What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-08 · 97 added, 71 removed, 143 unchanged (54% of the section changed)

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We have solutions to accelerate multimodal vector search as an on-prem or SaaS solution for OpenSearch and general Fast Vector Search, and for processing large area SAR images in real-time at high resolution.

Our revenue is currently generated from the design, development and marketing of static random access memories, or SRAMs, that operate at speeds of less than 10 nanoseconds, which we refer to as Very Fast SRAMs, primarily for the networking and telecommunications, test equipment and the military/defense and aerospace markets We are subject to the highly cyclical nature of the semiconductor industry, which has experienced significant fluctuations, often in connection with fluctuations in demand for the products in which semiconductor devices are used.

We are subject to the highly cyclical nature of the semiconductor industry, which has experienced significant fluctuations, often in connection with fluctuations in demand for the products in which semiconductor devices are used.

Our revenues have been substantially impacted by significant fluctuations in sales to our largest end user customers, Nokia, KYEC and Cadence Design Systems.

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Our next-generation non-Von-Neumann Associative Processing Unit compute in-memory integrated circuit (“IC”) offers unique capabilities to address the challenges faced by the United States Space Force in processing extensive sets of big data in space.

Our overarching objective is to enable and enhance current and future mission capabilities through the deployment of compute in-memory integrated systems that can efficiently handle vast amounts of data in real-time at the edge.

Our overarching objective is to enable and enhance current and

future mission capabilities through the deployment of compute in-memory integrated systems that can efficiently handle vast amounts of data in real-time at the edge.

The APU, featuring a scalable format, compact footprint, and low power consumption, presents an ideal solution for edge applications where prompt and precise responses are crucial.

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government agencies, that encourages small businesses to engage in federal research and development with the potential for commercialization.

Under the terms of this Direct to Phase

II award, we are developing an advanced non-Von-Neumann Associative Processing Unit-2, compute in-memory IC, and design and fabricate an APU2 Evaluation Board.

Under the terms of this Direct to Phase II award, we are developing an advanced non-Von-Neumann Associative Processing Unit-2, compute in-memory IC, and design and fabricate an APU2 Evaluation Board.

Pursuant to an agreed-upon schedule, we are to receive milestone payments totaling an estimated $1.25 million upon the successful completion of predetermined milestones, of which $435,000, $318,000 and $316,000 were received in fiscal 2024, 2025 and 2026, respectively.

In September 2025, the prototype agreement was amended to increase the total award amount to $2.0 million by adding milestones related to determining the radiation hardened capability of the APU3 device.

In January 2024, we announced that GSI was selected by AFWERX the innovation arm of the U.S.

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Space Force to showcase the performance benefits of our compute-in-memory APU2 integrated circuit.

We will receive milestone payments totaling an estimated $1.1 million upon the successful completion of predetermined milestones, of which $157,000 was received in fiscal 2025 and $657,000 was received in fiscal 2026 through July 2025.

We received milestone payments totaling an estimated $1.1 million upon the successful completion of predetermined milestones, of which $157,000 was received in fiscal 2025 and $936,000 was received in fiscal 2026.

In January 2025, we announced that GSI has been selected by the U.S.

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Milestone payments of $82,000 and $165,000 were received in fiscal 2025 and 2026, respectively for this contract which is now completed.

As of June 30, 2025, we had cash and cash equivalents of $22.7 million, with no debt.

As of September 30, 2025, we had cash and cash equivalents of $25.3 million, with no debt.

We have a team in-place with tremendous depth and breadth of experience and knowledge, with a legacy business that is providing an ongoing source of funding for the development of new product lines.

Our balance sheet and liquidity position was strengthened by the sale of our Sunnyvale, California property in June 2024.

In addition, in May and June 2025, we sold 3,380,773 shares of common stock pursuant to an At-the-Market offering, at an average price of $3.32 for net proceeds of $10.8 million.

In addition, between May and August 2025, we sold 4,508,350 shares of common stock pursuant to an At-the-Market offering, at an average price of $3.29 for net proceeds of $14.3 million .

On October 21, 2025, we entered into a securities purchase agreement with an institutional investor pursuant to which we agreed to issue and sell, in a registered direct offering an aggregate of (i)1,508,462 shares of our common stock, $0.001 par value per share, at a price of $10.00 per share and (ii) pre-funded warrants to purchase 3,491,538 shares of Common Stock.

