What changed in this filing

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Item 1A. Risk Factors

2025-09-29 compared with 2024-09-30 · 127 added, 104 removed, 160 unchanged (59% of the section changed)

RISK FACTORS.

The following risk factors do

not purport to be a complete explanation of the risks involved in our business.

The following risk factors

do not purport to be a complete explanation of the risks involved in our business.

WE MAY NEED ADDITIONAL FINANCING

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Regardless of whether these infringement claims have merit or not, we may be subject to the following:

We may be liable for potentially substantial damages, liabilities, and litigation costs, including attorneys’ fees;

We may be prohibited from further use of the intellectual property and may be required to cease selling our products that are subject to the claim;

We may have to license third-party intellectual property, incurring royalty fees that may or may not be on commercially reasonable terms.

may be liable for potentially substantial damages, liabilities, and litigation costs, including attorneys’ fees;

may be prohibited from further use of the intellectual property and may be required to cease selling our products that are subject to

may have to license third-party intellectual property, incurring royalty fees that may or may not be on commercially reasonable terms.

In addition, there is no assurance that we will be able to successfully negotiate and obtain such a license from the third party;

We may have to develop a non-infringing alternative, which could be costly and delay or result in the loss of sales.

In addition, there is no assurance that we will be able to develop such a non-infringing alternative;

The diversion of management’s attention and resources;

Our relationships with customers may be adversely affected;

We may be required to indemnify our customers for certain costs and damages they incur in such a claim.

may have to develop a non-infringing alternative, which could be costly and delay or result in the loss of sales.

In addition, there

is no assurance that we will be able to develop such a non-infringing alternative;

diversion of management’s attention and resources;

relationships with customers may be adversely affected;

may be required to indemnify our customers for certain costs and damages they incur in such a claim.

In the event of an unfavorable

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our business, operating results and financial condition may be materially adversely affected and we may have to restructure our business.

Absent a specific claim for infringement

of intellectual property, from time to time we have and expect to continue to license technology, intellectual property, and software

from third parties.

There is no assurance that we will be able to maintain our third-party licenses or obtain new licenses when required

and this inability could materially adversely affect our business and operating results and the quality and functionality of our products.

Absent a specific claim for

infringement of intellectual property, from time to time we have and expect to continue to license technology, intellectual property,

and software from third parties.

There is no assurance that we will be able to maintain our third-party licenses or obtain new licenses

when required and this inability could materially adversely affect our business and operating results and the quality and functionality

of our products.

In addition, there is no assurance that third party licenses we execute will be on commercially reasonable terms.

Under purchase orders and contracts

for the sale of our products we may provide indemnification to our customers for potential intellectual property infringement claims for

which we may have no corresponding recourse against our third-party licensors.

This potential liability, if realized, could materially

adversely affect our business, operating results, and financial condition.

WE OPERATE IN AN INTENSIVELY COMPETITIVE

Under purchase orders and

contracts for the sale of our products we may provide indemnification to our customers for potential intellectual property infringement

claims for which we may have no corresponding recourse against our third-party licensors.

This potential liability, if realized, could

materially adversely affect our business, operating results, and financial condition.

WE OPERATE IN AN INTENSIVELY

COMPETITIVE MARKET.

The wireless broadband data access market is highly competitive, and we may be unable to compete effectively.

Many of our competitors

or potential competitors have significantly greater financial, technical, and marketing resources than we do.

To survive and be competitive,

we will need to continuously invest in research and development, sales and marketing, and customer support.

Increased competition could

result in price reductions, and smaller customer orders.

Our failure to compete effectively could seriously impair our business.

WE OPERATE IN THE HIGH-RISK TELECOM

of our competitors or potential competitors have significantly greater financial, technical, and marketing resources than we do.

and be competitive, we will need to continuously invest in research and development, sales and marketing, and customer support.

competition could result in price reductions, and smaller customer orders.

Our failure to compete effectively could seriously impair our

WE OPERATE IN THE HIGH-RISK

TELECOM SECTOR.

We are in a volatile industry.

