million, and certain credits begin to expire in fiscal 2024.

The amount of foreign tax loss carryforwards as of June 30, 2023 was $ 186.0 million and certain losses begin to expire in fiscal 2024.

The amount of foreign tax credit carryforwards as of June 30, 2023 was $ 3.1 million, and certain credits will begin to expire in fiscal 2026.

We use the flow-through method to account for investment tax credits generated on eligible scientific research and development expenditures.

Under this method, the investment tax credits are recognized as a benefit to income tax in the year they are generated.

United States income taxes have not been provided on basis differences in foreign subsidiaries of $ 3.2 million as of July 1, 2022 because of our intention to reinvest these earnings indefinitely.

United States income taxes have not been provided on basis differences in foreign subsidiaries of $ 2.8 million as of June 30, 2023 because of our intention to reinvest these earnings indefinitely.

Additionally, no foreign withholding taxes, federal or state taxes have been provided if these unremitted earnings of the Company’s foreign subsidiaries were distributed, as such amounts are considered permanently reinvested.

It is not practicable to estimate the additional income taxes, including applicable foreign withholding taxes, that would be due upon the repatriation of these earnings.

As of July 1, 2022, we had unrecognized tax benefits of $ 17.7 million for various federal, foreign, and state income tax matters.

Unrecognized tax benefits increased by $ 0.4 million during fiscal 2022.

Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate was $ 9.7 million as of July 1, 2022.

As of June 30, 2023, we had unrecognized tax benefits of $ 16.1 million for various federal, foreign, and state income tax matters.

Unrecognized tax benefits decreased by $ 1.6 million during fiscal 2023.

Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate was $ 8.1 million as of June 30, 2023.

These unrecognized tax benefits are presented on the accompanying consolidated balance sheets net of the tax effects of net operating loss carryforwards.

We account for interest and penalties related to unrecognized tax benefits as part of our provision for income taxes.

The interest accrued was $ 0.7 million as of July 1, 2022.

As of July 2, 2021, an immaterial amount of penalties have been accrued.

The interest accrued was $ 0.7 million as of June 30, 2023.

As of June 30, 2023, an immaterial amount of penalties have been accrued.

Our unrecognized tax benefit activity for fiscal 2023, 2022 and 2021 was as follows:

(In thousands) Amount

Unrecognized tax benefit as of June 28, 2019 $ 12,987

Unrecognized tax benefit as of July 3, 2020 $ 18,047

Additions for tax positions in prior periods 184

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Decreases related to change of foreign exchange rate ( 1,953 )

Unrecognized tax benefit as of July 1, 2022 $ 17,707

There was no change in our unrecognized tax benefit for tax positions in prior periods for fiscal year 2022 related to settlements with tax authorities in the table above.

Our unrecognized tax benefit decreased for tax positions in prior periods by $ 0.9 million and $ 3.8 million for fiscal year 2021 and 2020, respectively, related to settlements with tax authorities in the table above.

Unrecognized tax benefit as of June 30, 2023 $ 16,086

There was an immaterial change in our unrecognized tax benefit for tax positions in prior periods for fiscal 2023 related to settlements with tax authorities in the table above.

Our unrecognized tax benefit decreased for tax positions in prior periods by $ 0.0 million and $ 0.9 million for fiscal 2022 and 2021, respectively, related to settlements with tax authorities in the table above.

We have a number of years with open tax audits which vary from jurisdiction to jurisdiction.

Our major tax jurisdictions that are open and subject to potential audits include the U.S., Singapore, Nigeria, and Saudi Arabia.

Our major tax jurisdictions that are open and subject to potential audits include the U.S., Singapore, Ghana, Kenya, Nigeria, Saudi Arabia and Tanzania.

The earliest years for these jurisdictions are as follows:

Singapore - 2015;

Ghana – 2016;

Kenya – 2018;

Nigeria – 2006;

and Saudi Arabia - 2019.

On December 27, 2020, the US enacted the Consolidated Appropriations Act of 2021 (CAA) which extended and expanded certain tax relief measures created by the CARES Act, including, but not limited to, (1) second round of Payroll Protection Program loans, and (2) the Employer Retention Credit for 2021.

Saudi Arabia – 2019 and Tanzania - 2017.

On March 11, 2021, the US enacted the American Rescue Plan Act of 2021 (“ARPA”) which expands Section 162(m) to cover the next five most highly compensated employees for the taxable year, in addition to the “covered employees” effective for taxable years beginning after December 31, 2026.

We continue to examine the elements of CAA and ARPA and the impact they may have on our future business.

We continue to examine the elements of the ARPA and the impact it may have on our future business.

On August 16, 2022, the U.S.

enacted the Inflation Reduction Act of 2022 (“IRA”) which includes a new corporate alternative minimum tax of 15% on adjusted financial statement income of corporations with profits greater than $1 billion, effective for taxable years beginning after December 31, 2022, and a 1% excise tax on stock repurchases

by public corporations after December 31, 2022.

We will continue to evaluate the applicability and effect of the IRA as more guidance is issued.

NEC’s Wireless Transport Business

On May 9, 2023, the Company entered into a Master Sale of Business Agreement (the “Purchase Agreement”), with NEC Corporation.

