What changed in this filing

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Item 1A. Risk Factors

2025-11-07 compared with 2025-08-08 · 75 added, 63 removed, 407 unchanged (25% of the section changed)

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If these customers, or any of our other major customers, reduces the amount they purchase, stops purchasing our products or fails to pay us, our financial position and operating results will suffer.

● We are reliant on U.S.

Government Funding and government shutdowns may materially adversely affect our business and results of operations.

● We cannot assure you that our ongoing evaluation of strategic alternatives will result in any particular outcome, and the perceived uncertainties related to GSI Technology could adversely affect our business and our shareholders.

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● Our future success is substantially dependent on the successful introduction of new in-place associative computing products which entails significant risks.

● Higher interest rates, worldwide inflationary pressures, increased or new tariffs, trade disputes and restrictions, increasing geopolitical tensions, the evolving conflict in Israel, the military conflict in Ukraine, and the decline in the global economic environment may adversely affect our revenues, results of operations and financial condition.

● Worldwide inflationary pressures, increased or new tariffs, trade disputes and restrictions, increasing geopolitical tensions, the military conflict in Ukraine, and the challenging global economic environment may adversely affect our revenues, results of operations and financial condition.

● We have incurred significant losses and may incur losses in the future.

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● If we are unable to offset increased wafer fabrication and assembly costs, our gross margins will suffer.

● We are subject to the highly cyclical nature of the networking and telecommunications markets.

● We rely heavily on distributors and our business will be negatively impacted if we are unable to develop and manage distribution channels and accurately forecast future sales through our distributors.

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If we are unable to recruit or retain qualified personnel, our business could be harmed.

● The successful commercialization of our Gemini-II product and development of our Plato product depends on our ability to attract and retain software engineering talent.

● Systems issues, data protection and cyber-attacks could disrupt our internal operations or the operations of our business partners, and any such disruption could harm our business.

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Risks Related to Our International Business and Operations

● The international political, social and economic environment, including the imposition of tariffs and resulting consequences and the risks for escalating military conflicts, particularly relating to Israel and Taiwan, may affect our business performance.

● Governmental export and import controls could impair our ability to compete in international markets or subject us to liability if we violate the controls.

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Our quarterly and annual revenues, expenses and operating results have varied significantly and are likely to vary in the future.

For example, in the nine fiscal quarters ended June 30, 2025, we recorded net revenues of as much as $6.3 million and as little as $4.6 million, and in eight of those quarters, operating losses from $2.2 million to $6.7 million.

For example, in the ten fiscal quarters ended September 30, 2025, we recorded net revenues of as much as $6.4 million and as little as $4.6 million, and in nine of those quarters, operating losses from $2.2 million to $6.7 million.

We therefore believe that period-to-period comparisons of our operating results are not a good indication of our future performance, and you should not rely on them to predict our future performance or the future performance of our stock price.

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Factors that may affect periodic operating results in the future include:

● commercial acceptance of our associative computing products;

● commercial acceptance of our associative computing products, including Gemini-II and Plato;

● commercial acceptance of our RadHard and RadTolerant products;

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● changes in our product pricing policies, including those made in response to new product announcements, pricing changes of our competitors and price increases by our foundry and suppliers;

● continued funding from U.S.

government programs, including Small Business Innovation Research (“SBIR”) grants, to support our research and development activities;

● our ability to anticipate and conform to new industry standards;

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If our operating results in future quarters fall below the expectations of market analysts and investors, the price of our common stock could fall.

Higher interest rates, worldwide inflationary pressures, increased or new tariffs, trade disputes and restrictions, increasing geopolitical tensions, the evolving conflict in Israel, the military conflict in Ukraine, and the decline in the global economic environment have caused increased stock market volatility and uncertainty in customer demand and the worldwide economy in general, and we may continue to experience decreased sales and revenues in the future.

We expect such impact will in particular affect our SRAM sales and has also impacted the launch of our APU product to some degree and the adoption of RadHard and RadTolerant SRAM products by aerospace and military customers.

