What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-04-01 compared with 2023-03-31 · 98 added, 73 removed, 654 unchanged (21% of the section changed)

27 unchanged sentences

and adversely affected.

Have Incurred A Significant Reduction In Revenues During 2020 and First Quarter 2021 Related To The Global Effects That The COVID-19

Pandemic Have Had On The Worldwide Economy.

COVID-19 pandemic represents a fluid situation that presents a wide range of potential impacts of varying durations for different global

geographies, including locations where the Company has offices, employees, customers, vendors and other suppliers and business partners.

most businesses, the COVID-19 pandemic and efforts to mitigate the same began to have impacts on our business in March 2020.

time, much of our first fiscal quarter was completed.

During the remainder of 2020 and the first quarter of 2021, the Company observed

decreases in demand from certain customers, including primarily municipalities and commercial customers in Taiwan as well as delays in

project timelines in Taiwan.

The Company subsequently experienced an increase in demand for the last half of 2021, compared to the last

half of 2020.

the fact that the Company’s products are sold through a variety of distribution channels, the Company expects its sales will experience

more volatility as a result of the changing and less predictable operational needs of many customers as a result of the COVID-19 pandemic.

The Company is aware that many companies, including many of its suppliers and customers, are reporting or predicting negative impacts

from COVID-19 on future operating results.

Although the Company observed significant declines in demand for its products from certain

customers during 2020 and the first quarter of 2021, the Company believes that the impact of the COVID-19 remains too fluid and unknown,

hindering the Company from determining the long-term demand for current products.

The Company also cannot be certain how demand may shift

over time as the impacts of the COVID-19 pandemic may go through several phases of varying severity and duration.

Company does not expect there to be material changes to its assets on its balance sheet or its ability to timely account for those assets.

The Company has also reviewed the potential impacts on future risks to the business as it relates to collections, returns and other business-related

date, travel restrictions and border closures have not materially impacted its ability to obtain inventory or manufacture or deliver

products or services to customers.

However, if such restrictions become more severe, they could negatively impact those activities in

a way that would harm the business over the long term.

Travel restrictions impacting people can restrain our ability to assist its customers

and distributors as well as impact its ability to develop new distribution channels, but at present the Company does not expect these

restrictions on personal travel to be material to our business operations or financial results.

The Company has taken steps to restrain

and monitor its operating expenses and therefore it does not expect any such impacts to materially change the relationship between costs

and revenues.

most companies, the Company has taken a range of actions with respect to how it operates to assure it complies with government restrictions

and guidelines as well as best practices to protect the health and well-being of its employees and its ability to continue operating

its business effectively.

To date, the Company has been able to operate its business effectively using these measures and to maintain

internal controls as documented and posted.

The Company also has not experienced challenges in maintaining business continuity and does

not expect to incur material expenditures to do so.

However, the impacts of COVID-19 and efforts to mitigate the same have remained unpredictable

and it remains possible that challenges may arise in the future.

actions the Company has taken so far during the COVID-19 pandemic include, but are not limited to requiring all employees who can work

from home to work from home and increasing its IT networking capability to best assure employees can work effectively outside the office.

for the year ending December 31, 2021 was negatively impacted due to the conditions noted.

If business interruptions resulting from the

COVID-19 pandemic were to be prolonged or expanded in scope, the business, financial condition, results of operations and cash flows

will continue to be negatively impacted.

The Company will continue to actively monitor this situation and will implement actions necessary

to maintain business continuity.

Depend On Certain Key Personnel.

future success is dependent on the efforts of key management personnel, particularly David Ly, our Chairman and Chief Executive Officer,

Sid Sung, our President, Robert J.

Brilon, our Chief Financial Officer, and Gregory Omi, our Chief Technology Officer, each of whom is

employed by us at will.

Brilon, our Chief Financial Officer, and Gregory Omi, our Chief Technology Officer, each of whom is employed by us at will.

Ly’s relationships within our industry are vital to our continued operations, and if Mr.

longer actively involved with us, we would likely be unable to continue our operations.

The loss of one or more of our other key employees

could also have a material adverse effect on our business, financial condition, and results of operations.

Ly were no longer actively involved

with us, we would likely be unable to continue our operations.

The loss of one or more of our other key employees could also have a material

adverse effect on our business, financial condition, and results of operations.

also believe that our future success will be largely dependent on our ability to attract and retain highly qualified management, sales,

32 unchanged sentences

represented approximately 48% of total revenue for the year ended December 31, 2023.

These specific customers were 1) Chunghwa Telecom

with 21%, 2) Chicony Power Technology Co Ltd with 31%, (both Taiwan companies).

These specific customers were 1) YOU MING HUEI CO.

LTD with 25%, 2) Chicony Power Technology Co Ltd with 23%, (both Taiwan companies).

Revenue from two customers out of 42 total customers

1 unchanged sentence

These specific customers were 1) Chunghwa Telecom

with 41%, 2) Taiwan Stock Exchange with 14%, (both Taiwan companies).

Total number of customers were 42 and 36, for the years ended December

31, 2022 and 2021, respectively.

52% of the total accounts receivable at December 31, 2022 was from one customer out of a total of 36

customer accounts receivable accounts.

This specific customer was Chicony Power Technology Co Ltd.

with 21%, 2) Chicony Power Technology Co Ltd with 31%, (both Taiwan companies).

Total number of customers were 65 and 42, for the years

ended December 31, 2023 and 2022, respectively.

50% of the total accounts receivable at December 31, 2023 was from one customer out of

a total of 24 customer accounts receivable accounts.

This specific customer was Chunghwa Telecom.

Our accounts receivables are unsecured,

52 unchanged sentences

We have direct relationships with camera manufacturers in Taiwan for camera systems.

Risks associated with our dependence upon third

party manufacturers include the following:

Risks associated with our dependence upon third-party manufacturers include the following:

(i) reduced control over delivery schedules;

33 unchanged sentences

Operate In A Highly Competitive Industry And Our Failure To Compete Effectively May Adversely Affect Our Ability To Generate Revenue.

believe that our products offer more functions and priced better than our competitors.

However, some companies may be developing a similar

product, including companies that may have significantly greater financial, technical, and marketing resources, larger distribution networks,

and that generate greater revenue and have greater name recognition than we do.

Those companies may develop products that are superior

to those that we offer.

Such competition may potentially affect our chances of achieving profitability.

believe that our products offer more functions and are priced better than our competitors.

However, some companies may be developing

a similar product, including companies that may have significantly greater financial, technical, and marketing resources, larger

distribution networks, and that generate greater revenue and have greater name recognition than we do.

Those companies may develop

products that are superior to those that we offer.

Such competition may potentially affect our chances of achieving

profitability.

of our competitors may conduct more extensive promotional activities and may offer lower prices to customers than we can, which could

85 unchanged sentences

economic and political changes;

imposition of governmental controls or changes in government regulations, including tax laws, regulations, and treaties;

imposition of governmental controls or changes in government regulations, including tax laws, regulations, trade policies, and

in, or impositions of, legislative or regulatory requirements regarding the pharmaceutical industry;

1 unchanged sentence

on transfers of funds and assets between jurisdictions;

disruption to supply chains, impacting access to raw materials, labor, or finished products from third-party manufacturers;

uncertainty in financial markets, leading to currency fluctuations, changes in interest rates, and stock market volatility;

risk of elevated security concerns, including cyber threats, protests, or civil unrest;

Taiwan geo-political instability.

360 unchanged sentences

stock and/or Warrants.

September 28, 2023 , the Company received

written notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”)

notifying the Company that, based on the closing bid price of the Company’s Common

Stock , the Company no longer complies with the minimum bid price requirement for continued

listing on The Nasdaq Capital Market.

Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00

per share (the “Minimum Bid Price Requirement”), and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the

Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive trading days.

regain compliance, the closing bid price of the Common Stock must be at least $1.00 per share for a minimum of 10 consecutive trading

days prior to March 26, 2024, and the Company

must otherwise satisfy The Nasdaq Capital Market’s requirements for listing.

If the Company does not regain

compliance by March 26, 2024 , the Company may be eligible for an additional 180 calendar

day compliance period if it meets the continued listing requirement for market value of publicly held shares and all other initial listing

standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of

its intention to cure the deficiency during the second compliance period.

If the Company

does not qualify for the second compliance period or fails to regain compliance during the second

compliance period, then Nasdaq will notify the Company of its determination to delist the Company’s common stock, at which point

the Company will have an opportunity to appeal the delisting determination to a Hearings Panel.

Company intends to monitor the closing bid price of the Common Stock and consider its available options to resolve the noncompliance

with the Minimum Bid Price Requirement.

There can be no assurance that the

Company will be able to regain compliance with The Nasdaq Capital Market’s continued listing

requirements or that Nasdaq will grant the Company a further extension of time to regain compliance, if applicable.

employed by short sellers may drive down the market price of the common stock.

43 unchanged sentences

lB – UNRESOLVED STAFF COMMENTS

CYBERSECURITY.

Cybersecurity Risk Management and Strategy

We recognize the importance of assessing, identifying,

and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation

These risks include, among other things:

operational risks, intellectual property theft, fraud, extortion, harm to employees or customers

and violation of data privacy or security laws.

We do not presently

have any general processes for assessing, identifying, and managing material risks from cybersecurity threats.

As we expand our

business operations, we plan to develop processes that will allow for the identification and assessment of cybersecurity risk that

will be integrated into an overall risk management system, which will be managed by senior management and overseen by

the Board of Directors.

As part of this development, we plan to identify and address cybersecurity risks related to our business,

privacy and compliance issues through a multi-faceted approach that is expected to include third party assessments, internal

information technology (IT) audit, IT security, governance, risk and compliance reviews.

In connection with these planned

approaches, and to defend, detect and respond to cybersecurity incidents, we, among other things, will consider:

proactive privacy and cybersecurity reviews of systems and applications, audits of applicable data policies, performing penetration

testing using external third-party tools and techniques to test security controls, conducting employee training, monitoring emerging

laws and regulations related to data protection and information security, and implementing appropriate changes.

As part of the above planned processes, we may engage

external auditors and consultants with expertise in cybersecurity to assess our internal cybersecurity programs and compliance with applicable

practices and standards.

We plan to design our risk management program to also

assesses third party risks, and we plan to perform third-party risk management to identify and mitigate risks from third parties, such

as vendors, suppliers, and other business partners associated with our use of third-party service providers.

In addition to new vendor

onboarding, we plan to perform risk management during third-party cybersecurity compromise incidents to identify and mitigate risks to

us from third-party incidents.

Cybersecurity Governance

We expect that cybersecurity

will become an important part of our risk management processes and an area of focus for our Board of Directors and management.

that our Board of Directors will be responsible for the oversight of risks from cybersecurity threats.

We expect our senior management

will provide our Board of Directors updates on a quarterly basis regarding matters of cybersecurity.

This is expected to include existing

and new cybersecurity risks, status on how management is addressing and/or mitigating those risks, cybersecurity and data privacy incidents

(if any) and status on key information security initiatives.

We expect that our Board members will also engage in periodic conversations

with management on cybersecurity-related news events and discuss any updates to our cybersecurity risk management and strategy programs.

Currently, our Chief Financial Officer is expected

to lead our cybersecurity risk assessment and management processes and oversees their implementation and maintenance.

Our Chief Financial

Officer will be tasked with staying informed about, and monitoring the prevention, mitigation, detection and remediation of cybersecurity

incidents through his management of, and participation in, the cybersecurity risk management and strategy processes we plan to develop

and as described above, including the operation of an incident response plan, and report to the Board of Directors on any appropriate

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors