What changed in this filing

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Item 1A. Risk Factors

2024-02-28 compared with 2023-03-09 · 73 added, 104 removed, 323 unchanged (35% of the section changed)

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We are dependent on a limited number of customers.

Our license revenues for the year ended December

31, 2022 were earned from 11 OEM, ODM and Tier 1 customers.

We generated NRE revenues from five customers for the year ended December

During the year ended December 31, 2022, four customers represented approximately 68% of our consolidated net revenues.

customer concentration may change significantly from period-to-period depending on a customer’s product cycle and changes in our

In addition, our customer composition may change as we transition to selling more sensor modules in parallel to our licensing

The response of customers to our sensor products, loss of a major customer, a reduction in net revenues of a major customer

for any reason, or a failure of a major customer to fulfill its financial or other obligations due to us could have a material adverse

effect on our business, financial condition, and future revenue stream.

Our license revenues for the year ended December 31, 2023 were

earned from 10 OEM, ODM and Tier 1 customers.

We generated NRE revenues from two customers for the year ended December 31, 2023.

the year ended December 31, 2023, three customers represented approximately 56.4% of our consolidated net revenues.

concentration may change significantly from period-to-period depending on a customer’s product cycle and changes in our industry.

The response of customers to our sensor products, loss of a major customer, a reduction in net revenues of a major customer for any reason,

or a failure of a major customer to fulfill its financial or other obligations due to us could have a material adverse effect on our business,

financial condition, and future revenue stream.

The new business strategy with 100% focus on technology and software licensing, that we

launched in December 2023, is likely to trigger changes in our customer composition and an overall reduction of the number of customers

we have active engagements with.

We rely on the ability of our customers to design, manufacture

and sell their products that incorporate our touch technology.

We have historically generated revenue through technology

licensing agreements with companies that design, manufacture, and sell their own products incorporating our touch technology.

of our license fees earned in 2022 and 2021 were from customer shipments of printer products and automotive infotainment systems.

we have broadened our business model to selling sensors in addition to licensing our technology, we expect to continue to rely on licensing

revenue from current and new customers whose products are still in the development cycle.

If our customers are not able to design, manufacture

and sell their products, or are delayed in producing and selling their products, our revenues, profitability, and liquidity, as well as

our brand image, may be adversely affected.

We have historically generated revenue through

technology licensing agreements with companies that design, manufacture, and sell their own products incorporating our touch technology.

The majority of our license fees earned in 2023 and 2022 were from customer shipments of printer products and automotive infotainment

We continue to rely on licensing revenue from current and new customers whose products are still in the development cycle.

our customers are not able to design, manufacture and sell their products, or are delayed in producing and selling their products, our

revenues, profitability, and liquidity, as well as our brand image, may be adversely affected.

The length of a customer’s product development and release

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or revenues that vary significantly from quarter to quarter.

The development and release cycle for customer products is lengthy

and unpredictable.

Our customers often undertake significant evaluation and design in the qualification of our products, which contributes

to a lengthy product release cycle.

The development and release cycle for customer

products is lengthy and unpredictable.

Our customers often undertake significant evaluation and design in the qualification of our products,

which contributes to a lengthy product release cycle.

The typical product development and release cycle is 18 to 36 months.

The development and release

cycle may be longer in some cases, particularly for automotive vehicle products.

There is no assurance that a customer will adopt our

technology after the evaluation or design phase, in which case we would not be entitled to any revenues from the customer moving forward.

The lengthy and variable development and release cycle for products may also have a negative impact on the timing of our revenues, causing

our revenues and results of operations to vary significantly from quarter to quarter.

We and our license customers rely upon component suppliers to

manufacture and sell products containing our technology and limited availability of components, including as a result of the COVID-19

pandemic, may adversely affect our and our customers’ businesses.

The development

and release cycle may be longer in some cases, particularly for automotive vehicle products.

There is no assurance that a customer will

adopt our technology after the evaluation or design phase, in which case we would not be entitled to any revenues from the customer moving

The lengthy and variable development and release cycle for products may also have a negative impact on the timing of our revenues,

causing our revenues and results of operations to vary significantly from quarter to quarter.