Worldwide inflationary pressures, increased or new tariffs, trade disputes and restrictions, increasing geopolitical tensions, the military conflict in Ukraine, and the challenging global economic environment have caused increased stock market volatility and uncertainty in customer demand and the worldwide economy in general, and we may continue to experience decreased sales and revenues in the future.

We expect such impact will in particular affect our SRAM sales and has also impacted the launch of our APU products to some degree and the adoption of RadHard and RadTolerant SRAM products by aerospace and military customers.

However, the magnitude of such impact on our business and its duration is highly uncertain.

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If we fail to continue to sell to our key OEM customers, distributors or contract manufacturers in sufficient quantities, our business could be harmed.

We are reliant on U.S.

Government Funding, and Government Shutdowns May Materially Adversely Affect Our Business and Results of Operations.

We rely on funding from U.S.

government programs, including SBIR grants, to support our research and development activities.

Our ability to obtain, execute, and receive payment under SBIR awards depends on the timely operation and funding of the federal agencies that administer these programs.

Any lapse in appropriations, government shutdown, continuing resolution, or other disruption to government operations may result in delays to award decisions, the suspension of work, the issuance of stop-work orders, the deferral or reduction of payments, slower invoice processing, and the postponement of new solicitations.

Prolonged or repeated shutdowns could materially adversely affect our revenues, cash flows, and the timing of our research and development milestones, and may require us to curtail or reprioritize programs.

Even after a shutdown ends, backlogs and administrative delays can persist, causing extended uncertainty around award timing and payment.

If SBIR or related agency budgets are reduced, reallocated, or subject to sequestration, we may experience decreased funding availability that could materially impact our operations, financial condition, and prospects.

We cannot assure you that our ongoing evaluation of strategic alternatives will result in any particular outcome, and the perceived uncertainties related to the Company could adversely affect our business and our stockholders.

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Any potential transaction may be dependent on a number of factors that may be beyond our control, for example, market conditions, industry trends or acceptable terms.

The process of

reviewing potential strategic alternatives may be time consuming, distracting and disruptive to our business operations.

The process of reviewing potential strategic alternatives may be time consuming, distracting and disruptive to our business operations.

In addition, given that the exploration of strategic alternatives may eventually result in a potential sale, merger or other strategic transaction, any perceived uncertainty regarding our future operations or employment needs may limit our ability to retain or hire qualified personnel and may contribute to unplanned loss of highly skilled employees through attrition, and result in the loss of customers, suppliers and other key business partners.

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Any decrease in revenues from sales of our Very Fast SRAM products or failure to achieve the revenue goals for our in-place associative computing products and services could result in revenue shortfalls that would leave our business with inadequate cash to finance operations.

Our future success is substantially dependent on the successful introduction of new in-place associative computing products which entails significant risks.

Our future success is substantially dependent on the successful introduction of new in-place associative computing products, including Gemini-I, Gemini-II and Plato, which entails significant risks.

Since 2015, our principal strategic objective has been the development of our in-place associative computing products.

We have devoted, and will continue to devote, substantial efforts and resources to the development of our new family of in-place associative computing products.

This ongoing project involves the commercialization of new, cutting-edge technology, will require a continuing substantial effort during fiscal 2026 and beyond and will be subject to significant risks.

In addition to the typical risks associated with the development of technologically advanced products, this project will be subject to enhanced risks of technological problems related to the development of this entirely new category of products, substantial risks of delays or unanticipated costs that may be encountered, and risks associated with the establishment of entirely new markets and customer and partner relationships.

We have devoted, and will continue to devote, substantial efforts and resources to the development of our new family of in-place associative computing products, including Gemini-I, Gemini-II and Plato.

This ongoing project includes achieving customer acceptance of Gemini-I, the commercialization of Gemini-II and development of new, cutting-edge technology for Plato, and will require a continuing substantial effort during fiscal 2026 and beyond and will be subject to significant risks.

In addition to the typical risks associated with the development of technologically advanced products, the achievement of customer acceptance of Gemini-I, the commercialization of Gemini-II and development of Plato will be subject to enhanced risks of technological problems related to the development of this entirely new category of products, substantial risks of delays or unanticipated costs that may be encountered, and risks associated with the establishment of entirely new markets and customer and partner relationships.

The establishment of new customer and partner relationships and selling our in-place associative computing products to such new customers is a significant undertaking that requires us to invest heavily in our sales team, enter into new channel partner relationships, expand our marketing activities and change the focus of our business and operations.

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Additionally, if we are unable to meet the expectations of market analysts and investors with respect to this major product introduction effort, then the price of our common stock could fall

Higher interest rates, increased or new tariffs, trade disputes and restrictions, worldwide inflationary pressures, increasing geopolitical tensions, the evolving conflict in Israel, the military conflict in Ukraine, and the resulting decline in the global economic environment are expected to adversely affect our revenues, results of operations and financial condition.

Our business is expected to be materially adversely affected by higher interest rates, increased or new tariffs, trade disputes and restrictions, worldwide inflationary pressures, increasing geopolitical tensions, the

evolving conflict in Israel and the military conflict in Ukraine, all of which are contributing to a decline in the global economic environment.

Our quarterly revenues have been flat and other than the quarters ended December 31, 2024, March 31, 2025 and June 30, 2025, have trended downward due to the decline in the global economic environment that has resulted in less demand for our products.

We expect that a continued rise in interest rates, increased or new tariffs trade disputes and restrictions, continued inflationary pressures, increasing geopolitical tensions, the evolving conflict in Israel , continued uncertainties in the business climate caused by the military conflict in Ukraine will adversely impact demand for new and existing products, and to impact the mindset of potential commercial partners to launch new products using our technology.

The resulting decline in the global economic environment is expected to have an adverse impact on our business and financial condition.

Disruptions in the capital and financial markets as a result of higher interest rates, increased or new tariffs, trade disputes and restrictions, worldwide inflationary pressures, increasing geopolitical tensions, the evolving conflict in Israel, the military conflict in Ukraine, and the decline in the global economic environment may also adversely affect our ability to obtain additional liquidity should the impacts of a decline in the global economic environment continue for a prolonged period.

Increased or new tariffs, trade disputes and restrictions, worldwide inflationary pressures, increasing geopolitical tensions, the military conflict in Ukraine, and the resulting challenging global economic environment are expected to adversely affect our revenues, results of operations and financial condition.

Our business is expected to be materially adversely affected by increased or new tariffs, trade disputes and restrictions, worldwide inflationary pressures, increasing geopolitical tensions and the military conflict in Ukraine, all of which are contributing to a challenging global economic environment.

We expect that a continued rise in interest rates, increased or new tariffs, trade disputes and restrictions, continued inflationary pressures, increasing geopolitical tensions, continued uncertainties in the business climate caused by the military conflict in Ukraine will adversely impact demand for new and existing products, and to impact the mindset of potential commercial partners to launch new products using our technology.

The resulting challenging global economic environment is expected to have an adverse impact on our business and financial condition.

Disruptions in the capital and financial markets as a result of increased or new tariffs, trade disputes and restrictions, worldwide inflationary pressures, increasing geopolitical tensions, the military conflict in Ukraine, and the challenging global economic environment may also adversely affect our ability to obtain additional liquidity should the impacts of a challenging global economic environment continue for a prolonged period.

We have incurred significant losses and may incur losses in the future.

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Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud.

Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations.

Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to

fail to meet our reporting obligations.

In addition, any testing by us conducted in connection with Section 404(a) of the Sarbanes-Oxley Act, or any testing by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement.

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If the carrying value of a material asset is determined to be impaired, it will be written down to fair value by a charge to operating earnings.

As of March 31, 2025 and June 30, 2025, we had a goodwill balance of $8.0 million and intangible assets of $1.3 million, respectively, from the MikaMonu acquisition.