In addition, our revenue model is evolving and relies substantially on the assumption that we will

be able to successfully complete the development and sales of our products and services in the marketplace.

Our prospects must be considered

in the light of the risk, uncertainties, expenses, and difficulties frequently encountered by companies in the early stages of development

and marketing of new products.

In addition, our revenue model is evolving and relies substantially on the assumption that

we will be able to successfully complete the development and sales of our products and services in the marketplace.

Our prospects must

be considered in the light of the risk, uncertainties, expenses, and difficulties frequently encountered by companies in the early stages

of development and marketing of new products.

To be successful in the market we must, among other things:

Complete development and introduction of functional and attractive products and services;

Attract and maintain customer loyalty;

development and introduction of functional and attractive products and services;

and maintain customer loyalty;

Establish and increase awareness of our brand and develop customer loyalty;

Provide desirable products and services to customers at attractive prices;

desirable products and services to customers at attractive prices;

Establish and maintain strategic relationships with strategic partners and affiliates;

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Build operations and customer service infrastructure to support our business;

Attract, retain, and motivate qualified personnel.

We cannot guarantee that we will

be able to achieve these goals, and our failure to achieve them could adversely affect our business, results of operations, and financial

retain, and motivate qualified personnel.

We cannot guarantee that we

will be able to achieve these goals, and our failure to achieve them could adversely affect our business, results of operations, and financial

We expect that revenues and operating results will fluctuate in the future.

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will produce a successful outcome.

WE OPERATE IN THE HIGH-RISK HARDWARE

DESIGN INDUSTRY.

WE OPERATE IN THE HIGH-RISK

HARDWARE DESIGN INDUSTRY.

We are in a volatile industry.

In this industry it should be expected that:

Latent design flaws can be discovered, even after a device has been certified;

Latent component defects can be discovered in critical systems, including batteries, LCDs, chargers, and other systems;

design flaws can be discovered, even after a device has been certified;

component defects can be discovered in critical systems, including batteries, LCDs, chargers, and other systems;

Manufacturing defects and flaws will occur during device production.

WE OPERATE IN THE HIGH-RISK SOFTWARE

SOME OF OUR PRODUCTS INCLUDE BATTERIES.

following are common dangers of lithium batteries.

Thermal Runaway:

An uncontrollable chemical reaction that causes the cells to heat up rapidly, leading to intense fires, potential explosions,

and the ejection of cells.

Fires and Explosions:

The batteries contain volatile electrolytes that, when exposed to damage or high temperatures, can ignite, causing

fires that reach extreme temperatures.

Toxic and Flammable Gases:

When a battery malfunctions, it can release flammable and toxic gases, which can ignite and create a fire.

Hydrofluoric Acid Exposure:

During combustion, fluorine can separate from lithium salts, forming hydrofluoric acid when mixed with water

vapor, posing a severe health risk.

The extreme temperatures of lithium battery fires, reaching up to 1000°F or more, can cause severe third-degree burns.

Chemical Exposure:

The chemicals inside the batteries, including toxic and flammable electrolytes, pose chemical hazards if released.

Choking Hazard:

Small lithium-ion button batteries can cause severe chemical burns to the esophagus if ingested.

WE OPERATE IN THE HIGH-RISK

SOFTWARE INDUSTRY.

This industry has numerous and significant known risks.

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Latent design flaws and security defects will be discovered, even after a device has been tested and approved;

Code within a program will fail to operate as intended due to updates or changes in other systems;

Hacking and malicious actions by outside parties can damage or alter coding and system integrity.

within a program will fail to operate as intended due to updates or changes in other systems;

and malicious actions by outside parties can damage or alter coding and system integrity.

POTENTIAL DESIGN AND MANUFACTURING

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intangible assets, and significant warranty and other expenses, including litigation costs and regulatory fines.

WE OPERATE IN A FIELD WITH RAPIDLY

CHANGING TECHNOLOGY.

WE OPERATE IN A FIELD WITH

RAPIDLY CHANGING TECHNOLOGY.

