What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-04 compared with 2022-08-05 · 124 added, 104 removed, 380 unchanged (38% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEET S

September 30,

(In thousands, except share

37 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATION S

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

(In thousands, except per share amounts)

Cost of revenues ($ 140 , $ 67 , $ 197 and $ 80 to a related party)

5 unchanged sentences

Interest income, net

Other income (expense), net

Other expense, net

Loss before income taxes

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

(In thousands)

Net unrealized loss on available-for-sale investments

(In thousands)

Net unrealized gain (loss) on available-for-sale investments

Total comprehensive loss

4 unchanged sentences

Stockholders'

Three months ended June 30, 2022

Income (Loss)

Three months ended September 30, 2022

(In thousands, except share amounts)

Balance, June 30, 2022

Stock-based compensation expense

Net unrealized gain on available-for-sale investments

Balance, September 30, 2022

Three months ended September 30, 2021

Balance, June 30, 2021

Issuance of common stock under employee stock option plans

Stock-based compensation expense

Net unrealized loss on available-for-sale investments

Balance, September 30, 2021

Comprehensive

Stockholders'

Income (Loss)

Six months ended September 30, 2022

(In thousands, except share amounts)

Balance, March 31, 2022

2 unchanged sentences

Net unrealized loss on available-for-sale investments

Balance, June 30, 2022

Three months ended June 30, 2021

Balance, September 30, 2022

Six months ended September 30, 2021

Balance, March 31, 2021

2 unchanged sentences

Net unrealized loss on available-for-sale investments

Balance, June 30, 2021

Balance, September 30, 2021

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW S

Three Months Ended June 30,

Six Months Ended September 30,

(In thousands)

4 unchanged sentences

Non-cash lease expense

Change in fair value of contingent consideration

Depreciation and amortization

8 unchanged sentences

Cash flows from investing activities:

Purchase of investments

Maturities of short-term investments

4 unchanged sentences

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of the period

16 unchanged sentences

However, these financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022.

The consolidated results of operations for the three months ended June 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year.

The consolidated results of operations for the six months ended September 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year.

Reclassifications

Certain amounts in the fiscal 2022 condensed consolidated financial statements have been reclassified to conform to the fiscal 2023 presentation.

Significant accounting policies

1 unchanged sentence

Risk and uncertainties

The COVID-19 pandemic has affected the business activities of the Company, its customers, suppliers and other business partners.

The COVID-19 global pandemic has affected the business activities of the Company, its customers, suppliers and other business partners.

Governments in affected regions have implemented, and may continue to implement, safety precautions including quarantines, travel restrictions, business closures, cancellations of public gatherings and other measures as they deem necessary.

3 unchanged sentences

The Company has instituted many preventative measures and is regularly evaluating those measures and others as it continues to better understand its current and future operating environment.

From March 2020 through April 2022, except for the Company’s employees located in Taiwan, the majority of its employees worked from home around the world.

In May 2021, due to a surge in COVID-19 infections in Taiwan, the Company’s Taiwan employees worked from home under alternating schedules, and returned to their offices in July 2021.

The majority of our employees around the world worked from home for extended timeframes due to the pandemic.

The Company maintained a substantial portion of its manufacturing operational capacity at its primary manufacturing support facility located in Hsin Chu, Taiwan where the Company’s suppliers are located and where all of the Company’s products are manufactured.

Since the outbreak of COVID-19, aside from supply chain shortages from the lengthening of lead times for wafers and assembly services and the impact of ongoing and expected price increases, including a 20 % increase in the cost of wafers received in early calendar 2022, the Company has experienced minimal impact, and continues to experience minimal impact, on its manufacturing operations in Taiwan.

Final testing of the Company’s products is conducted in house in both the US and Taiwan.

Since the outbreak of COVID-19, aside from supply chain shortages from the lengthening of lead times for wafers and assembly services and the impact of ongoing and expected price increases, including a 20 % increase in the cost of wafers received in early calendar 2022 and a 6 % increase expected in early calendar 2023, the Company has experienced minimal impact, and continues to experience minimal impact, on its manufacturing operations in Taiwan.

testing of the Company’s products is conducted in house in both the US and Taiwan.

Shipping and receiving operations were maintained by a skeleton crew with minimal impact.