As of March 31, 2025 and September 30, 2025, we had a goodwill balance of $8.0 million and intangible assets of $1.2 million, respectively, from the MikaMonu acquisition.

An adverse change in market conditions, including a sustained decline in our stock price, loss of significant customers, or a weakened demand for our products could be considered to be an impairment triggering event.

If such change has the effect of changing one of our critical assumptions or estimates, a change to the estimation of fair value could result in an impairment charge to our goodwill or intangible assets, which would negatively impact our operating results and harm our business.

There were no impairment indicators at March 31, 2025 or June 30, 2025.

There were no impairment indicators at March 31, 2025 or September 30, 2025.

We are dependent on a number of single source suppliers, and if we fail to obtain adequate supplies, our business will be harmed and our prospects for growth will be curtailed.

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As a result, the loss or failure to perform by any of these suppliers could adversely affect our business and operating results.

Should any of our single source suppliers experience manufacturing failures or yield shortfalls, be disrupted by natural disaster, military action or political instability, choose to prioritize capacity or inventory for other uses or reduce or eliminate deliveries to us for any other reason, we likely will not be able to enforce fulfillment of any delivery commitments and we would have to identify and qualify acceptable replacements from alternative sources of supply.

reduce or eliminate deliveries to us for any other reason, we likely will not be able to enforce fulfillment of any delivery commitments and we would have to identify and qualify acceptable replacements from alternative sources of supply.

In particular, if TSMC is unable to supply us with sufficient quantities of wafers to meet all of our requirements, we would have to allocate our products among our customers, which would constrain our growth and might cause some of them to seek alternative sources of supply.

Since the manufacturing of wafers and other components is extremely complex, the process of qualifying new foundries and suppliers is a lengthy process and there is no assurance that we would be able to find and qualify another supplier without materially adversely affecting our business, financial condition and results of operations.

If we do not successfully develop new products to respond to rapid market changes due to changing technology and evolving industry standards, particularly in the networking and telecommunications markets, our business will be harmed.

If we do not successfully develop new products to respond to rapid market changes due to changing technology and evolving industry standards, our business will be harmed.

If we fail to offer technologically advanced products and respond to technological advances and emerging standards, we may not generate sufficient revenues to offset our development costs and other expenses, which will hurt our business.

The development of new or enhanced products is a complex and uncertain process that requires the accurate anticipation of technological and market trends.

In particular, the networking and telecommunications markets are rapidly evolving, and new standards are emerging.

We are vulnerable to advances in technology by competitors, including new SRAM architectures, new forms of DRAM and the emergence of new memory technologies that could enable the development of products that feature higher performance or lower cost.

In addition, the trend toward incorporating SRAM into other chips in the networking and telecommunications markets

has the potential to reduce future demand for Very Fast SRAM products.

In addition, the trend toward incorporating SRAM into other chips in the networking and telecommunications markets has the potential to reduce future demand for Very Fast SRAM products.

We may experience development, marketing and other technological difficulties that may delay or limit our ability to respond to technological changes, evolving industry standards, competitive developments or end-user requirements.

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If we are unable to offset these increased costs by increasing the average selling prices of our products, our gross margins will decline.

We are subject to the highly cyclical nature of the networking and telecommunications markets.

Our Very Fast SRAM products are incorporated into routers, switches, wireless local area network infrastructure equipment, wireless base stations and network access equipment used in the highly cyclical networking and telecommunications markets.

We expect that the networking and telecommunications markets will continue to be highly cyclical, characterized by periods of rapid growth and contraction.

Our business and our operating results are likely to fluctuate, perhaps quite severely, as a result of this cyclicality.

The market for Very Fast SRAMs is highly competitive.

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A significant percentage of our sales are made to distributors and to contract manufacturers who incorporate our products into end products for OEMs.

For example, in the three months ended June 30, 2025 and in fiscal 2025, 2024 and 2023, our largest distributor Avnet Logistics accounted for 71.5%, 49.6%, 50.6% and 48.1%, respectively, of our net revenues.

