7 unchanged sentences
Summary Risk Factors
−Removed: ● Global economic and political conditions, including trade tariffs, import-export restrictions, and other restrictions, may have a negative impact on our business and financial results.We are subject to a number of unique legal and operational risks associated with our corporate structure.
+Added: Global economic and political conditions, including trade tariffs, import-export restrictions, and other restrictions, may have a negative impact on our business and financial results.
+Added: We are subject to a number of unique legal and operational risks associated with our corporate structure.
The PRC central government may intervene in or influence our PRC operations at any time and the rules and regulations in China can change quickly with little advance notice.
52 unchanged sentences
In the years 2024, 2023 and 2022, approximately 8%, 10% and 14% of our revenue, respectively, were generated by sales to customers in North America, primarily in the U.S.
−Removed: In the first quarter of 2025, approximately 6% of our revenue was generated from sales to customers in North America, primarily on the U.S.
−Removed: In the first quarter of 2025, we paid approximately $271,000 in tariffs.
+Added: In the first half of 2025, approximately 3% of our revenue was generated from sales to customers in North America, primarily on the U.S.
+Added: In the first half of 2025, we paid approximately $271,000 in tariffs.
In the years 2024, 2023 and 2022, we paid approximately $1.0 million, $1.0 million and $3.3 million, respectively, in tariffs.
15 unchanged sentences
In the first quarter of 2025, our gross margin was a negative 6.4%;
+Added: In the second quarter of 2025, our gross margin improved to 8.0%.
Our raw material companies experience selling price volatility and purchase price volatility in acquiring base materials.
32 unchanged sentences
Delayed sales, lower margins or lost customers could adversely affect our financial results and reputation.
−Removed: COVID-19 or other contagious diseases may affect our business operations and financial performance.
−Removed: The spread of COVID-19 impacted our operations and financial performance.
−Removed: The outbreak of COVID has triggered references to the SARS outbreak, which occurred in 2003 and affected our business operations.
−Removed: Any severe occurrence of an outbreak of a contagious disease such as COVID-19, SARS, Avian Flu or Ebola may cause us or the government to temporarily close our manufacturing operations in China.
−Removed: In January 2020, virtually all companies in China were ordered to remain closed after the traditional Lunar New Year holiday ended, including our subsidiaries in China.
+Added: We face risks related to health epidemics and other outbreaks, which could significantly disrupt our business operations.
+Added: The spread of a novel strain of coronavirus (COVID-19) around the world in the first quarter of 2020, which was declared a pandemic by the World Health Organization in March 2020, significantly impacted our operations and financial performance.
+Added: In early 2020, in response to intensifying efforts to contain the spread of COVID-19, the Chinese government took a number of actions, which included, among others, ordering companies to remain close after the traditional Lunar New Year holiday ended, which included our subsidiaries in China, and restricting travel between China and the U.S..
In December 2022, the PRC government ended its zero-COVID policy.
−Removed: If there is a renewed surge of the COVID-19 pandemic in cities in which our PRC subsidiaries and PRC joint ventures are located, the Chinese government may require these companies to close again.
+Added: If there is a future outbreak in cities in which our PRC subsidiaries and PRC joint ventures are located, the Chinese government may require these companies to close again.
If one or more of our key suppliers is required to close for an extended period, we might not have enough raw material inventories to continue manufacturing operations.
38 unchanged sentences
Regular use in the normal course of business of hazardous chemicals or hazardous materials or a company’s failure to meet the ever-tightening standards for control of hazardous chemicals or hazardous materials could result in orders to shut down permanently, fines or other severe measures.
−Removed: Any such orders directed at one of our raw material companies could result in impairment charges if the
−Removed: company is forced to close its business, cease operations or incurs fines or operating losses, which would have a material adverse effect on our financial results.
+Added: Any such orders directed at one of our raw material companies could result in impairment charges if the company is forced to close its business, cease operations or incurs fines or operating losses, which would have a material adverse effect on our financial results.
Further, some of our raw material companies share facilities with our raw material investment partners.