We cannot be certain that our products and services will function as anticipated or be desirable to our intended

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products on time, we may lose customers and potential product orders.

WE DEPEND ON THE DEMAND FOR WIRELESS

NETWORK CAPACITY.

WE DEPEND ON THE DEMAND FOR

WIRELESS NETWORK CAPACITY.

The demand for our products is completely dependent on the demand for broadband wireless access to networks.

operators do not deliver acceptable wireless service, our product sales may dramatically decline.

Thus, if wireless operators experience

financial or network difficulties, it will likely reduce demand for our products.

These are beyond our ability to control and can either

increase or decrease demand for our products.

PANDEMIC OUTBREAKS CAN CAUSE VOLATILE

CHANGES IN THE MARKET.

Demand for wireless access can rise and fall greatly during times of pandemic outbreaks, such as COVID-19, as more

people may be required to work remotely, and schools may be required to operate remote classrooms.

When an outbreak ends, or becomes more

controlled, demand for wireless devices could decline rapidly, decreasing demand for our products.

If wireless operators do not deliver acceptable wireless service, our product sales may dramatically decline.

Thus, if wireless operators

experience financial or network difficulties, it will likely reduce demand for our products.

These are beyond our ability to control and

can either increase or decrease demand for our products.

PANDEMIC OUTBREAKS CAN CAUSE

VOLATILE CHANGES IN THE MARKET.

Demand for wireless access can rise and fall greatly during times of pandemic outbreaks, such as COVID-19,

as more people may be required to work remotely, and schools may be required to operate remote classrooms.

When an outbreak ends, or becomes

more controlled, demand for wireless devices could decline rapidly, decreasing demand for our products.

Pandemic outbreaks can also disrupt

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All these changes are beyond our ability to control and can cause revenue and income to change dramatically.

WE DEPEND ON COLLABORATIVE ARRANGEMENTS.

The development and commercialization of our products and services depend in large part upon our ability to selectively enter and maintain

collaborative arrangements with developers, distributors, service providers, network systems providers, core wireless communications technology

providers and manufacturers, among others.

THE LOSS OF ANY OF OUR

MATERIAL CUSTOMERS COULD ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY, AND THEREFORE SHAREHOLDER VALUE.

We depend on a small

number of customers for a significant portion of our revenues.

For the year ended June 30, 2024, net revenues from our two largest

customers represented 68% and 23% of our consolidated net sales, respectively.

We have a written agreement with each of these

customers that governs the sale of products to them, but the agreements do not obligate them to purchase any quantity of

products from us.

If these customers were to reduce their business with us, our revenues and profitability could materially

WE DEPEND ON COLLABORATIVE

ARRANGEMENTS.

The development and commercialization of our products and services depend in large part upon our ability to selectively

enter and maintain collaborative arrangements with developers, distributors, service providers, network systems providers, core wireless

communications technology providers and manufacturers, among others.

THE LOSS OF ANY OF OUR MATERIAL

CUSTOMERS COULD ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY, AND THEREFORE SHAREHOLDER VALUE.

We depend on a small number of customers

for a significant portion of our revenues.

For the year ended June 30, 2025, net revenues from our two largest customers represented

60.9% and 33.5% of our consolidated net sales, respectively.

We have a written agreement with each of these customers that

governs the sale of products to them, but the agreements do not obligate them to purchase any quantity of products from us.

customers were to reduce their business with us, our revenues and profitability could materially decline.

OUR PRODUCT DELIVERIES ARE

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We often experience long-lead times to ship products, often more than 45 days.

This could cause us to

lose customers, who may be able to secure faster delivery times from our competitors and require us to maintain higher levels of

working capital.

This could cause us to lose

customers, who may be able to secure faster delivery times from our competitors and require us to maintain higher levels of working capital.