Each of the Pre-Funded Warrants is

exercisable for one share of Common Stock at the exercise price of $0.01 per Pre-Funded Warrant, immediately exercisable, and may be exercised at any time.

The Purchaser’s ability to exercise its Pre-Funded Warrants is subject to certain beneficial ownership limitations set forth therein.

The gross proceeds to the Company from the Registered Direct Offering were approximately $50 million, before deducting the placement agents’ fees and other offering expenses payable by the Company of approximately $3.0 million.

The Registered Direct Offering closed on October 22, 2025.

Generally, our primary source of liquidity is cash equivalents.

Our level of cash equivalents has historically been sufficient to meet our current and longer term operating and capital needs.

We believe that during the next 12 months, continued inflationary pressures, increase or new tariffs, trade disputes and restrictions, higher interest rates and increasing geopolitical tensions will continue to negatively impact general economic activity and demand in our end markets.

Although it is difficult to estimate the length or gravity of the continued inflationary pressures, increased or tariffs, trade disputes and restrictions, higher interest rates, increasing geopolitical tensions and the decline in the global economic environment, are expected to have an adverse effect on our results of operations, financial position, including potential impairments, and liquidity through fiscal 2026.

We believe that during the next 12 months, continued inflationary pressures, increased or new tariffs, trade disputes and restrictions and increasing geopolitical tensions will continue to negatively impact general economic activity and demand in our end markets.

Although it is difficult to estimate the length or gravity of the continued inflationary pressures, increased or tariffs, trade disputes and restrictions, increasing geopolitical tensions and the challenging global economic environment, are expected to have an adverse effect on our results of operations, financial position, including potential impairments, and liquidity through fiscal 2026.

Substantially all of our revenues are derived from sales of our Very Fast SRAM products.

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KYEC purchases product through contract manufacturers and distributors.

Based on information provided to us by KYEC’s contract manufacturers and distributors, purchases by KYEC represented approximately 4%, 23%, 3% and 2% of our net revenues in the three months ended June 30, 2025, and in fiscal 2025, 2024 and 2023, respectively.

Based on information provided to us by KYEC’s contract manufacturers and distributors, purchases by KYEC represented approximately 8%, 23%, 3% and 2% of our net revenues in the six months ended September 30, 2025, and in fiscal 2025, 2024 and 2023, respectively.

Nokia purchases products directly from us and through contract manufacturers and distributors.

Based on information provided to us by its contract manufacturers and our distributors, purchases by Nokia represented approximately 9%, 12%, 21% and 17% of our net revenues in the three months ended June 30, 2025, and in fiscal 2025, 2024 and 2023, respectively.

Based on information provided to us by its contract manufacturers and our distributors, purchases by Nokia represented approximately 6%, 12%, 21% and 17% of our net revenues in the six months ended September 30,

2025, and in fiscal 2025, 2024 and 2023, respectively.

Cadence Design Systems purchases products through contract manufacturers and distributors.

Based on information provided to us by its contract manufacturers and our distributors, purchases by Cadence Design Systems represented approximately 24%, 8%, 8% and 2% of our net revenues in the three months ended June 30, 2025, and in fiscal 2025, 2024 and 2023, respectively.

Based on information provided to us by its contract manufacturers and our distributors, purchases by Cadence Design Systems represented approximately 23%, 8%, 8% and 0% of our net revenues in the six months ended September 30, 2025, and in fiscal 2025, 2024 and 2023, respectively.

Our revenues have been substantially impacted by significant fluctuations in sales to Nokia, KYEC and Cadence Design Systems, and we expect that future direct and indirect sales to Nokia, KYEC and Cadence Design Systems will continue to fluctuate substantially on a quarterly basis and that such fluctuations may significantly affect our operating results in future periods.

To our knowledge, none of our other OEM customers accounted for more than 10% of our net revenues in the three months ended June 30, 2025 or in fiscal 2025, 2024 or 2023.

To our knowledge, none of our other OEM customers accounted for more than 10% of our net revenues in the six months ended September 30, 2025 or in fiscal 2025, 2024 or 2023.

Cost of Revenues.

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In particular, we are devoting substantial resources to the development of our in-place associative computing products.

Accordingly, we expect that our research and development expenses will continue to be substantial in future periods and may lead to operating losses in some periods.