For example, in the six months ended September 30, 2025 and in fiscal 2025, 2024 and 2023, our largest distributor Avnet Logistics accounted for 68.8%, 49.6%, 50.6% and 48.1%, respectively, of our net revenues.

Avnet Logistics and our other existing distributors may choose to devote greater resources to marketing and supporting the products of other companies.

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To reduce our costs, we may be required to implement design changes that lower our manufacturing costs, negotiate reduced purchase prices from our independent foundries and our independent assembly and test vendors, and successfully manage our manufacturing and subcontractor relationships.

Because we do not operate our own wafer foundry or assembly facilities, we may not be able to reduce our costs as rapidly as companies that operate their own foundries or facilities.

Because we do not operate our own wafer

foundry or assembly facilities, we may not be able to reduce our costs as rapidly as companies that operate their own foundries or facilities.

We are substantially dependent on the continued services and performance of our senior management and other key personnel.

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Avidan Akerib, our Vice President of Associative Computing, any other executive officer or other key employee could significantly delay or prevent the achievement of our development and strategic objectives.

We do not have

employment contracts with, nor maintain key person insurance on, any of our executive officers or other key employees.

We do not have employment contracts with, nor maintain key person insurance on, any of our executive officers or other key employees.

The successful commercialization of our Gemini-II product and development of our Plato product depends on our ability to attract and retain software engineering talent.

Our success depends heavily on our ability to attract, hire, develop, and retain highly qualified software engineers and other technical personnel, including those with specialized expertise necessary for the commercialization of our Gemini-II product and for ongoing development of our Plato product.

The market for skilled software engineers—particularly those with experience in distributed systems, AI/ML, cloud-native architectures, security, and full-stack development—is intensely competitive, and larger, better-capitalized technology companies and high-growth private companies often have significantly greater resources, brand recognition, compensation flexibility, and equity value propositions than we do.

As a small public company, we face particular challenges in recruiting and retaining top talent, including constraints on cash compensation, benefits, and training budgets;

volatility in our stock price that may diminish the perceived value of equity awards;

and concerns among candidates regarding our scale, financial resources, and long-term prospects.

If we are unable to attract and retain the engineering talent required to meet our product milestones, we could experience delays in Gemini-II commercialization, including failure to complete critical features, integrations, performance optimizations, reliability enhancements, and compliance or certification requirements necessary for market launch and adoption.

Similarly, insufficient staffing or turnover within our research and development function could slow or derail the Plato product roadmap, reduce the pace of innovation, and impair our ability to validate core technologies, generate defensible intellectual property, and respond to evolving market and customer requirements.

Any material delay or shortfall in engineering capacity could increase development costs, force us to reduce scope or quality, or require greater reliance on third-party contractors or offshore vendors, which may introduce coordination challenges, security risks, IP ownership or confidentiality concerns, and variability in deliverable quality and timelines.

Failure to attract and retain the requisite engineering talent could have a material adverse effect on our business, financial condition, operating results, and prospects.

It could lead to missed commercialization windows for Gemini-II, reduced customer satisfaction and adoption, inability to achieve expected performance or compliance standards, slower progress on Plato’s research and development objectives, loss of competitive advantage, and ultimately reduced revenue growth.

Persistent talent gaps could also necessitate changes to our product strategy, impair the value of our technology assets, and increase the risk that we will not achieve our planned milestones or that we will need to raise additional capital on unfavorable terms, any of which could adversely our business.

System security risks, data protection, cyber-attacks and systems integration issues could disrupt our internal operations or the operations of our business partners, and any such disruption could harm our reputation or cause a reduction in our expected revenue, increase our expenses, negatively impact our results of operation or otherwise adversely affect our stock price.

Security breaches, computer malware and cyber-attacks have become more prevalent and sophisticated and may increase in the future due to a number of our employees working from home and the potential for retaliatory cyber-attacks as a result of the military conflict in Ukraine.

cyber-attacks as a result of the military conflict in Ukraine.

Experienced computer programmers and hackers may be able to penetrate our network security or the network security of our business partners, and misappropriate or compromise our confidential and proprietary information, create system disruptions or cause shutdowns.

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A small number of customers generally account for a significant portion of our accounts receivable in any period, and if any one of them fails to pay us, our financial position and operating results will suffer.

At June 30, 2025, four customers accounted for 31%, 19%, 17% and 12% of our accounts receivable, respectively.

At September 30, 2025, two customers accounted for 45% and 30% of our accounts receivable, respectively.

If any of these customers do not pay us, our financial position and operating results will be harmed.

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Activist stockholders or others may create perceived uncertainties as to the future direction of our business or strategy which may be exploited by our competitors and may make it more difficult to attract and retain qualified personnel and potential customers, and may affect our relationships with current customers, vendors, investors, and other third parties.

In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management

and our board of directors.

The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities.

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Other than the MikaMonu and Sony acquisitions, we have not made any such acquisitions or investments, and therefore our experience as an organization in making such acquisitions and investments is limited.

In connection with the MikaMonu acquisition, we are subject to risks related to potential problems, delays or unanticipated costs that may be encountered in the development of products based on the MikaMonu technology and the establishment of new markets and customer relationships for the potential new products.

In connection with the MikaMonu acquisition, we are subject to risks related

to potential problems, delays or unanticipated costs that may be encountered in the development of products based on the MikaMonu technology and the establishment of new markets and customer relationships for the potential new products.

In addition, in connection with any future acquisitions or investments we may make, we face numerous other risks, including:

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Competition for these individuals is intense, and we may not be able to successfully recruit, assimilate or retain sufficiently qualified personnel.

We may encounter difficulties in recruiting and retaining a sufficient number of qualified engineers, which could harm our ability to develop new products and adversely impact our relationships with existing and future end-users at a critical stage of development.

We may encounter difficulties in recruiting and retaining a sufficient number of qualified engineers, including those needed for the development and commercialization of our Gemini-II and Plato products.

Any difficulties recruiting and retaining engineers could harm our ability to develop new products such as Gemini-II and Plato and adversely impact our relationships with existing and future end-users at a critical stage of development.

The failure to recruit and retain necessary technical, managerial, sales, marketing and administrative personnel could harm our business and our ability to obtain new customers and develop new products.

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There has been significant litigation in the semiconductor industry involving patents and other intellectual property rights.

We were previously involved in protracted patent infringement litigation, and we could become subject to additional claims or litigation in the future as a result of allegations that we infringe others’ intellectual

property rights or that our use of intellectual property otherwise violates the law.

Claims that our products infringe the proprietary rights of others would force us to defend ourselves and possibly our customers, distributors or manufacturers against the alleged infringement.

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We are endeavoring to expand our business, and any growth that we are successful in achieving could place a significant strain on our management systems, infrastructure and other resources.

To manage the potential growth of our operations and resulting increases in the number of our personnel, we will need to invest the necessary capital to continue to improve our operational, financial and management controls and our reporting systems and

Our controls, systems and procedures may prove to be inadequate should we experience significant growth.

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Our offerings are subject to export controls and economic sanctions laws and regulations that prohibit the delivery of certain solutions and services without the required export authorizations or export to locations, governments, and persons targeted by applicable sanctions.

While we have processes to prevent our offerings from

being exported in violation of these laws, including obtaining authorizations as appropriate and screening against U.S.

While we have processes to prevent our offerings from being exported in violation of these laws, including obtaining authorizations as appropriate and screening against U.S.

government and international lists of restricted and prohibited persons, we cannot guarantee that these processes will prevent all violations of export control and sanctions laws.

If our channel distributors fail to obtain appropriate import, export, or re-export licenses or permits, we may also be adversely affected, through reputational harm as well as other negative consequences including government investigations and penalties.

investigations and penalties.

We presently incorporate export control and sanctions compliance requirements in our channel distributor agreements.

