GSI TECHNOLOGY INC 10-Q

Item 1. Financial Statements (unaudited) ​ GSI TECHNOLOGY, INC. ​ CONDENSED CONSOLIDATED BALANCE SHEET S ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ March 31, ​ ​ ​ 2024 2024 ​ ​ (In thousands, except share and per share amounts) ​ ASSETS ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents $ 18,356 $ 14,429 ​ Accounts receivable, net ​ 2,411 ​ 3,118 ​ Inventories ​ 4,127 ​ 4,977 ​ Prepaid expenses and other current assets ($ 375 and $ 375 from a related party) ​ 1,724 ​ 1,954 ​ Assets held for sale ​ ​ — ​ ​ 5,629 ​ Total current assets ​ 26,618 ​ 30,107 ​ Property and equipment, net ​ 980 ​ 1,148 ​ Operating lease right-of-use assets ​ ​ 10,166 ​ ​ 1,553 ​ Goodwill ​ ​ 7,978 ​ ​ 7,978 ​ Intangible assets, net ​ ​ 1,440 ​ ​ 1,556 ​ Deposits ​ 212 ​ 122 ​ Total assets $ 47,394 $ 42,464 ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ Accounts payable ($ 14 and $ 0 to a related party) $ 866 $ 668 ​ Lease liabilities, current ​ ​ 1,544 ​ ​ 567 ​ Accrued expenses and other liabilities ​ 3,078 ​ 4,130 ​ Total current liabilities ​ 5,488 ​ 5,365 ​ Deferred tax liability ​ 15 ​ 14 ​ Lease liabilities, non-current ​ ​ 8,556 ​ ​ 955 ​ Contingent consideration, non-current ​ ​ 51 ​ ​ 160 ​ Total liabilities ​ 14,110 ​ 6,494 ​ Commitments and contingencies (Note 9) ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity: ​ ​ ​ ​ ​ ​ ​ Preferred stock: $ 0.001 par value authorized: 5,000,000 shares; issued and outstanding: none ​ — ​ — ​ Common Stock: $ 0.001 par value authorized: 150,000,000 shares; issued and outstanding : 25,485,510 and 25,300,372 shares, respectively ​ 25 ​ 25 ​ Additional paid-in capital ​ 62,292 ​ 60,598 ​ Accumulated other comprehensive loss ​ ( 87 ) ​ ( 87 ) ​ Retained deficit ​ ( 28,946 ) ​ ( 24,566 ) ​ Total stockholders’ equity ​ 33,284 ​ 35,970 ​ Total liabilities and stockholders’ equity $ 47,394 $ 42,464 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 2 Table of Contents ​ GSI TECHNOLOGY, INC. ​ CONDENSED CONSOLIDATED STATEMENTS OF OPERATION S ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ ​ (In thousands, except per share amounts) ​ (In thousands, except per share amounts) ​ Net revenues $ 4,550 $ 5,708 $ 9,221 $ 11,295 ​ Cost of revenues ($ 14 , $ 0 , $ 22 and $ 0 to a related party) ​ 2,793 ​ 2,587 ​ 5,303 ​ 5,105 ​ Gross profit ​ 1,757 ​ 3,121 ​ 3,918 ​ 6,190 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ 4,788 ​ ​ 4,691 ​ ​ 9,002 ​ ​ 9,895 ​ Selling, general and administrative ​ 2,553 ​ ​ 2,523 ​ ​ 5,157 ​ ​ 5,527 ​ Gain from sale and leaseback transaction ​ ​ — ​ ​ — ​ ​ ( 5,737 ) ​ ​ — ​ Total operating expenses ​ 7,341 ​ 7,214 ​ 8,422 ​ 15,422 ​ Loss from operations ​ ​ ( 5,584 ) ​ ​ ( 4,093 ) ​ ​ ( 4,504 ) ​ ​ ( 9,232 ) ​ Interest income ​ 162 ​ ​ 131 ​ ​ 249 ​ ​ 274 ​ Other expense, net ​ ( 13 ) ​ ​ ( 60 ) ​ ​ ( 45 ) ​ ​ ( 123 ) ​ Loss before income taxes ​ ( 5,435 ) ​ ( 4,022 ) ​ ( 4,300 ) ​ ( 9,081 ) ​ Provision for income taxes ​ 23 ​ ​ 33 ​ ​ 80 ​ ​ 84 ​ Net Loss $ ( 5,458 ) $ ( 4,055 ) $ ( 4,380 ) $ ( 9,165 ) ​ Net loss per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic $ ( 0.21 ) $ ( 0.16 ) $ ( 0.17 ) $ ( 0.37 ) ​ Diluted $ ( 0.21 ) $ ( 0.16 ) $ ( 0.17 ) $ ( 0.37 ) ​ Weighted average shares used in per share calculations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ 25,467 ​ 25,161 ​ ​ 25,421 ​ ​ 25,014 ​ Diluted ​ 25,467 ​ 25,161 ​ ​ 25,421 ​ ​ 25,014 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 3 Table of Contents ​ GSI TECHNOLOGY, INC. ​ CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ ​ (In thousands) ​ (In thousands) ​ Net loss $ ( 5,458 ) $ ( 4,055 ) $ ( 4,380 ) $ ( 9,165 ) ​ Net unrealized gain on available-for-sale investments ​ — ​ 9 ​ — ​ 36 ​ Total comprehensive loss $ ( 5,458 ) $ ( 4,046 ) $ ( 4,380 ) $ ( 9,129 ) ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 4 Table of Contents ​ GSI TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Retained ​ Stockholders' ​ Shares Amount Capital Loss Deficit Equity Three months ended September 30, 2024 ​ (In thousands, except share amounts) Balance, June 30, 2024 ​ 25,446,380 ​ $ 25 ​ $ 61,552 ​ $ ( 87 ) ​ $ ( 23,488 ) ​ $ 38,002 Issuance of common stock under employee stock option plans ​ 39,130 ​ ​ — ​ ​ 77 ​ ​ — ​ ​ — ​ ​ 77 Stock-based compensation expense ​ — ​ ​ — ​ ​ 663 ​ ​ — ​ ​ — ​ ​ 663 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 5,458 ) ​ ​ ( 5,458 ) Balance, September 30, 2024 ​ 25,485,510 ​ $ 25 ​ $ 62,292 ​ $ ( 87 ) ​ $ ( 28,946 ) ​ $ 33,284 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Retained ​ Stockholders' ​ ​ Shares Amount Capital Loss Deficit Equity Three months ended September 30, 2023 ​ ​ Balance, June 30, 2023 ​ 25,083,143 ​ $ 25 ​ $ 58,246 ​ $ ( 100 ) ​ $ ( 9,589 ) ​ $ 48,582 Issuance of common stock pursuant to an At-the-Market offering, net of offering costs of $ 389 ​ 133,000 ​ ​ ​ ​ ​ 153 ​ ​ ​ ​ ​ ​ ​ ​ 153 Stock-based compensation expense ​ — ​ ​ — ​ ​ 676 ​ ​ — ​ ​ — ​ ​ 676 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 4,055 ) ​ ​ ( 4,055 ) Net unrealized gain on available-for-sale investments ​ — ​ ​ — ​ ​ — ​ ​ 9 ​ ​ — ​ ​ 9 Balance, September 30, 2023 ​ 25,216,143 ​ $ 25 ​ $ 59,075 ​ $ ( 91 ) ​ $ ( 13,644 ) ​ $ 45,365 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Retained ​ Stockholders' ​ Shares Amount Capital Loss Deficit Equity Six months ended September 30, 2024 ​ (In thousands, except share amounts) Balance, March 31, 2024 ​ 25,300,372 ​ $ 25 ​ $ 60,598 ​ $ ( 87 ) ​ $ ( 24,566 ) ​ $ 35,970 Issuance of common stock under employee stock option plans ​ 185,138 ​ ​ — ​ ​ 373 ​ ​ — ​ ​ — ​ ​ 373 Stock-based compensation expense ​ — ​ ​ — ​ ​ 1,321 ​ ​ — ​ ​ — ​ ​ 1,321 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 4,380 ) ​ ​ ( 4,380 ) Balance, September 30, 2024 ​ 25,485,510 ​ $ 25 ​ $ 62,292 ​ $ ( 87 ) ​ $ ( 28,946 ) ​ $ 33,284 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Comprehensive ​ Retained ​ Stockholders' ​ ​ Shares Amount Capital Loss Earnings Equity Six months ended September 30, 2023 ​ ​ Balance, March 31, 2023 ​ 24,685,059 ​ $ 25 ​ $ 55,953 ​ $ ( 127 ) ​ $ ( 4,479 ) ​ $ 51,372 Issuance of common stock under employee stock option plans ​ 398,084 ​ ​ — ​ ​ 1,473 ​ ​ — ​ ​ — ​ ​ 1,473 Issuance of common stock pursuant to an At-the-Market offering, net of offering costs of $ 389 ​ 133,000 ​ ​ — ​ ​ 153 ​ ​ — ​ ​ — ​ ​ 153 Stock-based compensation expense ​ — ​ ​ — ​ ​ 1,496 ​ ​ — ​ ​ — ​ ​ 1,496 Net loss ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 9,165 ) ​ ​ ( 9,165 ) Net unrealized gain on available-for-sale investments ​ — ​ ​ — ​ ​ — ​ ​ 36 ​ ​ — ​ ​ 36 Balance, September 30, 2023 ​ 25,216,143 ​ $ 25 ​ $ 59,075 ​ $ ( 91 ) ​ $ ( 13,644 ) ​ $ 45,365 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 5 Table of Contents GSI TECHNOLOGY, INC. ​ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW S ​ (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended September 30, ​ ​ ​ 2024 ​ 2023 ​ ​ (In thousands) ​ Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net loss $ ( 4,380 ) $ ( 9,165 ) ​ Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ ​ Allowance for credit losses ​ ( 13 ) ​ ( 12 ) ​ Provision for excess and obsolete inventories ​ 180 ​ 94 ​ Non-cash lease expense ​ ​ 479 ​ ​ 290 ​ Change in fair value of contingent consideration ​ ​ ( 109 ) ​ ​ ( 324 ) ​ Depreciation and amortization ​ 352 ​ 505 ​ Gain on sale and leaseback transaction ​ ​ ( 5,737 ) ​ ​ — ​ Stock-based compensation ​ 1,321 ​ 1,496 ​ Amortization of premium on investments ​ — ​ ( 2 ) ​ Changes in assets and liabilities: ​ ​ ​ ​ ​ ​ ​ Accounts receivable ​ 720 ​ 399 ​ Inventories ​ 670 ​ 744 ​ Prepaid expenses and other assets ​ 140 ​ 164 ​ Accounts payable ​ 198 ​ ( 159 ) ​ Accrued expenses and other liabilities ​ ( 1,565 ) ​ ( 325 ) ​ Net cash used in operating activities ​ ( 7,744 ) ​ ( 6,295 ) ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ Proceeds from sale of assets ​ ​ 11,336 ​ ​ — ​ Maturities of short-term investments ​ — ​ ​ 2,750 ​ Purchases of property and equipment ​ ( 38 ) ​ ​ ( 624 ) ​ Net cash provided by investing activities ​ 11,298 ​ 2,126 ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ Proceeds from issuance of common stock under At-the-Market offering, net of offering costs of $ 389 ​ ​ — ​ ​ 153 ​ Proceeds from issuance of common stock under employee stock plans ​ 373 ​ ​ 1,473 ​ Net cash provided by financing activities ​ 373 ​ 1,626 ​ Net increase (decrease) in cash and cash equivalents ​ 3,927 ​ ( 2,543 ) ​ Cash and cash equivalents at beginning of the period ​ 14,429 ​ ​ 27,212 ​ Cash and cash equivalents at end of the period $ 18,356 $ 24,669 ​ Non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets exchanged for lease obligations ​ $ 9,092 ​ $ 637 ​ Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ Net cash paid for income taxes $ 117 $ 61 ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 6 Table of Contents ​ GSI TECHNOLOGY, INC. ​ NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ​ (Unaudited) ​ NOTE 1—THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ​ Basis of presentation ​ The accompanying unaudited condensed consolidated financial statements of GSI Technology, Inc. and its subsidiaries (“GSI” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. These interim financial statements contain all adjustments (which consist of only normal, recurring adjustments) that are, in the opinion of management, necessary to state fairly the interim financial information included therein. The Company believes that the disclosures are adequate to make the information not misleading. 