Pursuant to the Purchase Agreement, the Company will purchase certain assets and liabilities from NEC relating to NEC’s wireless backhaul business (the “NEC Transaction”).

Initial consideration due at the closing of the NEC Transaction will be comprised of (i) an amount in cash equal to $ 45.0 million, subject to certain post-closing adjustments, and (ii) the issuance of $ 25 million in Company common stock.

Aggregate consideration will be approximately $ 70 million.

The Company has obtained permanent financing to fund the cash portion of the NEC Transaction.

Credit Facility and Debt for further information.

The Purchase Agreement contains certain customary termination rights, including, among others, (i) the right of the Company or NEC to terminate if all the conditions to closing have not been either waived or satisfied on or before February 9, 2024 and (ii) there is a final non-appealable order of a government entity prohibiting the consummation of the NEC Transaction.

The NEC Transaction remains subject to, among other things, regulatory approvals and satisfaction of other customary closing conditions.

The Company expects to complete the NEC Transaction in the fourth quarter of calendar year 2023.

NEC is a leader in wireless backhaul networks with an extensive installed base of their Pasolink series products.

Redline Communications Group Inc.

On July 5, 2022, the Company acquired all of the issued and outstanding shares of Redline Communications Group Inc.

(“Redline”), for a purchase price of $ 20.4 million.

Redline is a leading provider of mission-critical data infrastructure.

Acquiring Redline allows Aviat to expand its Private Networks Offering with Private LTE/5G and Unlicensed Wireless Access Solutions, by creating an integrated end-to-end offering for wireless access and transport in the Private Networks segment, leveraging Aviat's sales channel to address a large dollar Private LTE/5G addressable market and increasing Aviat’s reach in mission-critical industrial Private Networks.

Cash acquired as part of the all-cash acquisition was $ 4.6 million for total net consideration of $ 15.8 million.

The acquisition was accounted for as a business combination using the acquisition method of accounting.

The assets acquired and the liabilities assumed have been recorded at their respective fair values as of the acquisition date.

The recognized goodwill is attributable to the workforce of the acquired business and expected synergies.

The goodwill from this acquisition is expected to be deductible for tax purposes.

Transaction costs related to the acquisition were expensed as incurred and are included in selling and administrative expenses in the consolidated statements of operations.

The preliminary purchase price allocation has been updated for certain measurement period adjustments based on the final valuation resulting in a $ 2.5 million increase in identifiable finite-lived intangible assets and a $ 2.6 million decrease in net tangible assets acquired.

These adjustments resulted in corresponding increase to goodwill.

The results of operations of Redline have been included in our consolidated financial statements since the date of acquisition.

The Company determined that the impact of this acquisition was not material to our consolidated financial statements;

therefore, revenue and earnings since the acquisition date and pro forma information are not required or presented.

A summary of the final purchase price allocation is as follows:

(In thousands)

Cash and cash equivalents $ 4,642

Accounts receivable, net 4,281

Inventories 3,379

Property, plant and equipment, net 688

Identifiable finite-lived intangible assets:

Customer relationships 7,730

Trade names 1,330

Other assets 1,921

Accounts payable ( 2,113 )

Advance payments and unearned revenue ( 3,301 )

Other liabilities ( 3,948 )

Goodwill 5,112

Total consideration $ 20,411

The following table presents details of the acquired identifiable finite-lived intangible assets:

Useful life in Years Gross Accumulated amortization Net

Identifiable intangible assets:

Patents 10 $ 690 $ ( 69 ) $ 621

Customer relationships 14 7,730 ( 552 ) 7,178

Trade names 16 1,330 ( 83 ) 1,247

Total identifiable intangible assets $ 9,750 $ ( 704 ) $ 9,046

Amortization of finite-lived intangibles is included in selling and administrative expenses.

As of June 30, 2023, the estimated future amortization expense of intangible assets with finite lives is as follows:

(In thousands)

Thereafter 5,526

Total $ 9,046

Commitments and Contingencies

Purchase Orders and Other Commitments

From time to time in the normal course of business, we may enter into purchasing agreements with our suppliers that require us to accept delivery of, and remit full payment for, finished products that we have ordered, finished products that we requested be held as safety stock, and work in process started on our behalf in the event we cancel or terminate the purchasing agreement.

products that we requested be held as safety stock, and work in process started on our behalf in the event we cancel or terminate the purchasing agreement.

Because these agreements do not specify fixed or minimum quantities, do not specify minimum or variable price provisions, and do not specify the approximate timing of the transaction, and we have no present intention to cancel or terminate any of these agreements, we currently do not believe that we have any future liability under these agreements.

As of July 1, 2022, we had outstanding purchase obligations and other commitments as follows:

As of June 30, 2023, we had outstanding purchase obligations and other commitments as follows:

Payments due by period

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The terms of the guarantees are generally equal to the remaining term of the related debt or other obligations and are generally limited to two years or less.

As of July 1, 2022, we had no guarantees applicable to our debt arrangements.

As of June 30, 2023, we had no guarantees applicable to our debt arrangements.