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If any of these changes were to occur, our business could be harmed, and our stock price could decline.

The software development for our associative computing products occurs in Israel, and therefore our business performance and operations may be adversely affected by military conflict in Israel.

Our software development and certain regional sales activities for our APU product offerings occur in Israel.

Our Vice President, Associative Computing, along with a team of software development experts are based in our Israel facility.

This team is needed for the development of software required in the use of our APU product offering.

Proof of concept customers for our SAR imagine processing acceleration system are also based in Israel.

We are closely monitoring the evolving military conflict in Israel, including potential impacts to our business, customers, employees and operations in Israel.

At this time, the impact on GSI Technology is uncertain and subject to change given the volatile nature of the situation, but adverse changes in the military conditions in Israel could harm our business and our stock price could decline.

Our international business exposes us to additional risks.

Products shipped to destinations outside of the United States accounted for 28.8%, 60.3%, 47.3% and 51.4% of our net revenues in the three months ended June 30, 2025 and in fiscal 2025, 2024 and 2023, respectively.

Moreover, a substantial portion of our products is manufactured and tested in Taiwan, and the software development for our associative computing products occurs in Israel where there is an evolving military conflict.

Products shipped to destinations outside of the United States accounted for 38.0%, 60.3%, 47.3% and 51.4% of our net revenues in the six months ended September 30, 2025 and in fiscal 2025, 2024 and 2023, respectively.

Moreover, a substantial portion of our products are manufactured and tested in Taiwan and the software development for our associative computing products occurs in Israel where there is an evolving military conflict.

We intend to continue expanding our international business in the future.

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Any action to materially modify international trade agreements, change corporate tax policy related to international commerce or mandate domestic production of goods, could adversely affect our business, financial condition and results of operations.

Some of our products are incorporated into advanced military electronics, and changes in international geopolitical circumstances and domestic budget considerations may hurt our business.

Some of our products are incorporated into advanced military electronics, and changes in international geopolitical circumstances, domestic budget considerations and government shutdowns may hurt our business.

Some of our products are incorporated into advanced military electronics such as radar and guidance systems.

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military operations around the world are scaled back, demand for our products for use in military applications may decrease, and our operating results could suffer.

Domestic budget considerations may also adversely affect our operating results.

For example, if governmental appropriations for military purchases of electronic devices that include our products are reduced, our revenues will likely decline.

Domestic budget considerations and government shutdowns may also adversely affect our operating results.

For example, if governmental appropriations for military purchases of electronic devices that include our products are reduced or delayed due to shutdowns, our revenues will likely decline.

TSMC, as well as our other independent suppliers and many of our OEM customers, have operations in the Pacific Rim, an area subject to significant risk of earthquakes, typhoons and other natural disasters and adverse consequences related to the outbreak of contagious diseases.

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● market conditions in our industry, the industries of our customers and the economy as a whole.

In recent years, the stock market in general, and the market for technology stocks in particular, have experienced extreme price fluctuations, which have often been unrelated to the operating performance of affected

The market price of our common stock might experience significant fluctuations in the future, including fluctuations unrelated to our performance.

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We may need to raise additional capital in the future, which may not be available on favorable terms or at all, and which may cause dilution to existing stockholders.

We may need to seek additional funding in the future.

While we recently raised approximately $50 million in gross proceeds through a registered direct offering, we may need to seek additional funding in the future.

We do not know if we will be able to obtain additional financing on favorable terms, if at all.

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Our executive officers, directors and entities affiliated with them hold a substantial percentage of our common stock.

As of July 31, 2025 , our executive officers, directors and entities affiliated with them beneficially owned approximately 25% of our outstanding common stock.

As of October 31, 2025 , our executive officers, directors and entities affiliated with them beneficially owned approximately 21% of our outstanding common stock.

As a result, these stockholders will be able to exercise substantial influence over, and may be able to effectively control, matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, which could have the effect of delaying or preventing a third party from acquiring control over or merging with us.

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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-Q

Item 1A. Risk Factors