30 unchanged sentences
Our products are used to produce components for electronic and opto-electronic products.
−Removed: Accordingly, demand for our products is subject to the demand for end-user applications, including certain consumer applications, which
−Removed: utilize our products.
+Added: Accordingly, demand for our products is subject to the demand for end-user applications, including certain consumer applications, which utilize our products.
For example, we have developed an 8-inch gallium arsenide wafer targeting an application in a consumer product.
27 unchanged sentences
Sumitomo and JX also compete with us in the InP market.
−Removed: are unable to compete effectively, our revenue may decrease and we may not maintain profitability.
+Added: If we are unable to compete effectively, our revenue may decrease and we may not maintain profitability.
We face many competitors that have a number of significant advantages over us, including:
25 unchanged sentences
Our customers are not obligated to purchase a specified quantity of our products or to provide us with binding forecasts of product purchases.
−Removed: addition, our customers may reduce, delay or cancel orders.
+Added: In addition, our customers may reduce, delay or cancel orders.
In the past, we have experienced a slowdown in bookings, significant push-outs and cancellation of orders from customers.
27 unchanged sentences
We have experienced quality control problems with some of our products, which caused customers to return products to us, reduce orders for our products, or both.
−Removed: If we experience quality control problems, or experience other manufacturing problems, customers may return product for
−Removed: credit, cancel or reduce orders or purchase products from our competitors.
+Added: If we experience quality control problems, or experience other manufacturing problems, customers may return product for credit, cancel or reduce orders or purchase products from our competitors.
We may be unable to maintain or increase sales to our customers and sales of our products could decline.
32 unchanged sentences
During periods of weak demand, customers typically reduce purchases, delay delivery of products and/or cancel orders for our products.
−Removed: Order cancellations, reductions in order size or delays in
−Removed: orders could occur and would materially adversely affect our business and results of operations.
+Added: Order cancellations, reductions in order size or delays in orders could occur and would materially adversely affect our business and results of operations.
Actions to reduce our costs may be insufficient to align our structure with prevailing business conditions.
91 unchanged sentences
On February 4, 2025, China added indium phosphide substrates to its export control list.
−Removed: As a result, the three wafer substrate product lines manufactured by Tongmei all require permits from China’s Ministry of Commerce before they can be exported from China.
+Added: As a result, the three wafer substrate product families manufactured by Tongmei all require permits from China’s Ministry of Commerce before they can be exported from China.
To our knowledge, indium phosphide is rarely used in military applications and we can reasonably expect that export permits to ship our indium phosphide substrates to the U.S.
5 unchanged sentences
In the years 2024, 2023 and 2022, approximately 8%, 10% and 14% of our revenue, respectively, were generated by sales to customers in North America, primarily in the U.S.
−Removed: In the first quarter of 2025, approximately 6% of our revenue was generated by sales to customers in North America, primarily in the U.S.
−Removed: In the first quarter of 2025, we paid approximately $271,000 in tariffs.
+Added: In the first half of 2025, approximately 3% of our revenue was generated by sales to customers in North America, primarily in the U.S.
+Added: In the first half of 2025, we paid approximately $271,000 in tariffs.
In the years 2024, 2023 and 2022, we paid approximately $1.0 million, $1.0 million and $3.3 million, respectively, in tariffs.
1 unchanged sentence
Based on the tariffs enacted and currently in effect, we anticipate incurring incremental tariff costs, additional costs that we may incur on products shipped to our customers, and costs as a result of pauses on certain of our product imports, in particular products from China.
−Removed: We may be required to raise prices, which may result in the loss of customers and our business, financial condition and results of operations may be materially
+Added: We may be required to raise prices, which may result in the loss of customers and our business, financial condition and results of operations may be materially harmed.
Additionally, it is possible that our business could be adversely impacted by further retaliatory trade measures taken by China or other countries in response to existing or future tariffs, which could cause us to raise prices or make changes to our operations, which could materially harm our business, financial condition and results of operations.