We have entered into commercial commitments in the normal course of business including surety bonds, standby letters of credit agreements and other arrangements with financial institutions primarily relating to the guarantee of future performance on certain contracts to provide products and services to customers.

As of July 1, 2022, we had commercial commitments of $ 65.4 million outstanding that were not recorded on our consolidated balance sheets.

As of June 30, 2023, we had commercial commitments of $ 61.0 million outstanding that were not recorded on our consolidated balance sheets.

Indemnifications

Under the terms of substantially all of our license agreements, we have agreed to defend and pay any final judgment against our customers arising from claims against such customers that our products infringe the intellectual property rights of a third party.

As of July 1, 2022, we have not received any notice that any customer is subject to an infringement claim arising from the use of our products;

As of June 30, 2023, we have not received any notice that any customer is subject to an infringement claim arising from the use of our products;

we have not received any request to defend any customers from infringement claims arising from the use of our products;

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Because the outcome of infringement disputes is related to the specific facts of each case and given the lack of previous or current indemnification claims, we cannot estimate the maximum amount of potential future payments, if any, related to our indemnification provisions.

As of July 1, 2022, we had not recorded any liabilities related to these indemnifications.

As of June 30, 2023, we had not recorded any liabilities related to these indemnifications.

Legal Proceedings

We are subject from time to time to disputes with customers concerning our products and services.

In May 2016, we received notification of a claim for damages from a customer alleging that certain of our products were defective which we settled for an immaterial amount during the third quarter of 2021.

In March 2016, an enforcement action by the Indian Department of Revenue, Ministry of Finance was brought against our subsidiary Aviat Networks (India) Private Limited (“Aviat India”) relating to the non-realization of intercompany receivables and non-payment of intercompany payables, which originated from 1999 to 2012, within the time frames dictated by the Indian regulations under the Foreign Exchange Management Act.

In November 2017, the Indian Department of Revenue, Ministry of Finance also initiated a similar action against Telsima Communications Private Limited (“Telsima India”), a subsidiary of the Company, relating to the non-realization of intercompany receivables and non-payment of intercompany payables which originated from the period prior to our acquisition of Telsima India in February 2009.

In September 2019, our directors of Aviat India appeared before the Ministry of Finance Enforcement Directorate.

No settlement offers were discussed at the meeting and the matter is still ongoing with no subsequent hearing date currently scheduled.

We have accrued an immaterial amount representing the estimated probable loss for which we would settle the matter.

We currently cannot form an estimate of the range of loss in excess of our amounts already accrued.

If the outcome of this matter is greater than the current immaterial amount accrued, we intend to dispute it vigorously.

From time to time, we may be involved in various other legal claims and litigation that arise in the normal course of our operations.

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Although there can be no assurances and the outcome of these matters is currently not determinable, we currently believe that none of these claims or proceedings are likely to have a material adverse effect on our financial position.

We expect to defend each of these disputes vigorously.

There are many uncertainties associated with any litigation and these actions or other third-party claims against us may cause us to incur costly litigation and/or substantial settlement charges.

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and (ii) the amount of the loss can be reasonably estimated.

Disclosure in the notes to the financial statements is required for loss contingencies that do not meet both those conditions if there is a reasonable possibility that a loss may have been incurred.

Disclosure in the notes to the financial statements is required for loss contingencies that do not meet both conditions if there is a reasonable possibility that a loss may have been incurred.

Gain contingencies are not recorded until realized.

We expense all legal costs incurred to resolve regulatory, legal and tax matters as incurred.

In September 2019, our directors of Aviat India appeared before the Ministry of Finance Enforcement Directorate.

No settlement offers were discussed at the meeting and the matter is still ongoing with no subsequent hearing date currently scheduled as of June 30, 2023.

We have accrued an immaterial amount representing the estimated probable loss for which we would settle the matter.

We currently cannot form an estimate of the range of loss in excess of our amounts already accrued.

If the outcome of this matter is greater than the current immaterial amount accrued, we intend to dispute it vigorously.

Periodically, we review the status of each significant matter to assess the potential financial exposure.

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Such revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position.

Subsequent Event

On April 13, 2022, Aviat and Redline Communications, Inc.

(“Redline”), a leading provider of mission-critical data infrastructure, signed a definitive agreement for Aviat to acquire all outstanding common stock of Redline.

The transaction closed on July 5, 2022, subsequent to the balance sheet date.

Redline allows Aviat to expand its Private Networks Offering with Private LTE/5G, Unlicensed Wireless Access Solutions, by creating an integrated end-to-end offering for wireless access and transport in the Private Networks segment, leveraging Aviat's sales channel to address a large dollar Private LTE/5G addressable market and increasing Aviat’s reach in mission-critical industrial Private

Redline shareholders received $ 0.69 ($ 0.90 CAD) per share in cash.

The total transaction value was approximately $ 12.9 million USD and the implied enterprise value was approximately $ 15.0 million after adding back Redline’s net debt as of July 5, 2022.

Aviat is continuing to integrate Redline and additional disclosures are not available as of the time of this filing as we are in the process of determining the fair value of the assets and liabilities assumed.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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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 8. Financial Statements and Supplementary Data