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, 2024. ​ The consolidated results of operations for the six months ended September 30, 2024 are not necessarily indicative of the results to be expected for the entire fiscal year. ​ Significant accounting policies ​ There have been no material changes to our significant accounting policies that were disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024. ​ Government Agreements ​ From time to time, the Company may enter into agreements with federal government agencies. GAAP does not have specific accounting standards covering agreements between the government and business entities. The Company applies International Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance, by analogy when accounting for agreements entered into with the government. Under IAS 20, government grants or awards are initially recognized when there is reasonable assurance the conditions of the grant or award will be met and the grant or award will be received. After initial recognition, government grants or awards are recognized on a systematic basis in a manner consistent with the manner in which the Company recognizes the underlying costs for which the grant or award is intended to compensate. The Company follows ASC 832, Disclosures by Business Entities about Government Assistance, with respect to the disclosures of government grants or awards. ​ Credit Losses — Marketable Securities ​ For marketable securities in an unrealized loss position, the Company periodically assesses its portfolio for impairment. The assessment first considers the intent or requirement to sell the marketable security. If either of these criteria are met, the amortized cost basis is written down to fair value through earnings. ​ Beginning April 1, 2023, if the criteria above are not met, the Company evaluates whether the decline resulted from credit losses or other factors by considering the extent to which fair value is less than amortized cost, any changes to the rating of the marketable security by a rating agency, and any adverse conditions specifically related to the marketable security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the marketable security is compared to the amortized cost basis of the marketable security. If the present value of cash flows expected to be collected is less than the amortized 7 Table of Contents cost basis, a credit loss exists and an allowance for credit losses is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any other impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive loss. ​ Credit Losses — Accounts Receivable ​ Accounts receivable are recorded at the amounts billed less estimated allowances for credit losses for any potential uncollectible amounts. The Company continually monitors customer payments and maintains an allowance for estimated losses resulting from a customer’s inability to make required payments. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, and economic conditions that may affect a customer’s ability to pay. Accounts receivable are written-off and charged against an allowance for credit losses when the Company has exhausted collection efforts without success. ​ Risk and uncertainties ​ The decline in the global economic environment due to, among other things, higher interest rates and worldwide inflationary pressures has affected the business activities of the Company, its customers, suppliers, and other business partners in the fiscal year ended March 31, 2024 and into the six months ended September 30, 2024. ​ 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 that began on October 7, 2023 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. The Company believes that during the next 12 months disruptions in the capital markets as a result of high interest rates, worldwide inflationary pressures and the decline in the global economic environment could impact general economic activity and demand in the Company’s end markets. ​ Accounting pronouncements not yet adopted by the Company In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which will require the Company to disclose segment expenses that are significant and regularly provided to the Company’s chief operating decision maker (“CODM”). In addition, ASU 2023-07 will require the Company to disclose the title and position of its CODM and how the CODM uses segment profit or loss information in assessing segment performance and deciding how to allocate resources. This accounting standard update will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on the Company's financial statement disclosures. ​ ​ ​ NOTE 2—REVENUE RECOGNITION The Company determines revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, we satisfy a performance obligation. 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). Transfer of control occurs at the point at which delivery has occurred, title and the risks and 8 Table of Contents rewards of ownership have passed to the customer, and the Company has a right to payment. The Company recognizes revenue upon shipment of the product. 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 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. The Company adjusts the transaction price for variable consideration. Variable consideration is not typically significant and primarily results from stock rotation rights and quick pay discounts provided to certain distributors. As a practical expedient, the Company is recognizing the incremental costs of obtaining a contract, specifically commission expenses that have a period of benefit of less than twelve months, as an expense when incurred. Additionally, the Company has adopted an accounting policy to recognize shipping costs that occur after control transfers to the customer as a fulfillment activity. The Company’s contracts with customers do not typically include extended payment terms. Payment terms vary by contract type and type of customer and generally range from 30 to 60 days from shipment. Additionally, the Company has right to payment upon shipment. The Company records revenue net of sales tax, value added tax, excise tax and other taxes collected concurrent with product sales. The impact of such taxes on product sales is immaterial. 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 in all periods presented. Substantially all of the Company’s revenue is derived from sales of SRAM products, which represent approximately 99 % and 98 % of total revenues in the six months ended September 30, 2024 and 2023. 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 18 % and 20 % of the Company’s net revenues in the three months ended September 30, 2024 and 2023, respectively and 20 % and 27 % of the Company’s net revenue in the six months ended September 30, 2024 and 2023, 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 September 30, ​ Six Months Ended September 30, ​ ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ ​ (In thousands) ​ (In thousands) ​ Contract manufacturers $ 660 $ 1,324 $ 1,071 $ 3,274 ​ Distribution ​ ​ 3,865 ​ ​ 4,356 ​ ​ 8,106 ​ ​ 7,970 ​ OEMs ​ ​ 25 ​ ​ 28 ​ ​ 44 ​ ​ 51 ​ ​ ​ $ 4,550 ​ $ 5,708 ​ $ 9,221 ​ $ 11,295 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 9 Table of Contents NOTE 3—NET INCOME (LOSS) PER COMMON SHARE ​ The Company uses the treasury stock method to calculate the weighted average shares used in computing diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (In thousands, except per share amounts) ​ (In thousands, except per share amounts) ​ Net loss $ ( 5,458 ) $ ( 4,055 ) ​ ( 4,380 ) $ ( 9,165 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Denominators: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares—Basic ​ 25,467 ​ ​ 25,161 ​ ​ 25,421 ​ ​ 25,014 ​ Dilutive effect of employee stock options ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ Dilutive effect of employee stock purchase plan options ​ — ​ ​ — ​ ​ — ​ ​ — ​ Weighted average shares—Dilutive ​ 25,467 ​ 25,161 ​ 25,421 ​ 25,014 ​ Net loss per common share—Basic $ ( 0.21 ) $ ( 0.16 ) $ ( 0.17 ) ​ $ ( 0.37 ) ​ Net loss per common share—Diluted $ ( 0.21 ) $ ( 0.16 ) $ ( 0.17 ) ​ $ ( 0.37 ) ​ ​ The following shares of common stock underlying outstanding stock options and unissued ESPP shares, 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 September 30, ​ Six Months Ended September 30, ​ ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ ​ (In thousands) ​ (In thousands) ​ Shares underlying options and ESPP shares 7,956 ​ 7,854 ​ 7,927 ​ 7,862 ​ ​ ​ NOTE 4—BALANCE SHEET DETAIL ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ March 31, 2024 ​ ​ (In thousands) ​ Inventories: ​ ​ ​ Work-in-progress $ 2,197 $ 2,865 ​ Finished goods ​ 1,930 ​ 2,112 ​ ​ $ 4,127 $ 4,977 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ March 31, 2024 ​ ​ (In thousands) ​ Accounts receivable, net: ​ ​ ​ ​ ​ ​ ​ Accounts receivable $ 2,442 $ 3,162 ​ Less: Allowances for credit losses ​ ( 31 ) ​ ( 44 ) ​ ​ $ 2,411 $ 3,118 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ March 31, 2024 ​ ​ (In thousands) ​ Prepaid expenses and other current assets: ​ ​ ​ ​ ​ ​ ​ Prepaid tooling and masks ​ $ 608 ​ $ 668 ​ Other receivables ​ ​ 168 ​ ​ 215 ​ Other prepaid expenses and other current assets ​ ​ 948 ​ ​ 1,071 ​ ​ ​ $ 1,724 ​ $ 1,954 ​ ​ ​ 10 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ March 31, 2024 ​ ​ (In thousands) ​ Property and equipment, net: ​ ​ ​ ​ ​ ​ ​ Computer and other equipment ​ $ 17,993 ​ $ 18,555 ​ Software ​ ​ 4,426 ​ ​ 4,428 ​ Furniture and fixtures ​ ​ 102 ​ ​ 102 ​ Leasehold improvements ​ ​ 927 ​ ​ 927 ​ ​ ​ ​ 23,448 ​ ​ 24,012 ​ Less: Accumulated depreciation ​ ​ ( 22,468 ) ​ ​ ( 22,864 ) ​ ​ ​ $ 980 ​ $ 1,148 ​ ​ Depreciation expense was $ 102,000 and $ 172,000 for the three months ended September 30, 2024 and 2023, respectively and $ 236,000 and $ 388,000 for the six months ended September 30, 2024 and 2023, respectively. ​ ​ The following tables summarize the components of intangible assets and related accumulated amortization balances at September 30, 2024 and March 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of September 30, 2024 ​ ​ Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: ​ ​ ​ ​ ​ ​ ​ Product designs ​ $ 590 ​ $ ( 590 ) ​ $ — ​ Patents ​ ​ 4,220 ​ ​ ( 2,780 ) ​ ​ 1,440 ​ Software ​ ​ 80 ​ ​ ( 80 ) ​ ​ — ​ Total ​ $ 4,890 ​ $ ( 3,450 ) ​ $ 1,440 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, 2024 ​ ​ Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Product designs ​ $ 590 ​ $ ( 590 ) ​ $ — ​ Patents ​ ​ 4,220 ​ ​ ( 2,664 ) ​ ​ 1,556 ​ Software ​ ​ 80 ​ ​ ( 80 ) ​ ​ — ​ Total ​ $ 4,890 ​ $ ( 3,334 ) ​ $ 1,556 ​ ​ Amortization of intangible assets included in cost of revenues was $ 58,000 for each of the three months ended September 30, 2024 and 2023, and $ 116,000 and $ 117,000 for the six months ended September 30, 2024 and 2023, respectively. ​ 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. There were no impairment indicators noted as of September 30, 2024. ​ 11 Table of Contents As of September 30, 2024, the estimated future amortization expense of intangible assets in the table above is as follows (in thousands): ​ ​ ​ ​ ​ ​ Fiscal year ending March 31, ​ ​ ​ 2025 (remaining six months) ​ $ 117 ​ 2026 ​ ​ 233 ​ 2027 ​ ​ 233 ​ 2028 ​ ​ 233 ​ 2029 ​ ​ 233 ​ Thereafter ​ ​ 391 ​ Total ​ $ 1,440 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, 2024 ​ March 31, 2024 ​ ​ (In thousands) ​ Accrued expenses and other liabilities: ​ ​ ​ ​ ​ ​ ​ Accrued compensation ​ $ 2,378 ​ $ 3,173 ​ Accrued commissions ​ ​ 114 ​ ​ 180 ​ Miscellaneous accrued expenses ​ ​ 586 ​ ​ 777 ​ ​ ​ $ 3,078 ​ $ 4,130 ​ ​ In August 2024, the Company implemented strategic cost-cutting measures expected to yield annual savings of approximately $ 3.5 million. These initiatives include workforce reductions across all departments and enhanced operational efficiencies. The cost reduction initiatives included an approximate 16 % reduction in the Company’s global workforce. The Company incurred $ 357,000 in severance related charges during the three and six months ended September 30, 2024, including $ 204,000 recorded as cost of revenues, $ 128,000 recorded as research and development expense and $ 24,000 recorded as selling, general and administrative expense in the condensed consolidated statements of operations. The Company does not expect to incur any additional severance related charges resulting from these measures. There were no severance charges accrued as of September 30, 2024 as severance payments to all impacted employees have been completed as of September 30, 2024. There was no accrued severance as of March 31, 2024 and there were no severance charges incurred during the year ended March 31, 2024. ​ ​ ​ NOTE 5—GOODWILL Goodwill represents the difference between the purchase price and the estimated fair value of the identifiable assets acquired and liabilities assumed in a business combination. The Company tests for goodwill impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the asset is more likely than not impaired. 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 has one reporting unit. The Company had a goodwill balance of $ 8.0 million as of both September 30, 2024 and March 31, 2024. The goodwill resulted from the acquisition of MikaMonu Group Ltd. in fiscal 2016. ​ The Company completed its annual impairment test during the fourth quarter of fiscal 2024 and concluded that there was no impairment, as it was more likely than not that the fair value of its sole reporting unit exceeded its carrying value and the performance of a quantitative impairment test was not required. ​ ​ ​ ​ ​ NOTE 6—INCOME TAXES ​ Due to historical losses in the United States, the Company has a full valuation allowance on its United States federal and state deferred tax assets. Management continues to evaluate the realizability of deferred tax assets and the related valuation allowance. ​ 12 Table of Contents Management believes that within the next twelve months the Company could have a reduction in uncertain tax benefits of up to $ 767,000 , including interest and penalties, as a result of the lapse of statutes of limitations. ​ The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes in the Condensed Consolidated Statements of Operations. ​ The Company is subject to taxation in the United States and various state and foreign jurisdictions. Fiscal years 2013 through 2023 remain open to examination by federal tax authorities, and fiscal years 2012 through 2023 remain open to examination by California tax authorities. Fiscal years 2020 through 2023 are subject to audit by the Israeli tax authorities. ​ For the six months ended September 30, 2024 and September 30, 2023, the Company incurred income tax expense of $ 80,000 and $ 84,000 on net losses before income taxes of ($ 4.3 million) and ($ 9.1 million), respectively. The provision was calculated using the annualized effective tax rate method. The Company’s estimated annual effective income tax rate, excluding discrete items, was approximately ( 1.78 %) and ( 1.53 %) for the six months ended September 30, 2024 and 2023, respectively. The annual effective tax rates for the six months ended September 30, 2024 and 2023 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 foreign tax differential. ​ NOTE 7—FINANCIAL INSTRUMENTS ​ Fair value measurements ​ Authoritative accounting guidance for fair value measurements provides a framework for measuring fair value and related disclosures. The guidance applies to all financial assets and financial liabilities that are measured on a recurring basis. The guidance requires fair value measurement to be classified and disclosed in one of the following three categories: ​ Level 1: Valuations based on quoted prices in active markets for identical assets and liabilities. 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 September 30, 2024, the Level 1 category included money market funds of $ 10.4 million, which were included in cash and cash equivalents on the Condensed Consolidated Balance Sheets. ​ Level 2: Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. 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 September 30, 2024 and March 31, 2024, there were no Level 2 category short-term investments. ​ Level 3: 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 September 30, 2024, 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. These inputs included the estimated amount and timing of future cash flows, the probability achievement of the forecast and a risk-adjusted discount rate of approximately 14.8 % used to adjust the probability-weighted cash flows to their present value. Significant increases (decreases) to the estimated amount and timing of future revenues or the probability of achievement of the revenue forecast would result in a significantly higher (lower) fair value measurement. Conversely, a significant increase (decrease) in the risk-adjusted discount rate would result in a significantly (lower) higher fair value measurement. Generally, changes used in the assumptions for future revenues and probability of achievement of the revenue forecast would be accompanied by a directionally similar change in the fair value measurement and expense. Conversely, changes in the risk-adjusted discount rate would be 13 Table of Contents accompanied by a directionally opposite change in the related fair value measurement and expense. The continued appropriateness of the Monte Carlo valuation model selected or any decision to change the valuation model may also lead to changes in fair value measurement. 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 Consolidated Statements of Operations. During the most recent re-measurement of the contingent consideration liability as of September 30, 2024, the Company used a risk-adjusted discount rate of approximately 16.6 % to adjust the probability-weighted cash flows to their present value using probabilities ranging from 25 % to 70 % for the remaining contingent events. The contingent consideration liability is included in contingent consideration, non-current on the Condensed Consolidated Balance Sheets at September 30, 2024 and March 31, 2024 in the amount of $ 51,000 and $ 160,000 , respectively. ​ The fair value of financial assets and liabilities measured on a recurring basis is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at Reporting Date Using ​ ​ ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ ​ ​ Identical Assets ​ Observable ​ Unobservable ​ ​ ​ ​ ​ ​ and Liabilities ​ Inputs ​ Inputs ​ ​ September 30, 2024 (Level 1) (Level 2) (Level 3) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 10,408 ​ $ 10,408 ​ $ — ​ $ — ​ Total ​ $ 10,408 ​ $ 10,408 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ 51 ​ $ — ​ $ — ​ $ 51 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value Measurements at Reporting Date Using ​ ​ ​ ​ ​ ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ ​ ​ Identical Assets ​ Observable ​ Unobservable ​ ​ ​ ​ ​ ​ and Liabilities ​ Inputs ​ Inputs ​ ​ March 31, 2024 (Level 1) (Level 2) (Level 3) Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 5,676 ​ $ 5,676 ​ $ — ​ $ — ​ Total ​ $ 5,676 ​ $ 5,676 ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ 160 ​ $ — ​ $ — ​ $ 160 ​ ​ The following table sets forth the changes in fair value of contingent consideration for the six months ended September 30, 2024 and 2023, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended September 30, ​ ​ 2024 2023 ​ ​ ​ (In thousands) ​ Contingent consideration, beginning of period ​ $ 160 ​ $ 1,052 ​ Change due to accretion ​ ​ 8 ​ ​ 70 ​ Re-measurement of contingent consideration ​ ​ ( 117 ) ​ ​ ( 394 ) ​ Contingent consideration, end of period ​ $ 51 ​ $ 728 ​ ​ Short-term investments ​ The Company had money market funds of $ 10.4 million and $ 5.7 million at September 30, 2024 and March 31, 2024, respectively, included in cash and cash equivalents on the Condensed Consolidated Balance Sheets. The 14 Table of Contents Company monitors its investments for impairment periodically and records appropriate reductions in carrying values when declines are determined to be other-than-temporary. There were no available-for-sale investments at September 30, 2024 or March 31, 2024, respectively. ​ ​ ​ NOTE 8—LEASES ​ The Company has operating leases for corporate offices and research and development facilities. The Company’s leases have remaining lease terms of 23 months to 116 months , some of which include options to extend for up to 10 years . ​ On June 6, 2024, the Company completed a sale and leaseback transaction pursuant to a previously executed purchase and sale agreement (the “Agreement”) with an unrelated party, as purchaser, for the sale of the Company’s 1213 Elko Drive property in Sunnyvale, California (the “Sunnyvale Property”) for a purchase price, net of closing and other expenses payable by the Company, of $ 11.3 million in cash. Concurrent with the sale, the Company entered into a lease agreement (the “Lease”) to lease all of the Sunnyvale Property that it occupied from the purchaser for an initial term of ten years from the closing of the sale of the Sunnyvale Property. The Company has the option to renew the term of the Lease for two additional five-year periods. Pursuant to the Lease, the Company is responsible for base rent initially at a rate of approximately $ 90,768 per month and the monthly operational expenses, such as maintenance, insurance, property taxes and utilities. The rental rate will increase three percent (3%) per year beginning on the first anniversary of the closing. The transaction was accounted for as a sale and leaseback and operating lease accounting classification. The Company recorded a gain of $ 5.7 million which was recorded in the gain from sale and leaseback transaction in the Condensed Consolidated Statements of Operations in the quarter ended June 30, 2024. ​ Supplemental balance sheet information related to leases was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ As of ​ ​ September 30, 2024 ​ March 31, 2024 ​ ​ (In thousands) Operating Leases ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets ​ $ 10,166 ​ $ 1,553 ​ ​ ​ ​ ​ ​ ​ Lease liabilities-current ​ $ 1,544 ​ $ 567 Lease liabilities-non-current ​ ​ 8,556 ​ ​ 955 Total operating lease liabilities ​ $ 10,100 ​ $ 1,522 ​ The following table provides the details of lease costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ 2024 2023 ​ 2024 2023 ​ ​ (In thousands) ​ (In thousands) Operating lease cost ​ $ 458 ​ $ 141 ​ $ 691 ​ $ 284 Short-term lease cost ​ ​ 8 ​ ​ 8 ​ ​ 16 ​ ​ 16 ​ ​ $ 466 ​ $ 149 ​ $ 707 ​ $ 300 ​ 15 Table of Contents The following table provides other information related to leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended September 30, ​ ​ 2024 2023 ​ ​ (In thousands) Cash paid for amounts included in the measurement of lease liabilities ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 635 ​ $ 283 ​ ​ ​ ​ ​ ​ ​ Right-of-use assets obtained in exchange for lease obligations ​ ​ ​ ​ ​ ​ Operating leases ​ $ 9,092 ​ $ 637 ​ ​ ​ ​ ​ ​ ​ Weighted-average remaining lease term (years): ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 8.94 ​ ​ 2.85 ​ ​ ​ ​ ​ ​ ​ Weighted-average discount rate: ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 6.19 % ​ ​ 4.11 % ​ The following table provides the maturities of the Company’s operating lease liabilities as of September 30, 2024: ​ ​ ​ ​ ​ ​ ​ Operating Lease ​ ​ Liabilities Fiscal Year ​ (In thousands) 2025 (remaining six months) ​ $ 739 2026 ​ ​ 1,703 2027 ​ ​ 1,586 2028 ​ ​ 1,192 2029 ​ ​ 1,220 Thereafter ​ ​ 6,908 Total undiscounted future cash flows ​ ​ 13,348 Less: Imputed interest ​ ​ ( 3,248 ) Present value of undiscounted future cash flows ​ $ 10,100 ​ ​ ​ ​ Presentation on statement of financial position ​ ​ ​ Current ​ $ 1,544 Non-current ​ $ 8,556 ​ ​ ​ NOTE 9—COMMITMENTS AND CONTINGENCIES ​ Indemnification obligations ​ The Company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in the context of contracts entered into by the Company, under which the Company agrees to hold the other party harmless against losses arising from a breach of representations and covenants related to such matters as title to assets sold and certain intellectual property rights. In each of these circumstances, payment by the Company is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, which procedures typically allow the Company to challenge the other party’s claims. Further, the Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments made by it under these agreements. ​ It is not possible to predict the maximum potential amount of future payments that may be required under these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and 16 Table of Contents circumstances involved in each particular agreement. 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. ​ ​ NOTE 10—STOCK-BASED COMPENSATION ​ As of September 30, 2024, 2,539,546 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, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Shares ​ Average ​ Weighted ​ ​ ​ ​ ​ ​ Shares ​ Underlying ​ Remaining ​ Average ​ ​ ​ ​ ​ ​ Available for ​ Options ​ Contractual ​ Exercise ​ Intrinsic ​ ​ Grant Outstanding Life (Years) Price Value Balance at March 31, 2024 ​ 2,584,186 ​ 8,968,199 ​ ​ ​ $ 5.26 ​ ​ ​ ​ Granted ​ ( 589,403 ) ​ 589,403 ​ ​ ​ $ 2.96 ​ ​ ​ ​ Exercised ​ — ​ ( 42,130 ) ​ ​ ​ $ 1.98 ​ $ 21,586 ​ Forfeited ​ 544,763 ​ ( 990,976 ) ​ ​ ​ $ 4.94 ​ ​ ​ ​ Balance at September 30, 2024 ​ 2,539,546 ​ 8,524,496 ​ 5.56 ​ $ 5.16 ​ ​ ​ ​ Options vested and exercisable ​ ​ ​ 6,058,334 ​ 4.37 ​ $ 5.70 ​ $ 676,609 ​ Options vested and expected to vest ​ ​ ​ 8,461,318 ​ 5.53 ​ $ 5.17 ​ $ 1,242,411 ​ ​ 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 September 30, ​ Six Months Ended September 30, ​ ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ ​ (In thousands) ​ (In thousands) ​ Cost of revenues ​ $ 51 ​ $ 57 ​ $ 107 ​ $ 124 ​ Research and development ​ ​ 336 ​ ​ 369 ​ ​ 626 ​ ​ 755 ​ Selling, general and administrative ​ ​ 276 ​ ​ 250 ​ ​ 588 ​ ​ 617 ​ ​ ​ $ 663 ​ $ 676 ​ $ 1,321 ​ $ 1,496 ​ ​ ​ NOTE 11—RELATED PARTY TRANSACTION ​ The Company incurred manufacturing services of approximately $ 14,000 and $ 0 during the three months ended September 30, 2024 and 2023, respectively and $ 22,000 and $ 0 during the six months ended September 30, 2024 and 2023, 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, $ 14,000 and $ 0 at September 30, 2024 and March 31, 2024, respectively, is included in accounts payable in the Condensed Consolidated Balance Sheets. ​ NOTE 12—SEGMENT AND GEOGRAPHIC INFORMATION ​ Based on its operating management and financial reporting structure, the Company has determined that it has one reportable business segment: the design, development and sale of integrated circuits. ​ 17 Table of Contents The following is a summary of net revenues by geographic area based on the location to which product is shipped: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, ​ Six Months Ended September 30, ​ ​ ​ 2024 ​ 2023 ​ 2024 ​ 2023 ​ ​ (In thousands) ​ (In thousands) ​ United States $ 1,885 $ 2,948 $ 3,451 $ 6,035 ​ China ​ ​ 797 ​ ​ 312 ​ ​ 1,895 ​ ​ 481 ​ Singapore ​ ​ 505 ​ ​ 459 ​ ​ 1,280 ​ ​ 952 ​ Netherlands ​ ​ 237 ​ ​ 939 ​ ​ 273 ​ ​ 1,955 ​ Germany ​ ​ 978 ​ ​ 867 ​ ​ 1,908 ​ ​ 1,550 ​ Rest of the world ​ ​ 148 ​ ​ 183 ​ ​ 414 ​ ​ 322 ​ ​ ​ $ 4,550 ​ $ 5,708 ​ $ 9,221 ​ $ 11,295 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ All sales are denominated in United States dollars. ​ NOTE 13—GOVERNMENT AGREEMENTS ​ In June 2023, the Company entered into a prototype agreement with the Space Development Agency for the development of a Next-Generation Associative Processing Unit-2 for Enhanced Space-Based Capabilities (“Prototype Agreement”). Under the Prototype Agreement, the Company will receive an award funded by the Small Business Innovation Research program. Pursuant to an agreed-upon schedule, the Company will receive milestone payments which total an estimated $ 1.25 million upon successful completion of each milestone. ​ In November 2023, the Company entered into a second prototype agreement with the U.S. Air Force Research Laboratory (“AFRL”) for the development of specialized algorithms for a Next-Generation Compute-In-Memory Associative Processing Unit (APU2) to Enable High-Performance Computing in Space. Pursuant to an agreed-upon schedule, the Company will receive milestone payments which total an estimated $ 1.1 million upon successful completion of each milestone. The Prototype Agreements are unrelated to the Company’s ordinary business activities. The Company has discretion in managing the activities under the Prototype Agreement and retains all developed intellectual property. The Company applies IAS 20, by analogy, and recognizes the award as a reduction of research and development expenses based on a cost incurred method. During the three and six months ended September 30, 2024, the Company recognized $ 318,000 as a reduction to research and development expense in the Condensed Consolidated Statements of Operations compared to $ 260,000 in the three and six months ended September 30, 2023. During the six months ended September 30, 2024, the Company received total milestone payments of $ 281,000 under the Prototype Agreements. ​ ​