58 unchanged sentences
Such permits and licenses include permits to use hazardous materials in manufacturing operations.
−Removed: From time to time, the PRC government issues new regulations, which may require additional actions on the part of our
−Removed: PRC subsidiaries and PRC joint ventures to comply.
+Added: From time to time, the PRC government issues new regulations, which may require additional actions on the part of our PRC subsidiaries and PRC joint ventures to comply.
For example, on February 27, 2015, the China State Administration of Work Safety updated its list of hazardous substances.
8 unchanged sentences
Such disruptions have had an adverse impact on our financial performance and could continue in the future.
−Removed: COVID-19 or other contagious diseases may affect our business operations and financial performance.
−Removed: The spread of COVID-19 impacted our operations and financial performance.
−Removed: The outbreak of COVID has triggered references to the SARS outbreak, which occurred in 2003 and affected our business operations.
−Removed: Any severe occurrence of an outbreak of a contagious disease such as COVID-19, SARS, Avian Flu or Ebola may cause us or the government to temporarily close our manufacturing operations in China.
−Removed: In January 2020, virtually all companies in China were ordered to remain closed after the traditional Lunar New Year holiday ended, including our subsidiaries in China.
+Added: We face risks related to health epidemics and other outbreaks, which could significantly disrupt our business operations.
+Added: The spread of a novel strain of coronavirus (COVID-19) around the world in the first quarter of 2020, which was declared a pandemic by the World Health Organization in March 2020, significantly impacted our operations and financial performance.
+Added: In early 2020, in response to intensifying efforts to contain the spread of COVID-19, the Chinese government took a number of actions, which included, among others, ordering companies to remain close after the traditional Lunar New Year holiday ended, which included our subsidiaries in China, and restricting travel between China and the U.S..
In December 2022, the PRC government ended its zero-COVID policy.
−Removed: If there is a renewed surge of the COVID-19 pandemic in cities in which our PRC subsidiaries and PRC joint ventures are located, the Chinese government may require these companies to close again.
+Added: If there is a future outbreak in cities in which our PRC subsidiaries and PRC joint ventures are located, the Chinese government may require these companies to close again.
If one or more of our key suppliers is required to close for an extended period, we might not have enough raw material inventories to continue manufacturing operations.
135 unchanged sentences
The lack of PCAOB inspections of audit work undertaken in China prevented the PCAOB from regularly evaluating independent registered public accounting firms’ audits and their quality control procedures.
−Removed: As a result, to the extent that any component of our independent registered public accounting firm’s work papers is or becomes located in China, such
−Removed: work papers may not be subject to inspection by the PCAOB.
+Added: As a result, to the extent that any component of our independent registered public accounting firm’s work papers is or becomes located in China, such work papers may not be subject to inspection by the PCAOB.
As a result, investors would be deprived of such PCAOB inspections, which could result in limitations or restrictions to our access of the U.S.
38 unchanged sentences
On December 15, 2022, the PCAOB vacated its 2021 determinations that the positions taken by authorities in the PRC and Hong Kong prevented it from inspecting and investigating completely registered public accounting firms headquartered in those jurisdictions.
−Removed: As a result, the SEC will not provisionally or conclusively identify an issuer as a
−Removed: Commission-Identified Issuer if it files an annual report with an audit report issued by a registered public accounting firm headquartered in either jurisdiction on or after December 15, 2022, until such time as the PCAOB issues a new determination.
+Added: As a result, the SEC will not provisionally or conclusively identify an issuer as a Commission-Identified Issuer if it files an annual report with an audit report issued by a registered public accounting firm headquartered in either jurisdiction on or after December 15, 2022, until such time as the PCAOB issues a new determination.
The SEC will continue to include any Commission-Identified Issuer on the provisional or conclusive list if they filed an annual report with an audit report issued by a registered public accounting firm headquartered in mainland China and Hong Kong prior to the PCAOB’s decision to vacate its 2021 determinations.
46 unchanged sentences
Our actual results may not meet the guidance we have provided.
−Removed: our operating or financial results do not meet our guidance or the expectations of investment analysts, our stock price may decline.