The Company’s revenues were impacted by changes in customer buying patterns and communication limitations related to COVID-19 restrictions that required a significant number of its customer

contacts to work from home.

The Company’s results for the fiscal years ended March 31, 2022 and 2021 demonstrate the challenges that the Company has faced during the COVID-19 global pandemic, which has restricted the activities of the Company’s sales force and distributors, reduced customer demand and caused the postponement of investment in certain customer sectors.

The Company’s revenues were impacted by changes in customer buying patterns and communication limitations related to COVID-19 restrictions that required a significant number of its customer contacts to work from home.

The Company’s results for the fiscal years ended March 31, 2022 and 2021 demonstrated the challenges that the Company has faced during the COVID-19 global pandemic, which has restricted the activities of the Company’s sales force and distributors, reduced customer demand and caused the postponement of investment in certain customer sectors.

These challenges have also impacted the Company as it entered new markets and engaged with target customers to sell its new APU product.

1 unchanged sentence

The Company adapted its sales strategies for the COVID-19 environment, where it could not do face-to-face meetings and conduct secure meetings with government and defense customers.

In addition to the continuing COVID-19 global pandemic, the recent military conflict in Ukraine, the rapid rise in energy prices, worldwide inflationary pressures and rising interest rates may have an adverse impact on the Company’s business and financial condition.

In addition to the continuing COVID-19 global pandemic, the recent military conflict in Ukraine, the rapid rise in energy prices, worldwide inflationary pressures, rising interest rates and decline in the global economic environment may have an adverse impact on the Company’s business and financial condition.

The disruption to the marketplace resulting from the COVID-19 global pandemic that the Company continues to experience is unlike anything the Company has ever had to deal with.

While the Company continues to monitor the business metrics that it has historically used to predict its financial performance, the Company is uncertain as to whether these metrics will operate consistently with its historical experience.

The Company believes that during the next 12 months the COVID-19 pandemic could impact general economic activity and demand in its end markets.

The Company believes that during the next 12 months the COVID-19 global pandemic could impact general economic activity and demand in its end markets.

Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak, if the pandemic continues, it will have an adverse effect on the Company’s results of operations, financial position, including potential impairments, and liquidity in fiscal year 2023.

18 unchanged sentences

The majority of the Company’s customer contracts, which may be in the form of purchase orders, contracts or purchase agreements, contain performance obligations for delivery of agreed upon products.

Delivery of all performance obligations contained within a contract with a customer typically occurs at the same time (or within the same accounting period).

Delivery of all performance obligations contained within a contract with a customer typically occurs at the same time (or within the

same accounting period).

Transfer of control typically occurs at the point at which delivery has occurred, title and the risks and rewards of ownership have passed to the customer, and the Company has a right to payment.

For all transactions apart from consignment sales, the Company will generally recognize revenue upon shipment of the

For consignment sales, revenue is recognized at the time that the product is pulled from consignment warehouses.

For all transactions apart from consignment sales, the Company will generally recognize revenue upon shipment of the product.

For consignment sales, which are infrequent, revenue is recognized at the time that the product is pulled from consignment warehouses.

Because all of the Company’s performance obligations relate to contracts with a duration of less than one year, the Company has elected to apply the optional exemption practical expedient provided in ASC 606 and, therefore, is not required to disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

11 unchanged sentences

The Company estimates its warranty costs based on historical warranty claim experience and includes such costs in cost of revenues.

Warranty costs and the accrued warranty liability were not material as of June 30, 2022.

The majority of the Company’s revenue is derived from sales of SRAM products which represent approximately 97 % and 99 % of total revenues in the three months ended June 30, 2022 and 2021, respectively.

Warranty costs and the accrued warranty liability were not material as of September 30, 2022.

The majority of the Company’s revenue is derived from sales of SRAM products which represent approximately 96 % and 98 % of total revenues in the six months ended September 30, 2022 and 2021, respectively.

Nokia, the Company’s largest customer, purchases products directly from the Company and through contract manufacturers and distributors.

Based on information provided to the Company by its contract manufacturers and distributors, purchases by Nokia represented approximately 15 % and 43 % of the Company’s net revenues in the three months ended June 30, 2022 and 2021, respectively.