Our license customers rely upon component suppliers to manufacture

and sell products containing our technology and limited availability of components may adversely affect our and our customers’ businesses.

Under our licensing model, OEMs, ODMs and Tier

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our customers must qualify these components for use in their products, thus making the components difficult to replace.

Under our sensor

model, we use a similar ASIC component supplied by ST Microelectronics in our TSM products.

If the components provided by Texas Instruments,

ST Microelectronics or other suppliers experience quality control or availability problems, our technology may be disqualified by one

or more of our customers and our supply chain may be disrupted.

Our dependence on third parties to supply core components that incorporate

our patented technology exposes us to a number of risks including the risk that these suppliers will not be able to obtain an adequate

supply of raw materials or components, the risk that these suppliers will not be able to meet our customer requirements, and the risk

that these suppliers will not be able to remain in business or adjust to market conditions.

If we and our customers are unable to obtain

ASICs that incorporate our patented technology, we may not be able to meet demand, which could have a material adverse effect on our business,

financial condition, results of operations and cash flows.

The COVID-19 pandemic has resulted in extended shutdown of businesses

all over the world causing general delays in the supply of components.

We have not suffered from a supply shortage, but it is possible

that the component shortage has caused delays and/or increased cost of components impacting our customers’ ability to manufacture

and sell products on a cost-effective basis.

Our dependence on third parties to supply core

components that incorporate our patented technology exposes us to a number of risks including the risk that these suppliers will not be

able to obtain an adequate supply of raw materials or components, the risk that these suppliers will not be able to meet our customer

requirements, and the risk that these suppliers will not be able to remain in business or adjust to market conditions.

If our customers

are unable to obtain ASICs that incorporate our patented technology, we may not be able to meet demand, which could have a material adverse

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

It can be difficult for us to verify royalty amounts owed to

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under the terms of our license agreements, but we can give no assurances that these audits will be effective.

We have limited experience in manufacturing products and our

entry into the hardware market may not be successful.

Our business model has historically focused on licensing

touch technology.

In October 2017, we began to manufacture and sell sensor touch components.

There can be no assurance that our hardware

manufacturing and sales will result in market acceptance or meaningful revenues.

The commercial success of our sensor modules will depend

on customer response and our management’s execution.

The commercial success of our sensor modules is subject to numerous risks,

the quality and reliability of product components that we source from third-party suppliers and incorporate in our sensor modules;

our ability to secure product components in a timely manner, in sufficient quantities or on commercially reasonable terms;

our ability to increase production capacity or volumes to meet demand;

our ability to identify and qualify alternative suppliers for product components in a timely manner;

our ability to establish and maintain effective sales channels.

In addition, if demand for our products increases,

we will have to invest additional resources to purchase product components, hire and train employees and enhance our manufacturing processes.

If we fail to increase our production capacity efficiently, our sales may not increase in line with our expectations and our operating

margins could fluctuate or decline.

If we fail to develop and introduce new technology successfully,

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economic conditions specific to the industries and segments where we are active, for instance printers, automotive, elevators, and interactive kiosks;

general economic conditions including as a result of the ongoing COVID-19

pandemic or future pandemics or epidemics, or geopolitical conflicts such as the ongoing war in Ukraine.

Further, as a strategic response to changes in the

competitive environment, we may from time to time make certain pricing, service, or marketing decisions that could have a material and

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

general economic conditions including as a result of pandemics or epidemics,

or geopolitical conflicts such as the ongoing war in Ukraine or the Israel-Palestine conflict.

Further, as a strategic response to changes in

the competitive environment, we may from time to time make certain pricing, service, or marketing decisions that could have a material

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

Due to the foregoing factors, our revenues and operating

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monetization.

Our success depends in part on our ability to effectively utilize our

intellectual property.

Our success depends in part on our ability to effectively

utilize our intellectual property.

Our policy is to always try to protect our innovations using patents.

Our patent portfolio is an important prerequisite

for our licensing business and also protects our investments in product development.

Our patent portfolio is an important

prerequisite for our licensing business and also protects our investments in product development.

From time to time, we also explore opportunities

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from Asia, North America and Europe were 47.2%, 36.0%, and 16.8%, respectively.

We incur a significant portion of our expenses in Swedish Krona,

including a significant portion of our research and development expenses and a substantial portion of our general and administrative expenses.

We incur a significant portion of our expenses in Swedish

Krona, including a significant portion of our research and development expenses and a substantial portion of our general and administrative

As a result, appreciation of the value of the Swedish Krona relative to the other currencies, particularly the U.S.

dollar, could adversely

affect operating results.

We do not currently undertake hedging transactions to cover our currency exposure, but we may choose to hedge

a portion of our currency exposure in the future as we deem appropriate.

could adversely affect operating results.

We do not currently undertake hedging transactions to cover our currency exposure, but we may

choose to hedge a portion of our currency exposure in the future as we deem appropriate.

Security breaches and other disruptions to our information technology

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Our long-term success is dependent on us obtaining

sufficient capital to fund our operations, develop our touch technology and bring our technology to the worldwide market in order to generate

sufficient capital to fund our operations, develop our technology and bring our technology to the worldwide market in order to generate

sufficient sales volume to be profitable.

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with reporting obligations.

Section 12(g)(4) of the Exchange Act allows for the registration of

any class of securities to be terminated after a company files a certification with the SEC that the number of holders of record of such

class of security is fewer than 300 persons.

As of February 9, 2023, there were 37 stockholders of record of our common stock.

This does not include the number of shareholders that hold shares in “street name” through banks, brokers and other financial

institutions.

Accordingly, we are eligible to deregister our common stock and suspend our reporting obligations under the Exchange

If we were to terminate our registration and suspend our reporting obligations under the Exchange Act, we would no longer be required

to comply with U.S.

public company disclosure requirements under the Exchange Act, including, but not limited to, annual and quarterly

report filings, proxy statement filings and filings by insiders to disclose the acquisition and disposition of our securities.

Section 12(g)(4) of the Exchange Act allows for

the registration of any class of securities to be terminated after a company files a certification with the SEC that the number of holders

of record of such class of security is fewer than 300 persons.

As of January 26, 2024, there were 55 stockholders of record

of our common stock.

This does not include the number of shareholders that hold shares in “street name” through banks, brokers

and other financial institutions.

Accordingly, we are eligible to deregister our common stock and suspend our reporting obligations

under the Exchange Act.

If we were to terminate our registration and suspend our reporting obligations under the Exchange Act, we would

no longer be required to comply with U.S.

public company disclosure requirements under the Exchange Act, including, but not limited to,

annual and quarterly report filings, proxy statement filings and filings by insiders to disclose the acquisition and disposition of our

Our stock price has been volatile, and your investment in our

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developments regarding our patents or proprietary rights or those of our competitors;

the public’s reaction to news concerning Aequitas Technologies LLC’s

patent litigations against Apple and Samsung;

the public’s reaction to news concerning Aequitas Technologies LLC’s patent litigations against Apple and Samsung;

our inability to raise additional capital as needed;

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Our Board of Directors has the authority to issue

up to 1,000,000 shares of preferred stock and to determine the price, rights, preferences and privileges of those shares without any further

vote or action by the stockholders.

The rights of the holders of common stock will be subject to, and may be materially adversely affected

by, the rights of the holders of any preferred stock that may be issued in the future.

The issuance of preferred stock could have the

effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock.

Furthermore, certain other

provisions of our certificate of incorporation and bylaws may have the effect of delaying or preventing changes in control or management,

up to 1,000,000 shares of preferred stock and to determine the price, rights, preferences, and privileges of those shares without any

further vote or action by the stockholders.

The rights of the holders of common stock will be subject to, and may be materially adversely

affected by, the rights of the holders of any preferred stock that may be issued in the future.

The issuance of preferred stock could

have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock.

Furthermore, certain

other provisions of our certificate of incorporation and bylaws may have the effect of delaying or preventing changes in control or management,

which could adversely affect the market price of our common stock.

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or more analysts or other third parties publish inaccurate or unfavorable research about us.

UNRESOLVED STAFF COMMENTS

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