Accordingly, we expect that our research and development expenses will increase in future periods as we expand our hardware and software development teams to complete development of our Gemini-II and Plato product offerings.

Research and development expenses will be substantial in future periods and may lead to operating losses in some periods.

Such expenses as a percentage of net revenues may fluctuate from period to period.

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We also expect that, in support of any future growth that we are able to achieve, general and administrative expenses will generally increase in absolute dollars.

We had a goodwill balance of $8.0 million as of both June 30, 2025 and March 31, 2025.

We had a goodwill balance of $8.0 million as of both September 30, 2025 and March 31, 2025.

The goodwill resulted from the acquisition of MikaMonu Group Ltd.

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Measurement of any impairment loss is based on the excess of the carrying value of the asset over its fair value.

There were no impairment indicators noted as of June 30, 2025 and March 31, 2025 .

There were no impairment indicators noted as of September 30, 2025 and March 31, 2025 .

Based on the uncertainty of forecasts inherent with a new product, events such as the failure to generate forecasted revenue from the APU product could result in a non-cash impairment charge in future periods.

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The following table sets forth statement of operations data as a percentage of net revenues for the periods indicated:

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

Cost of revenues

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Total operating expenses

Income (loss) from operations

Loss from operations

Interest and other income, net

Income (loss) before income taxes

Loss before income taxes

Provision for income taxes

Net income (loss)

Net Revenues .

Net revenues increased by 34.5% from $4.7 million in the three months ended June 30, 2024 to $6.3 million in the three months ended June 30, 2025.

The overall average selling price of all units shipped in the quarter ended June 30, 2025 increased by 37.9% compared to the quarter ended June 30, 2024 and the number of units shipped decreased by 2.0% in the quarter ended June 30, 2025 compared to the quarter ended June 30, 2024.

Net revenues increased by 41.6% from $4.6 million in the three months ended September 30, 2024 to $6.4 million in the three months ended September 30, 2025 and by 38.0% from $9.2 million in the six months ended September 30, 2024 to $12.7 million in the six months ended September 30, 2025.

The overall average selling price of all units shipped in the quarter ended September 30, 2025 increased by 19.2% compared to the quarter ended September 30, 2024 and the number of units shipped increased by 19.0% in the quarter ended September 30, 2025 compared to the quarter ended September 30, 2024.

The overall average selling price of all units shipped in the six months ended September 30, 2025 increased by 27.3% compared to the six months ended September 30, 2024 and the number of units shipped increased 8.7% in the six months ended September 30, 2025 compared to the six months ended September 30, 2024.

The change in the average selling price was due to changes in product mix.

KYEC, which is a leading provider in the test and measurement market, was our largest end user customer in fiscal 2025.

Direct and indirect sales to KYEC decreased by $755,000 from $1.0 million in the three months ended June 30, 2024 to $267,000 in the three months ended June 30, 2025.

Direct and indirect sales to Nokia decreased by $462,000 from $998,000 in the three months ended June 30, 2024 to $536,000 in the three months ended June 30, 2025.

Direct and indirect sales to Cadence Design Systems increased by $1.5 million from $0 in the three months ended June 30, 2024 to $1.5 million in the three months ended June 30, 2025.

Direct and indirect sales to KYEC increased by $152,000 from $650,000 in the three months ended September 30, 2024 to $802,000 in the three months ended September 30, 2025 and decreased by $602,000 from $1.7 million in the six months ended September 30, 2024 to $1.1 million in the six months ended September 30, 2025.

Direct and indirect sales to Nokia decreased from $812,000 in the three months ended September 30, 2024 to $200,000 in the three months ended September 30, 2025 and decreased from $1.8 million in the six months ended September 30, 2024 to $736,000 in the six months ended September 30, 2025.

Direct and indirect sales to Cadence Design Systems increased by $1.4 million from $0 in the three months ended September 30, 2025 to $1.4 million in the three months ended September 30, 2025 and increased by $2.9 million from $0 in the six months ended September 30, 2024 to $2.9 million in the six months ended September 30, 2025.

Shipments to KYEC, Nokia and Cadence Design Systems will continue to fluctuate on a quarterly basis as a result of demand and shipments to their end customers.