OUR PRODUCT-TO-MARKET CHALLENGE

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Increased credit management risks and greater difficulties in collecting accounts receivable;

Unexpected changes in regulatory requirements, wireless communications standards, exchange rates, trading policies, tariffs, and other barriers;

Uncertainties of laws and enforcement relating to the protection of intellectual property;

Language barriers;

Potential adverse tax consequences.

changes in regulatory requirements, wireless communications standards, exchange rates, trading policies, tariffs, and other barriers;

Uncertainties

of laws and enforcement relating to the protection of intellectual property;

adverse tax consequences.

Furthermore, if we are unable

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and Africa), and Asia, we may not be able to grow our international operations, and our ability to increase our revenue will be negatively

We believe that our products are

currently exempt from international tariffs.

If this were to change at any point, a tariff of 10%-25% of the purchase price could be imposed.

We believe that our products

are currently exempt from international tariffs.

If this were to change at any point, a tariff of 10%-80% of the purchase price could

If such tariffs are imposed, they could have a materially adverse effect on sales and operating results.

GOVERNMENT REGULATION COULD RESULT

IN INCREASED COSTS AND INABILITY TO SELL OUR PRODUCTS.

Our products are subject to certain mandatory regulatory approvals in the United

States and other regions in which we operate.

In the United States, the Federal Communications Commission regulates many aspects of communications

Although we have obtained all the necessary Federal Communications Commission and other required approvals for the products we

currently sell, we may not obtain approvals for future products on a timely basis, or at all.

In addition, regulatory requirements may

change, or we may not be able to obtain regulatory approvals from countries other than the United States in which we may desire to sell

products in the future.

EVENTS THAT COULD REDUCE OR IMPAIR

OUR ABILITY TO GENERATE REVENUES.

The financial impact

of this could make our business unprofitable.

GOVERNMENT REGULATION COULD

RESULT IN INCREASED COSTS AND INABILITY TO SELL OUR PRODUCTS.

Our products are subject to certain mandatory regulatory approvals in the

United States and other regions in which we operate.

In the United States, the Federal Communications Commission regulates many aspects

of communications devices.

Although we have obtained all the necessary Federal Communications Commission and other required approvals

for the products we currently sell, we may not obtain approvals for future products on a timely basis, or at all.

In addition, regulatory

requirements may change, or we may not be able to obtain regulatory approvals from countries other than the United States in which we

may desire to sell products in the future.

EVENTS THAT COULD REDUCE OR

IMPAIR OUR ABILITY TO GENERATE REVENUES.

o The marketability of our products may suffer if wireless telecommunications operators do not deliver acceptable wireless services.

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we may not achieve our revenue targets, or we may lose key customers or sales, and our business could be harmed.

EVENTS THAT COULD IMPAIR OUR ABILITY TO

DEVELOP, MANUFACTURE AND DELIVER OUR SOLUTIONS.

EVENTS THAT COULD IMPAIR OUR ABILITY

TO DEVELOP, MANUFACTURE AND DELIVER OUR SOLUTIONS.

o We rely on third parties to manufacture and warehouse many of our products, which exposes us to a number of risks and uncertainties

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o If we are unable to protect our intellectual property and proprietary rights, our competitive position and our business could be harmed.

POTENTIAL NEGATIVE IMPACTS RELATED TO INTERNATIONAL

POTENTIAL NEGATIVE IMPACTS RELATED TO

INTERNATIONAL OPERATIONS.

o Due to the global nature of our operations, we are subject to political and economic risks of doing business internationally.

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o If our goodwill and acquired intangible assets become impaired, we may be required to record a significant charge to earnings.

POTENTIAL EVENTS THAT COULD NEGATIVELY IMPACT

THE VALUE OF OUR SECURITIES.

POTENTIAL EVENTS THAT COULD NEGATIVELY

IMPACT THE VALUE OF OUR SECURITIES.

o Our share price has been highly volatile in the past and could be highly volatile in the future.

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o Ownership of our common stock is concentrated, and as a result, certain stockholders may exercise significant influence over the Company.

o We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment

o We do not currently pay recurring dividends on our common stock, and, consequently, your ability to achieve a return on your investment

will depend on appreciation, if any, in the price of our common stock.

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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 1A. Risk Factors