+Added: If our operating or financial results do not meet our guidance or the expectations of investment analysts, our stock price may decline.
We have adopted certain anti-takeover measures that may make it more difficult for a third party to acquire us.
13 unchanged sentences
the Board of Directors approves the merger or combination or the transaction which resulted in the stockholder becoming an interested stockholder.
−Removed: Our common stock may be delisted from The Nasdaq Global Select Market, which could negatively impact the price of our common stock and our ability to access the capital markets.
+Added: We are not currently in compliance with the continued listing requirements for the Nasdaq Stock Market.
+Added: If we do not regain compliance with the conitnued listing standards, our common stock may be delisted from The Nasdaq Global Select Market, which could negatively impact the price of our common stock and our ability to access the capital markets.
Our common stock is listed on The Nasdaq Global Select Market.
1 unchanged sentence
If the bid price of our common stock remains below $1.00 per share for thirty consecutive business days, we could be subject to delisting from the Nasdaq Global Select Market.
+Added: On July 14, 2025, we notified The Nasdaq Stock Market LLC (“Nasdaq”) that Ms.
+Added: Christine Russell, our independent director and Chair of the Audit Committee, passed away, and that the Audit Committee has been reduced to two independent directors, and we are not compliant with Nasdaq Lising Rule 5605(c)(2)(A), which requires the Audit Committee to be comprised of a minimum of three independent directors.
+Added: On July 18, 2025, Nasdaq confirmed the foregoing non-compliance and further notified us that we will be provided a cure period in order to regain compliance (i) until the earlier of our next annual meeting of shareholders or July 11, 2026;
+Added: or, (ii) if the next annual meeting of shareholders is held before January 7, 2026, then we must provide evidence of compliance no later than January 7, 2026.
+Added: On July 29, 2025, we appointed Leonard J.
+Added: Leblanc to the Board, to fill Ms.
+Added: Russell’s vacancy and also appointed Mr.
+Added: Leblanc to the Audit Committee.
+Added: However, the Board has determined that Mr.
+Added: Leblanc is not independent under the Nasdaq Listing Rules, and is relying on the exception provided under applicable Nasdaq Listing Rules for membership on the audit committee under exceptional and limited circumstances.
+Added: Leblanc’s previous experience, the Board has determined that the appointment of Mr.
+Added: Leblanc to our Audit Committee as a non-independent director will be in the best interests of the Company and our stockholders.
+Added: LeBlanc’s independence under the Nasdaq Listing Rules will be re-evaluated by the Board on or after January 1, 2026, at which time Mr.
+Added: Leblanc would be considered independent under the Nasdaq Listing Rules on January 1, 2026.
+Added: We cannot assure that we will be able to continue to comply with the continued listing standards that we are required to meet in order to maintain a listing of our common stock on Nasdaq.
+Added: Our failure to continue to meet these requirements may result in our common stock being delisted.
Any delisting from The Nasdaq Global Select Market could have an adverse effect on our business and on the trading of our common stock.
34 unchanged sentences
We may have to resort to costly litigation to enforce our intellectual property rights, to protect our trade secrets or know-how or to determine their scope, validity or enforceability.
−Removed: Enforcing or defending our proprietary technology is
−Removed: expensive, could cause us to divert resources and may not prove successful.
+Added: Enforcing or defending our proprietary technology is expensive, could cause us to divert resources and may not prove successful.
Our protective measures may prove inadequate to protect our proprietary rights, and if we fail to enforce or protect our rights, we could lose valuable assets.
45 unchanged sentences
To manage our business effectively, we may need to implement additional management information systems, further develop our operating, administrative, financial and accounting systems and controls, add experienced senior level managers, and maintain close coordination among our executive, engineering, accounting, marketing, sales and operations organizations.
−Removed: Unregistered Sales of Equity Securitie s and Use of Proceeds
+Added: Unregistered Sales of Equity Securities and Use of Proceeds
Defaults upon Senior Securities
2 unchanged sentences
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.