While recent customer order patterns have been particularly variable, these fluctuations are related to economic and external factors, which include worldwide inflationary pressures, higher interest rates, increase or new tariffs, trade disputes and restrictions, increasing geopolitical tensions and the decline in the global economic environment.

In addition, during the second half of fiscal 2025, we saw early indications of an improvement in our SRAM business.

Existing customers are depleting their channel inventory, and we anticipate they will resume ordering in the upcoming quarters.

While recent customer order patterns have been particularly variable, these

fluctuations are related to economic and external factors, which include worldwide inflationary pressures, increased or new tariffs, trade disputes and restrictions, increasing geopolitical tensions and the challenging global economic environment.

Cost of Revenues.

Cost of revenues increased by 4.9% from $2.5 million in the three months ended June 30, 2024 to $2.6 million in the three months ended June 30, 2025.

The increase in cost of revenues was primarily related to changes in the mix of products and customers.

Cost of revenues included a provision for excess and obsolete inventories of $70,000 in the three months ended June 30, 2025 compared to $91,000 in the three months ended June 30, 2024.

Cost of revenues included stock-based compensation expense of $44,000 and $56,000 in the three months ended June 30, 2025 and 2024, respectively.

Cost of revenues increased by 4.2% from $2.8 million in the three months ended September 30, 2024 to $2.9 million in the three months ended September 30, 2025 and increased by 4.5% from $5.3 million in the six months ended September 30, 2024 to $5.5 million in the six months ended September 30, 2025.

Cost of revenues included a provision for excess and obsolete inventories of $180,000 in the six months ended September 30, 2024 compared to $127,000 in the six months ended September 30, 2025.

Cost of revenues includes $203,000 in severance related payments in the three months and six months ended September 30, 2024 related to our August 2024 cost reduction initiative.

Cost of revenues included stock-based compensation expense of $51,000 and $58,000 for the three months ended September 30, 2024 and 2025, respectively, and $107,000 and $102,000 for the six months ended September 30, 2024 and 2025, respectively.

Gross Profit.

Gross profit increased by 69.0% from $2.2 million in the three months ended June 30, 2024 to $3.7 million in the three months ended June 30, 2025.

Gross margin increased from 46.3% in the three months ended June 30, 2024 to 58.1% in the three months ended June 30, 2025.

The change in gross profit is primarily related to the change in net revenues discussed above.

The increase in gross margin was primarily related to change in the mix of products and customers and also reflects the impact of fixed overhead on higher shipment levels compared to the prior year.

Gross profit increased by 101.1% from $1.8 million in the three months ended September 30, 2024 to $3.5 million in the three months ended September 30, 2025 and by 83.4% from $3.9 million in the six months ended September 30, 2024 to $7.2 million in the six months ended September 30, 2025.

Gross margin increased from 38.6% in the three months ended September 30, 2024 to 54.8% in the three months ended September 30, 2025 and from 42.5% in the six months ended September 30, 2024 to 56.5% in the six months ended September 30, 2025.

The changes in gross profit are primarily related to the increases in net revenues discussed above.

The increase in gross margin was primarily related to changes in the mix of products and customers and also reflects the impact of fixed overhead on higher shipment levels compared to the prior year.

Gross margin in the three and six months ended September 30, 2024 was also impacted by the severance related payments related to our August 2024 cost reduction initiative discussed above.

Research and Development Expenses.

Research and development expenses decreased 26.5% from $4.2 million in the three months ended June 30, 2024 to $3.1 million in the three months ended June 30, 2025.

decrease in research and development spending was primarily related to a decrease in stock-based compensation of $352,000, a decrease in payroll related expenses of $337,000 and a decrease of $231,000 in software maintenance expense.

Research and development expenses in the three months ended June 30, 2025 and 2024 were also offset by $543,000 and $318,000, respectively, of funding received under the government contracts discussed above.

The decrease in payroll related expenses was related to the cost reduction measures implemented in August 2024.

Research and development expenses included stock-based compensation expense (credit to expense) of ($62,000) and $290,000 in the three months ended June 30, 2025 and 2024, respectively.

Research and development expenses decreased by 21.3% from $4.8 million in the three months ended September 30, 2024 to $3.8 million in the three months ended September 30, 2025 .

The decrease in research and development spending was primarily related to decreases of $270,000 in software maintenance expenses, $241,000 in outside consulting expenses for the development of our next generation APU product and $141,000 in payroll related expenses.

Research and development expenses in the three months ended September 30, 2025 were also offset by $279,000 of funding received under the Direct to Phase II award for the development from AFWERX discussed above.

The decrease in payroll related expenses was due to reductions in headcount in the quarter ended September 30, 2024.

Research and development expenses included stock-based compensation expense of $336,000 and $303,000 for the three months ended September 30, 2024 and 2025, respectively.

Research and development expenses decreased by 23.7% from $9.0 million in the six months ended September 30, 2024 to $6.9 million in the six months ended September 30, 2025.

The decrease in research and development spending was primarily related to decreases of $500,000 in software maintenance expenses, $479,000 in payroll related expenses and $385,000 in stock-based compensation expense.

Research and development expenses in the six months ended September 30, 2024 were also offset by $318,000 of funding received under the government contracts discussed above compared to $822,000 in the six months ended September 30, 2025.

Research and development expenses included stock-based compensation expense of $626,000 and $241,000 for the six months ended September 30, 2024 and 2025, respectively.

Selling, General and Administrative Expense.

Selling, general and administrative expenses increased 4.8% from $2.6 million in the three months ended June 30, 2024 to $2.7 million in the three months ended June 30, 2025.

In the three months ended June 30, 2024 and June 30, 2025, the value of contingent consideration liability resulting from the MikaMonu acquisition decreased by $86,000 and $0, respectively.

Selling, general and administrative expenses included stock-based compensation expense of $359,000 and $312,000 in the three months ended June 30, 2025 and fiscal 2024, respectively.

Selling, general and administrative expenses increased by 15.6% from $2.6 million in the three months ended September 30, 2024 to $3.0 million in the three months ended September 30, 2025.

Selling, general and administrative expenses included increases of $219,000 in stock-based compensation, $120,000 in professional fees and $104,000 in facility related expenses, partially offset by a decrease of $70,000 in payroll related expenses.

Selling, general and administrative expenses included stock-based compensation expense of $276,000 and $495,000 for the three months ended September 30, 2024 and 2025, respectively.

Selling, general and administrative expenses increased by 10.2% from $5.2 million in the six months ended September 30, 2024 to $5.7 million in the six months ended September 30, 2025.

Selling general and administrative expenses included increases of $266,000 in stock-based compensation, $165,000 in facilities related expense and $142,000 in professional fees.

Selling, general and administrative expenses included a decrease of $109,000 in the value of contingent consideration in the six months ended September 30, 2024.

Selling, general and administrative expenses included stock-based compensation expense of $588,000 and $854,000 for the six months ended September 30, 2024 and 2025, respectively.

Gain from Sale of Assets .

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Interest Income and Other Expense, Net.

Interest income and other income (expense), net decreased from income of $55,000 in the three months ended June 30, 2024 to $13,000 in the three months ended June 30, 2025.

Interest income decreased by $22,000 primarily due to lower cash balances invested in money market funds.

The foreign currency exchange loss increased from ($33,000) in the three months ended June 30, 2024 to ($53,000) in the three months ended June 30, 2025.

The exchange loss in each period was primarily related to our Taiwan operations and operations in Israel.

Interest and other income, net decreased by $106,000 from $149,000 in the three months ended September 30, 2024 to $43,000 in the three months ended September 30, 2025.

Interest income decreased by $55,000 primarily due to changes in interest rates received on our cash invested in money market funds and changing levels of invested cash.

Foreign exchange losses were $13,000 for the three months ended September 30, 2024 compared to $64,000 for the three months ended September 30, 2025.

Interest and other income, net decreased by $148,000 from $204,000 in the six months ended September 30, 2024 to $56,000 in the six months ended September 30, 2025.

Interest income decreased by $76,000, primarily due to changes in interest rates received on our cash invested in money market funds and changing levels of invested cash, in the six months ended September 30, 2024 compared to the six months ended September 30, 2025.

Foreign exchange losses were $45,000 for the six months ended September 30, 2024 compared to $117,000 for the six months ended September 30, 2025.

Provision for Income Taxes.

The provision for income taxes decreased from $57,000 in the three months ended June 30, 2024 to $54,000 in the three months ended June 30, 2025.

