What changed in this filing

/stocks — the workspaceLOADING

Item 1. Legal Proceedings

2023-10-25 compared with 2023-07-26 · 33 added, 39 removed, 603 unchanged (11% of the section changed)

6 unchanged sentences

Both we and NXP subsequently filed additional lawsuits against each other.

The outcome of this patent litigation remains uncertain, and we may file additional lawsuits against NXP USA, Inc.

While two of these lawsuits have gone to trial and verdicts have been rendered, the ultimate outcome of our patent dispute with NXP remains uncertain, and we may file additional lawsuits against NXP USA, Inc.

and/or its parent or they may file additional lawsuits against us.

125 unchanged sentences

Significant changes in RAIN standards bodies, standards or qualification processes could impede our ability to sell our products and services.

We participate in developing RAIN industry standards, including with GS1 and ISO, and have designed our products to comply with those standards.

We have historically taken a leadership position in standards development.

In the future, we could lose that leadership position or our influence in standards development, or we could choose not to participate in certain standards activities.

New or changed industry standards could cause us to incur substantial development costs to meet the new or changed standards.

We participate in developing RAIN industry standards, including with GS1 and ISO, and have designed our products to comply with those standards, and we have historically taken a leadership position in standards development.

In the future, we could lose that leadership position, our influence in standards development could diminish, or we could choose not to participate in certain standards activities.

New or changed industry standards could affect us negatively.

If industry standards diverge from our or the RAIN market’s needs, then our products may fail to keep pace with the market or cause end users to delay their deployments.

3 unchanged sentences

Certain organizations develop requirements for RAIN tags and test tags against those requirements.

As one example, the ARC Program at Auburn University, or ARC, develops tag performance and quality requirements for end users that engage them.

As one example, the ARC Program at Auburn University, develops tag performance and quality requirements for end users that engage them.

Some participants in the RAIN market are ARC sponsors, but we are not among them.

29 unchanged sentences

Shortages of silicon wafers and components used in our readers and gateways may adversely affect our ability to meet demand for our products and adversely affect our revenue and/or gross margins.

The semiconductor industry has experienced many periods of capacity shortfall and just experienced another due to increased post-Covid demand.

In particular, in both 2021 and 2022 we experienced tight wafer availability, and although we believe wafer availability will improve in 2023, our foundry partner has also raised prices.

The semiconductor industry may continue to experience significant supply/demand imbalances, resulting in continued constraints on wafer availability.

The semiconductor industry has experienced many periods of capacity shortfall and experienced another fairly recently due to increased post-Covid demand.

In particular, in both 2021 and 2022 we experienced tight wafer availability, and our foundry partner raised prices.

Although wafer availability has improved in 2023, supply/demand imbalances could still occur, constraining wafer availability.

We procure wafers on a purchase-order basis from our foundry partners;

consequently, wafer supply is not contractually guaranteed and there can be no assurance that we will receive adequate wafer supply from our foundry partners in 2023 or in the future.

consequently, wafer supply is not contractually guaranteed and there can be no assurance that we will receive adequate wafer supply from our foundry partners if and when wafer shortages occur.

Wafer shortfalls limit sales and may cause market-share losses if we are unable to supply enough products or our customers purchase competing products or, alternatively, may artificially increase bookings as customers over-order our products, followed by sales declines in future periods as they consume their accumulated inventory.

Additionally, if we are unable to raise our prices to cover our higher costs, our gross margins and other financial results could suffer.

As we recover from wafer shortages, we may invest in inventory to support anticipated business growth, like we did with endpoint IC inventory in 2017 and 2020.

To guard against wafer shortages, we may invest in inventory to support anticipated business growth, like we did with endpoint IC inventory in 2017 and 2020.

However, maintaining high inventory levels can increase expenses or increase reserves, and exposes us to a higher risk of product obsolescence as we introduce new products and technologies, all of which could negatively affect our business.

17 unchanged sentences

For example, in April 2023, we completed our acquisition of Voyantic Oy, a global provider of RFID (primarily RAIN and NFC) inlay and label design, manufacturing and test systems.

These transactions could be material to our financial condition and operating results.

Strategic transactions could be material to our financial condition and operating results.

We have limited experience executing acquisitions.

14 unchanged sentences

Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on favorable terms or at all.

Covid-19 has adversely affected our business, and the magnitude and duration of future Covid-19 effects on our business are uncertain.

Since 2020, Covid-19 has created significant worldwide economic volatility, uncertainty and disruption, and, while improving, those effects may persist.

Our significant continuing Covid-19 risks include:

Covid-19 has adversely affected our business, and the magnitude and duration of continued Covid-19 effects on our business are uncertain.

Since 2020, Covid-19 has created significant worldwide economic volatility, uncertainty and disruption, and, while improving, those effects may persist or return.

The Covid-19 risks we continue to monitor include:

uncertain product demand globally;

5 unchanged sentences

maintaining employee engagement and productivity in a remote or hybrid work environment.

The extent to which Covid-19 will continue impacting market demand is still unclear.

In 2020 through 2022, Covid-19 adversely affected retail, including retail apparel, where RAIN is widely adopted.

It also affected other markets that use our products including aviation, sporting events such as footraces, and others.

Our international supply chains remain vulnerable to Covid-19 related disruptions because most our products are manufactured and processed in Asia, which until fairly recently still experienced negative impacts related to Covid-19.

Accordingly, risks associated with Covid-19 on our future product supply remain.

The extent to which Covid-19 will continue impacting market demand and our future results is still unclear, and risks associated with Covid-19 remain.

Changes in global trade policies could have a material adverse effect on us.

20 unchanged sentences

restrictions, or changes thereof, on foreign trade or investment, including currency-exchange controls, including as a result of sanctions against Russia as a result of Russia invading Ukraine;

changes in a country’s or region’s political, regulatory, legal or economic conditions, including, for example, global and regional economic disruptions caused by Covid-19;

changes in a country’s or region’s political, regulatory, legal or economic conditions, including, for example, global and regional economic disruptions caused by any future public health outbreaks or pandemics, including a resurgence in Covid-19 cases;

political, social and economic instability abroad;

wars and other armed conflicts;

and terrorist attacks and security concerns in general, including Russia invading Ukraine and China threatening Taiwan;

and terrorist attacks and security concerns in general, including Russia invading Ukraine, China threatening Taiwan and the conflict in the Gaza Strip;

differing regulations with regard to maintaining operations, products and public information;

13 unchanged sentences

We may not always be successful in obtaining necessary export or import licenses, and our failure to obtain required export or import approval for our products or limitations on our ability to export or sell our products may harm our domestic and international sales and negatively affect our revenue.

government has imposed tariffs on a variety of items imported from China.

China has responded by imposing tariffs on a variety of items imported from the United States.

Such tariffs could have a material impact on our product costs and decrease our ability to sell our products to existing or potential customers as well as harm our ability to compete internationally.

Any changes in our product or in export or import regulations or legislation;

Tariffs could also have a material impact on our product costs and decrease our ability to sell our products to existing or potential customers as well as harm our ability to compete internationally.

For more information, see "Changes in global trade policies could have a material adverse effect on us." Any changes in our product or in export or import regulations or legislation;

shift or change in enforcement;

10 unchanged sentences

Our business operations could be disrupted by natural disasters.

In addition to the pandemic risk discussed earlier under “—Covid-19 has adversely affected our business, and the magnitude and duration of future Covid-19 effects on our business are uncertain,”

In addition to the pandemic risk discussed earlier under “—Covid-19 has adversely affected our business, and the magnitude and duration of continued Covid-19 effects on our business are uncertain,”

other disasters, whether natural or manmade, could decrease demand for our products, disable our facilities, disrupt operations or cause catastrophic losses.

44 unchanged sentences

appropriately managing both positive and negative publicity.

Product supply shortages have challenged our ability to meet market needs and we have recently increased prices in response to our suppliers increasing their prices to us.

Our inability to supply partners and end users with products they need, and/or our need to increase our prices could result in long-lasting, negative consequences to our relationships with those partners and end users, to RAIN adoption and to our business overall.

Product supply shortages have challenged our ability to meet market needs and we have increased prices in response to our suppliers increasing their prices to us.

Our inability to supply partners and end users with products they need, and/or our need to

increase our prices could result in long-lasting, negative consequences to our relationships with those partners and end users, to RAIN adoption and to our business overall.

Increasing attention to environmental, social and governance matters may cause us to incur additional costs or expose us to additional risks.

1 unchanged sentence

Our ESG practices may not meet their standards, and they as well as advocacy groups may campaign for us to change our business or practices to address their ESG-related concerns.

A failure, or perceived failure, of us to respond to any such campaigns could harm our business and reputation and negatively impact the market price of our securities.

Our failure, or perceived failure, to respond to any such campaigns could harm our business and reputation and negatively impact the market price of our securities.

Moreover, with the continued evolution of ESG practices and reporting and disclosure requirements, our costs related to those ESG practices and reporting and disclosure requirements could increase, which could negatively affect our operating results.

21 unchanged sentences

Our litigation with NXP, including any appeals, has contributed, and may continue to contribute, to increased legal expenses and demands on our management team’s time, and could negatively impact our relationships with partners or end users.

While we have obtained favorable jury verdicts in prosecuting our patent infringement claim against NXP in California and in defending against NXP’s patent infringement claim against us in Washington, these results remain subject to appeal.

Moreover, these jury verdicts can provide no assurance regarding the results of our other ongoing litigation involving NXP.

9 unchanged sentences

pay substantial damages to our partners or end users for them to discontinue using, or replace, infringing products with non-infringing products.

Even if we do prevail in patent-related proceedings, verdicts and and judgments can be modified or even reversed by trial or appellate courts.

Even if we do prevail in patent-related proceedings, verdicts and judgments can be modified or even reversed by trial or appellate courts.

Many companies in our industry, as well as nonpracticing entities, hold patents and other intellectual property rights and may pursue, protect and enforce those intellectual property rights.

58 unchanged sentences

related industry standards and guidelines;

and continued evolution of these laws, regulations, standards, guidelines and other actual and asserted obligations, as well as their interpretation and enforcement, may require us to modify our products, practices and policies, which we may not be able to do on commercially reasonable terms or at all, and otherwise could cause us to incur substantial costs and expenses.

all, and otherwise could cause us to incur substantial costs and expenses.

Any failure or perceived failure by us or any third parties with which we do business to comply with these laws and regulations or other actual or asserted obligations may result in claims or litigation;

24 unchanged sentences

Our ability to attain or sustain profitability depends on numerous factors, many of which are out of our control, including continued RAIN industry adoption and us maintaining or growing our market share.

Our costs to support operations, product development and business

and personnel expansion in sales, engineering and marketing are significant and are likely to increase as we invest to grow the market and our share of it, reduce our costs and improve our operations.

Our costs to support operations, product development and business and personnel expansion in sales, engineering and marketing are significant and are likely to increase as we invest to grow the market and our share of it, reduce our costs and improve our operations.

If we fail to increase our revenue or manage our expenses, or if our investments in growing the market or our share of it fail, then we may not attain or sustain profitability.

27 unchanged sentences

We may need to raise additional capital which may not be available on favorable terms or at all.

In the future we may raise capital, including pursuant to a shelf registration statement filed with the SEC, potentially diluting our stockholders, restricting our operations or otherwise adversely affecting our business.

In the future we may raise capital, including pursuant to shelf registration statements we may file from time to time with the SEC, potentially diluting our stockholders, restricting our operations or otherwise adversely affecting our business.

Debt financing, if available, may include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, expending capital or declaring dividends, or may impose financial covenants that limit our ability to achieve our business objectives.

63 unchanged sentences

changes in governmental regulations or in the status of our regulatory approvals;

unstable political and economic conditions, including instability resulting from wars and other armed conflicts, such as Russia invading Ukraine;

unstable political and economic conditions, including instability resulting from wars and other armed conflicts, such as Russia invading Ukraine, China threatening Taiwan, and the conflict in the Gaza Strip;

the trading volume of our stock;

22 unchanged sentences

Our principal stockholders and management own a significant percentage of our stock and are able to exercise significant influence over matters subject to stockholder approval.

As of June 30, 2023, our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 51.1% of our stock.

As of September 30, 2023, our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 54.6% of our stock.

As a result, our executive officers, directors and principal stockholders may be able to significantly influence, in their capacity as stockholders, matters requiring approval by our stockholders, including electing directors and approving mergers, acquisitions or other transactions.

45 unchanged sentences

Alternatively, if a court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

Unregistered Sales of Equit y Securities and Use of Proceeds

Unregistered Sales of Equit y Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.

Defaults Upon Senior Securities

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. Legal Proceedings