Based on information provided to the Company by its contract manufacturers and distributors, purchases by Nokia represented approximately 14 % and 24 % of the Company’s net revenues in the three months ended September 30, 2022 and 2021, respectively, and 14 % and 34 % of the Company’s net revenues in the six months ended September 30, 2022 and 2021, respectively.

See “Note 12 — Segment and Geographic Information” for revenue by shipment destination.

The following table presents the Company’s revenue disaggregated by customer type.

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

(In thousands)

Contract manufacturers

2 unchanged sentences

The following table sets forth the computation of basic and diluted net loss per share:

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

(In thousands, except per share amounts)

Denominators:

6 unchanged sentences

The following shares of common stock underlying outstanding stock options, determined on a weighted average basis, were excluded from the computation of diluted net loss per share as they had an anti-dilutive effect:

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

(In thousands)

Shares underlying options and ESPP shares

NOTE 4—BALANCE SHEET DETAIL

June 30, 2022

September 30, 2022

March 31, 2022

3 unchanged sentences

Inventory at distributors

June 30, 2022

September 30, 2022

March 31, 2022

3 unchanged sentences

Allowances for doubtful accounts and other

June 30, 2022

September 30, 2022

March 31, 2022

4 unchanged sentences

Other prepaid expenses and other current assets

June 30, 2022

September 30, 2022

March 31, 2022

6 unchanged sentences

Accumulated depreciation

Depreciation expense was $ 197,000 and $ 187,000 for the three months ended June 30, 2022 and 2021, respectively.

The following tables summarize the components of intangible assets and related accumulated amortization balances at June 30, 2022 and March 31, 2022 (in thousands):

As of June 30, 2022

Depreciation expense was $ 196,000 and $ 197,000 for the three months ended September 30, 2022 and 2021, respectively, and $ 393,000 and $ 384,000 for the six months ended September 30, 2022 and 2021.

The following tables summarize the components of intangible assets and related accumulated amortization balances at September 30, 2022 and March 31, 2022 (in thousands):

As of September 30, 2022

Intangible assets:

3 unchanged sentences

Product designs

Amortization of intangible assets included in cost of revenues was $ 59,000 and $ 59,000 for the three months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, the estimated future amortization expense of intangible assets in the table above is as follows (in thousands):

Amortization of intangible assets included in cost of revenues was $ 58,000 and $ 58,000 for the three months ended September 30, 2022 and 2021, respectively, and $ 117,000 and $ 117,000 for the six months ended September 30, 2022 and 2021.

The Company reviews identifiable amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable.

Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition.

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

Based on the uncertainty of forecasts, events such as the failure to generate revenue from future product launches could result in impairment in the future.

The Company identified a potential impairment indicator for the finite lived intangible assets and performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows of the asset group to the carrying amount as of March 31, 2022.

The result of the recoverability test indicated that the sum of the expected future cash flows was greater than the carrying amount of the finite lived intangible assets.

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.

As of September 30, 2022, the estimated future amortization expense of intangible assets in the table above is as follows (in thousands):

Fiscal year ending March 31,

2023 (remaining nine months)

June 30, 2022

2023 (remaining six months)

September 30, 2022

March 31, 2022

10 unchanged sentences

The Company assesses goodwill for impairment on an annual basis on the last day of February in the fourth quarter of its fiscal year.

The Company had a goodwill balance of $ 8.0 million as of both March 31, 2022 and June 30, 2022.

The Company had a goodwill balance of $ 8.0 million as of both September 30, 2022 and March 31, 2022.

The goodwill resulted from the acquisition of MikaMonu Group Ltd.

1 unchanged sentence

The Company completed its annual impairment test during the fourth quarter of fiscal 2022 and concluded that there was no impairment, as the fair value of its sole reporting unit exceeded its carrying value.

The Company believes that no triggering event has taken place subsequent to the fiscal 2022 annual assessment.

The Company believes that no triggering event has taken place through September 30, 2022.

However, with the macroeconomic uncertainty and decline in the Company’s stock price, there could be a non-cash charge for impairment in a future period should the decline in stock price subsequent to September 30, 2022 be sustained, due to a potential loss of significant customers, or due to a weakened demand for its products.

As additional facts and circumstances evolve, the Company will continue to observe and assess whether an impairment trigger has occurred.

To the extent it becomes more likely than not that the fair value of the Company is less than its carrying amount, the Company will be required to perform a quantitative impairment test, which may result in a non-cash impairment charge in future periods.

NOTE 6—INCOME TAXES

The current portion and long-term portion of the Company’s unrecognized tax benefits was $ 0 at both June 30, 2022 and March 31, 2022.

As of June 30, 2022, $ 3.6 million of unrecognized tax benefits had been recorded as a reduction to net deferred tax assets.

The current portion and long-term portion of the Company’s income tax liability related to unrecognized tax benefits was $ 0 at both September 30, 2022 and March 31, 2022.

As of September 30, 2022, $ 3.6 million of unrecognized tax benefits had been recorded as a reduction to net deferred tax assets.

Due to historical losses in the U.S., the Company has a full valuation allowance on its U.S.

6 unchanged sentences

Fiscal years 2020, 2021 and 2022 are subject to audit by the Israeli tax authorities.

For the three months ended June 30, 2022 and June 30, 2021, the Company incurred income tax expense (benefit) of $ 60,000 and ($ 172,000 ) on net losses before income taxes of ($ 3.9 million) and ($ 4.4 million), respectively.

For the six months ended September 30, 2022 and September 30, 2021, the Company incurred income tax expense (benefit) of $ 97,000 and ($ 130,000 ) on net losses before income taxes of ($ 7.1 million) and ($ 8.9 million), respectively.

The provision (benefit) was calculated using the annualized effective tax rate method.

The Company’s estimated annual effective income tax rate, including discrete items, was approximately ( 1.49 %) and 0.05 % as of June 30, 2022 and 2021, respectively.

The annual effective tax rates as of June 30, 2022 and 2021 vary from the United States statutory income tax rate primarily due to valuation allowances in the United States, whereby pre-tax losses do not result in the recognition of corresponding income tax benefits and expenses and the foreign tax differential.

The Company’s estimated annual effective income tax rate, including discrete items, was approximately ( 1.69 %) and 0.49 % as of September 30, 2022 and 2021, respectively.

The annual effective tax rates as of September 30, 2022 and 2021 vary from the United States statutory income tax rate primarily due to valuation allowances in the United States, whereby pre-tax losses do not result in the recognition of corresponding income tax benefits and expenses and the foreign tax differential.

NOTE 7—FINANCIAL INSTRUMENTS

5 unchanged sentences

The fair value of available-for-sale securities included in the Level 1 category is based on quoted prices that are readily and regularly available in an active market.

As of June 30, 2022, the Level 1 category included money market funds of $ 13.7 million, which were included in cash and cash equivalents on the Condensed Consolidated Balance Sheets.

As of September 30, 2022, the Level 1 category included money market funds of $ 11.5 million, which were included in cash and cash equivalents on the Condensed Consolidated Balance Sheets.

Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date;

2 unchanged sentences

The fair value of available-for-sale securities included in the Level 2 category is based on the market values obtained from an independent pricing service that were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well-established independent pricing vendors and broker-dealers.

As of June 30, 2022, the Level 2 category included short-term investments of $ 7.9 million and long-term investments of $ 875,000 , which were comprised of certificates of deposit, government and agency securities.

As of September 30, 2022, the Level 2 category included short-term investments of $ 5.4 million and long-term investments of $ 628,000 , which were comprised of certificates of deposit, government and agency securities.

Valuations based on inputs that are unobservable and involve management judgment and the reporting entity’s own assumptions about market participants and pricing.

As of June 30, 2022, the Company’s Level 3 financial instruments measured at fair value on the Condensed Consolidated Balance Sheets consisted of the contingent consideration liability related to the acquisition of MikaMonu.

As of September 30, 2022, the Company’s Level 3 financial instruments measured at fair value on the Condensed Consolidated Balance Sheets consisted of the contingent consideration liability related to the acquisition of MikaMonu.

The fair value of the contingent consideration liability was initially determined as of the acquisition date using unobservable inputs.

4 unchanged sentences

Conversely, changes in the risk-adjusted discount rate would be accompanied by a directionally opposite change in the related fair value measurement and expense.

Subsequent to the acquisition date, at each reporting period, the contingent consideration liability is re-measured to fair value with changes recorded in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

During the most recent re-measurement of the contingent consideration liability as of June 30, 2022, the Company used a risk-adjusted discount rate of approximately 15.9 % to adjust the probability-weighted cash flows to their present value using probabilities ranging from 0 % to 15 % for the remaining contingent events.

The contingent consideration liability is included in contingent consideration, non-current on the Consolidated Balance Sheet at June 30, 2022 and March 31, 2022 in the amount of $ 2.3 million and $ 2.7 million, respectively.

Subsequent to the acquisition date,

at each reporting period, the contingent consideration liability is re-measured to fair value with changes recorded in selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

During the most recent re-measurement of the contingent consideration liability as of September 30, 2022, the Company used a risk-adjusted discount rate of approximately 16.3 % to adjust the probability-weighted cash flows to their present value using probabilities ranging from 0 % to 80 % for the remaining contingent events.

The contingent consideration liability is included in contingent consideration, non-current on the Consolidated Balance Sheet at September 30, 2022 and March 31, 2022 in the amount of $ 1.9 million and $ 2.7 million, respectively.

The fair value of financial assets measured on a recurring basis is as follows (in thousands):

3 unchanged sentences

and Liabilities

June 30, 2022

September 30, 2022

Money market funds

9 unchanged sentences

Contingent consideration

The following table sets forth the changes in fair value of contingent consideration for the three months ended June 30, 2022 and 2021, respectively:

Three Months Ended June 30,

The following table sets forth the changes in fair value of contingent consideration for the six months ended September 30, 2022 and 2021, respectively:

Six Months Ended September 30,

(In thousands)

6 unchanged sentences

Available-for-sale debt securities with maturities greater than twelve months are classified as long-term investments when they are not intended for use in current operations.

Investments in available-for-sale securities are reported at fair value with unrecognized gains (losses), net of tax, as a component of accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets.

The Company had money market funds of $ 13.7 million and $ 16.1 million at June 30, 2022 and March 31, 2022, respectively, included in cash and cash equivalents on the Condensed Consolidated Balance Sheets.

Investments in available-for-sale securities are reported at fair value

with unrecognized gains (losses), net of tax, as a component of accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets.

The Company had money market funds of $ 11.5 million and $ 16.1 million at September 30, 2022 and March 31, 2022, respectively, included in cash and cash equivalents on the Condensed Consolidated Balance Sheets.

The Company monitors its investments for impairment periodically and records appropriate reductions in carrying values when declines are determined to be other-than-temporary.

The following table summarizes the Company’s available-for-sale investments:

June 30, 2022

September 30, 2022

(In thousands)

1 unchanged sentence

Certificates of deposit

Supranational obligations

Total short-term investments

Long-term investments:

Certificates of deposit

Supranational obligations

10 unchanged sentences

Total long-term investments

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous loss position as of June 30, 2022 and March 31, 2022, respectively.

June 30, 2022

September 30, 2022

Less Than 12 Months

12 unchanged sentences

Subject to normal credit risks, the Company has the ability to realize the full value of all these investments upon maturity.

The deferred tax asset related to unrecognized gains and losses on short-term and long-term investments was $ 29,000 and $ 22,000 at June 30, 2022 and March 31, 2022, respectively.

As of June 30, 2022, contractual maturities of the Company’s available-for-sale investments were as follows:

The deferred tax asset related to unrecognized gains and losses on short-term and long-term investments was $ 29,000 and $ 22,000 at September 30, 2022 and March 31, 2022, respectively.

As of September 30, 2022, contractual maturities of the Company’s available-for-sale investments were as follows:

(In thousands)

6 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

June 30, 2022

September 30, 2022

March 31, 2022

6 unchanged sentences

The following table provides the details of lease costs:

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

(In thousands)

Operating lease cost

1 unchanged sentence

The following table provides other information related to leases:

Three Months Ended June 30,

Six Months Ended September 30,

(In thousands)

7 unchanged sentences

Operating leases

The following table provides the maturities of the Company’s operating lease liabilities as of June 30, 2022:

The following table provides the maturities of the Company’s operating lease liabilities as of September 30, 2022:

Operating Lease

(In thousands)

2023 (Remaining nine months)

2023 (Remaining six months)

Total undiscounted future cash flows

11 unchanged sentences

Historically, payments made by the Company under these agreements have not had a material effect on its business, financial condition, cash flows or results of operations.

Product warranties

The Company warrants its products to be free of defects generally for a period of three years .

The Company estimates its warranty costs based on historical warranty claim experience and includes such costs in cost of revenues.

Warranty costs and the accrued warranty liability were not material as of June 30, 2022 and March 31, 2022 and for the three months ended June 30, 2022 or 2021.

NOTE 10—STOCK-BASED COMPENSATION

As of June 30, 2022, 4,629,553 shares of common stock were available for grant under the Company’s Amended and Restated 2016 Equity Incentive Plan.

The following table summarizes the Company’s stock option activities for the three months ended June 30, 2022:

As of September 30, 2022, 4,064,310 shares of common stock were available for grant under the Company’s Amended and Restated 2016 Equity Incentive Plan.

The following table summarizes the Company’s stock option activities for the six months ended September 30, 2022:

Number of Shares

1 unchanged sentence

Balance at March 31, 2022

Balance at June 30, 2022

Balance at September 30, 2022

Options vested and exercisable

Options vested and expected to vest

The weighted average fair value per underlying share of options granted during the three months ended June 30, 2022 and 2021 was $ 1.67 and $ 2.41 , respectively.

Options outstanding by exercise price at June 30, 2022 were as follows:

Options Outstanding

Options Exercisable

Weighted Average

Exercise Price

The following table summarizes stock-based compensation expense by line item in the Condensed Consolidated Statements of Operations, all relating to employee stock plans:

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

(In Thousands)

Cost of revenues

1 unchanged sentence

Selling, general and administrative

As stock-based compensation expense recognized in the Condensed Consolidated Statement of Operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures in accordance with authoritative guidance.

The Company estimates forfeitures at the time of grant and revises the original estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

No tax benefit related to stock-based compensation was recognized in the three months ended June 30, 2022 due to a full valuation allowance.

There were no windfall tax benefits realized from exercised stock options in either of these periods.

Compensation cost capitalized within inventory at June 30, 2022 was immaterial.

As of June 30, 2022, the Company’s total unrecognized compensation cost was $ 4.7 million, which will be recognized over a weighted average period of 2.09 years.

The Company calculated the fair value of stock-based awards in the periods presented using the Black-Scholes option pricing model and the following weighted average assumptions:

Three Months Ended June 30,

Stock Option Plans:

Risk-free interest rate

Expected life (in years)

Dividend yield

Employee Stock Purchase Plan:

Risk-free interest rate

Expected life (in years)

Dividend yield

NOTE 11—RELATED PARTY TRANSACTION

The Company incurred non-recurring engineering service expense and production charges of approximately $ 57,000 and $ 13,000 during the three months ended June 30, 2022 and 2021, respectively, from Wistron Neweb Corp (“WNC”) in connection with the manufacturing of single-APU PCIe boards, to be used in the Company’s in-place associative computing product.

The Company incurred non-recurring engineering service expense and production charges of approximately $ 197,000 and $ 80,000 during the six months ended September 30, 2022 and 2021, respectively, from Wistron Neweb Corp (“WNC”) in connection with the manufacturing of single-APU PCIe boards, to be used in the Company’s in-place associative computing product.

Haydn Hsieh, a member of the Company’s board of directors, is the Chairman and Chief Strategy Officer of WNC.

The amount owed to WNC, of $ 30,000 and $ 32,000 at June 30, 2022 and March 31, 2022, respectively, is included in accounts payable in the Condensed Consolidated Balance Sheets.

The amount owed to WNC, of $ 83,000 and $ 32,000 at September 30, 2022 and March 31, 2022, respectively, is included in accounts payable in the Condensed Consolidated Balance Sheets.

NOTE 12—SEGMENT AND GEOGRAPHIC INFORMATION

2 unchanged sentences

The following is a summary of net revenues by geographic area based on the location to which product is shipped:

Three Months Ended June 30,

Three Months Ended September 30,

Six Months Ended September 30,

(In thousands)

United States

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 1. Financial Statements