The provision for income taxes increased from $23,000 in the three months ended September 30, 2024 to $41,000 in the three months ended September 30, 2025 and increased from $80,000 in the six months ended September 30, 2024 to $95,000 in the six months ended September 30, 2025.

This change was primarily due to fluctuations in the relative mix of income among our operating jurisdictions.

Net Income (Loss) .

Net income was $1.1 million in the three months ended June 30, 2024 compared to a net loss of ($2.2) million in the three months ended June 30, 2025.

This fluctuation was primarily due to the changes in net revenues, gross profit, operating expenses and gain from sale of assets discussed above

Net loss was $5.5 million in the three months ended September 30, 2024 compared to $3.2 million in the three months ended September 30, 2025 and was $4.4 million in the six months ended September 30, 2024 compared to $5.4 million in the six months ended September 30, 2025.

These fluctuations were primarily due to the changes in net revenues, gross profit, operating expenses and gain from sale of assets discussed above.

Liquidity and Capital Resources

As of June 30, 2025, our principal sources of liquidity were cash and cash equivalents of $22.7 million compared to cash and cash equivalents $13.4 million as of March 31, 2025.

Net cash used in operating activities was $1.7 million and $4.3 million in the three months ended June 30, 2025 and 2024, respectively.

The primary uses of cash in the three months ended June 30, 2025 were the net loss of $2.2 million and a decrease of $1.7 million in accrued expenses and other liabilities.

The decrease in accrued expenses and other liabilities was primarily related to payment made for a production mask set for our APU2 that was accrued at March 31, 2025.

The primary source of cash in the three months ended June 30, 2025 was a reduction in accounts receivable of $1.6 million.

The primary sources of cash in the three months ended June 30, 2024 were net income of $1.1 million and decreases of $419,000 in inventories and $408,000 in accounts receivable.

The primary uses of cash in the three months ended June 30, 2024 were a reduction in accrued expenses and other liabilities of $1.2 million and an increase of $278,000 in prepaid expenses and other current assets.

The primary reason for the use of cash from operations in the quarter ended June 30, 2024 was an adjustment for the gain on the sale and leaseback transaction that was finalized during the quarter in the amount of $5.7 million.

Net cash provided by (used in) investing activities was ($21,000) in the three months ended June 30, 2025 compared to $11.3 million in the three months ended June 30, 2024.

Investment activities in the three months ended June 30, 2025 primarily consisted of the purchase of property and equipment of $21,000.

Investment activities in the three months ended June 30, 2024 primarily consisted of the net proceeds of $11.3 million from the sale and leaseback transaction discussed above, partially offset by the purchase of property and equipment of $32,000.

Net cash provided by financing activities in the three months ended June 30, 2025 primarily consisted of the net proceeds from the sale of common stock pursuant to an At-the-Market offering of $10.8 million and the proceeds from the sale of common stock pursuant to our employee stock plans of $226,000.

Net cash provided by financing activities in the three months ended June 30, 2024 consisted of the proceeds from the sale of common stock pursuant to our employee stock plans of $296,000.

As of September 30, 2025, our principal sources of liquidity were cash and cash equivalents of $25.3 million compared to cash and cash equivalents $13.4 million as of March 31, 2025.

Net cash used in operating activities was $2.6 million for the six months ended September 30, 2025 compared to $7.7 million for the six months ended September 30, 2024.

The primary uses of cash in the six months ended September 30, 2025 were the net loss of $5.4 million and a decrease of $1.9 million in accrued expenses.

The primary sources of cash in the six months ended September 30, 2025 were reductions in accounts receivable and prepaid expenses and other current assets.

Cash from operations in the six months ended September 30, 2024 was adjusted for the non-cash gain on the sale and leaseback transaction in the amount of $5.7 million.

The primary uses of cash in the six months ended September 30, 2024 were the net loss of $4.4 million and a decrease of $1.6 million in accrued expenses.

The primary sources of cash in the six months ended September 30, 2024 were reductions in accounts receivable, inventories and prepaid expenses and other current assets.

Cash from operations in the six months ended September 30, 2024 was adjusted for the non-cash gain on the sale and leaseback transaction in the amount of $5.7 million.

Net cash provided by (used in) investing activities was $40,000 in the six months ended September 30, 2025 compared to $11.3 million in the six months ended September 30, 2024.

Investment activities in the six months ended September 30, 2025 primarily consisted of the purchase of property and equipment of $40,000.

Investment activities in the six months ended September 30, 2024 primarily consisted of the net proceeds of $11.3 million from the sale and leaseback transaction discussed above, partially offset by the purchase of property and equipment of $38,000.

Net cash provided by financing activities in the six months ended September 30, 2025 consisted of the proceeds from the sale of common stock pursuant to an At-the-Market offering of $14.3 million and the proceeds from the sale of common stock pursuant to our employee stock plans of $263,000.

Net cash provided by financing

activities in the six months ended September 30, 2024 consisted of the proceeds from the sale of common stock pursuant to our employee stock plans of $373,000.

We believe that our existing balances of cash and cash equivalents will be sufficient to meet our cash needs for working capital and capital expenditures for at least the next 12 months.

Our future capital requirements will depend on many factors, including revenue growth, if any, that we experience, any additional manufacturing cost increases resulting from supply constraints and the continuation of the impact of higher interest rates and inflation may have on our business, the extent to which we utilize subcontractors, the levels of inventory and accounts receivable that we maintain, the timing and extent of spending to support our product development efforts and the expansion of our sales and marketing team.

Our future capital requirements will depend on many factors, including revenue growth, if any, that we experience, any additional manufacturing cost increases resulting from supply constraints and the continuation of the impact of inflation may have on our business, the extent to which we utilize subcontractors, the levels of inventory and accounts receivable that we maintain, the timing and extent of spending to support our product development efforts and the expansion of our sales and marketing team.

Additional capital may also be required for the consummation of any acquisition of businesses, products or technologies that we may undertake.

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The Sales Agreement provides that we may offer and sell our common stock having an aggregate offering price of up to $25.0 million from time to time (the “Offering”) through Needham, acting as our sales agent.

In May and June 2025, we sold 3,380,773 shares pursuant to the Offering at an average price of $3.32 for proceeds of $11.2 million, less offering costs of $411,000.

We cannot assure that additional equity or debt financing, if required, will be available on terms that are acceptable or at all.

As of June 30, 2025, we had $13.4 million in purchase obligations for facility leases, wafer, software and test purchase obligations that are binding commitments of which $2.0 million are payable in the next twelve months and $11.4 million are committed in the long term.

Between May and August 2025, we sold 4,508,350 shares pursuant to the Offering at an average price of $3.29 for proceeds of $14.8 million, less offering costs of $573,000.

On October 21, 2025, we entered into a securities purchase agreement (the “Purchase Agreement”) with an investor (the “Purchaser”) pursuant to which we agreed to issue and sell, in a registered direct offering (the “Registered Direct Offering”) an aggregate of (i) 1,508,462 shares (the “Shares”) of our common stock, $0.001 par value per share (the “Common Stock”) at a price of $10.00 per Share and (ii) pre-funded warrants to purchase 3,491,538 shares of Common Stock (the “Pre-Funded Warrants” and, collectively with the Shares, the “Offered Securities”).

Each of the Pre-Funded Warrants is exercisable for one share of Common Stock at the exercise price of $0.01 per Pre-Funded Warrant, immediately exercisable, and may be exercised at any time.

The Purchaser’s ability to exercise its Pre-Funded Warrants in exchange for shares of Common Stock is subject to certain beneficial ownership limitations set forth therein.

The gross proceeds to us from the Registered Direct Offering were approximately $50 million, before deducting offering expenses payable by of approximately $3.0 million.

The Registered Direct Offering closed on October 22, 2025.

We cannot assure you that additional equity financing or debt financing, if required, will be available on terms that are acceptable or at all.

As of September 30, 2025, we had $13.2 million in purchase obligations for facility leases, wafer, software and test purchase obligations that are binding commitments of which $1.9 million are payable in the next twelve months and $11.3 million are committed in the long term.

In connection with the acquisition of MikaMonu on November 23, 2015, we are required to make contingent consideration payments to the former MikaMonu shareholders conditioned upon revenue targets for products based on the MikaMonu technology.

As of June 30, 2025, the accrual for potential contingent consideration was $0.

As of September 30, 2025, the accrual for potential contingent consideration was $0.

Critical Accounting Estimates

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Off-Balance Sheet Arrangements

At June 30, 2025, we did not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

At September 30, 2025, we did not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Accordingly, we are not exposed to the type of financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis