What changed in this filing

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Item 1. Legal Proceedings

2025-07-30 compared with 2025-04-23 · 25 added, 20 removed, 611 unchanged (7% of the section changed)

182 unchanged sentences

Any transition would require a requalification by our customers or end users, which could also adversely affect our ability to sell our products as well as our operating results.

Shortages of silicon wafers, IC post-processing capacity or 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.

Shortages of silicon wafers, IC post-processing materials or capacity or 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.

Wafer shortfalls limit sales and may cause market-share losses.

5 unchanged sentences

To convert the wafers we receive from our foundry partner into saleable ICs, we perform additional steps including testing, thinning, bumping and dicing.

If our third-party suppliers are unable to efficiently perform these steps, and our production capacity is constrained as a result, we may be unable to satisfy demand for our products, and our financial results could suffer.

If our third-party suppliers are unable to efficiently perform these steps or are unable to procure the material used in these steps, and our production capacity is constrained, we may be unable to satisfy demand for our products, and our financial results could suffer.

We may also experience shortfalls and price increases for components we use in our readers and gateways, as well as in packaging and test capacity for our reader ICs.

2 unchanged sentences

We maintain inventory to meet customer demand.

To guard against wafer shortages, and to allow for production risks given the relatively long lead times for our many of our products, we have in the past and may invest again in inventory to support anticipated business growth.

To guard against product shortages, and to allow for production risks given the relatively long lead times for our many of our products, we have in the past and may invest again in inventory to support anticipated business growth.

When we introduce new products, we may also initially carry higher inventory or have slower inventory turns depending on market acceptance.

5 unchanged sentences

If we are unable to sell the inventory we purchased, or if we must sell it at lower prices, then our business will be negatively impacted.

We must attract and retain employees with specialized knowledge and experience to compete effectively.

Hiring and retaining employees with RAIN technical and business knowledge and experience are critical to our success.

We have been fortunate to have hired and retained many such employees in the Company’s history, but as employees depart or retire we must recruit and train their successors to remain competitive.

We must also adapt to changes in our executive team from time to time.

Our business could be significantly harmed if we were not able to attract and retain key talent, or if we were not able to effectively manage transitions in personnel and leadership as they arise.

Acquisitions could result in operating difficulties, dilution and other harmful consequences.

22 unchanged sentences

administration, and the administration has been very active in this area.

Overall, whether and when tariffs will be implemented and their amount, scope and nature, are unclear.

Overall, a full understanding of whether and when tariffs will be implemented and their amount, scope and nature are unclear.

Also unclear is how other countries will respond to the United States’ trade proposals and actions.

As of now, high reciprocal tariffs are in effect between China and United States and the United States has announced, but paused, tariffs on goods imported from many other countries, including Mexico, Canada, Taiwan, Malaysia and the European Union.

Significant trade partners such as Mexico, Canada and the European Union have announced retaliatory tariffs.

Further, while the United States has exempted certain technology products such as semiconductors and electronics such that our products are not subject to the announced tariffs, it has also initiated Section 232 investigations on such products, possibly leading to the imposition of specific tariffs on these products or on products that incorporate them.

As of the date of this filing, a minimum 10% tariff applies to nearly all U.S.

imports from trade partners except Canada, Mexico and countries with which the United States does not have “normal trade relations.” Goods that include certain semiconductors, consumer electronics, computers and other similar items are currently excepted.

However, the United States has initiated Section 232 investigations on these types of products and may eventually impose specific tariffs on them or on products that incorporate them.

The United States has announced, but paused through August 1, 2025, higher reciprocal tariffs on goods imported from many other countries and jurisdictions including Taiwan, Malaysia, the European Union, Japan and South Korea.

Higher tariffs are also in effect on goods from China (currently 20%) and on goods from Canada and Mexico that do not qualify for duty free entry under the United States-Mexico-Canada Agreement (currently 25%, possibly rising to 30% for Mexico and 35% for Canada beginning August 1, 2025).

Legal challenges to some of these tariffs are currently being heard in U.S.

Significant trade partners such as Mexico, Canada and the European Union have announced plans to impose retaliatory tariffs.

Given this dynamic environment, it is not possible to know with any degree of certainty what the negative direct and indirect consequences of tariffs could be on our business and financial results.

54 unchanged sentences

We have facilities in areas with known seismic activity, such as our headquarters in Seattle, Washington.

We have facilities in areas with known flooding, such as our office in Shanghai, China.

We have a wafer post-processing subcontractor in Thailand, a region with a known, and recent, history of flooding.

1 unchanged sentence

We do not carry insurance covering potential losses caused by pandemics, earthquakes, floods or other disasters.

Covid-19 created significant worldwide economic volatility, uncertainty and disruption, and presented our business with significant risks and challenges.

The Covid-19 global health emergency officially ended in 2023.

However, the Covid-19 experience highlights the significant negative impacts a public health outbreak or pandemic could impose on future market demand and our business results.

Further, the Covid-19 global health emergency, which officially ended in 2023, highlights the significant negative impacts a public health outbreak or pandemic could impose on future market demand and our business results.

Risks Relating to Our Relationships with Partners and End Users

17 unchanged sentences

Our reserve estimates for products stocked by our distributors are based primarily on reports provided to us by those distributors, typically monthly.

If the inventory and resale information our partners and distributors provide is inaccurate, or if we do not receive it in a timely manner, then we may not have a reliable view of products expected to be sold to end users which could ultimately have a negative impact on our operating results.

ultimately have a negative impact on our operating results.

If our partners overestimate demand, they may invest in building too much capacity, which would put pricing pressure on the RAIN industry.

6 unchanged sentences

For example, our operating results may suffer if our efforts developing partner relationships increase our costs but do not increase revenue.

Partner relationships may also include exclusivity provisions, multiple levels of distribution,

discounted pricing or investments in other companies.

Partner relationships may also include exclusivity provisions, multiple levels of distribution, discounted pricing or investments in other companies.

The cost of developing and maintaining these partner relationships may go unrecovered and our efforts may not generate a corresponding revenue increase.

91 unchanged sentences

Any such incident could cause our or our partners’ or end users’ operations to be disrupted and subject any of us to regulatory investigations or proceedings and claims, demands or litigation.

Consequently, we could face potential liability and significant costs

and expenses to remediate or otherwise respond to the incident.

Consequently, we could face potential liability and significant costs and expenses to remediate or otherwise respond to the incident.

Any failure or perceived failure to comply with any privacy- or security-related laws, regulations or contractual or other obligations to which we are or may be subject may result in regulatory actions, claims or litigation;

161 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 March 31, 2025, our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 55.9% of our stock.

As of June 30, 2025, our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 54.3% 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.

They may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests.

This ownership concentration could have the effect of

delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which in turn could have a material adverse effect on our stock price.

This ownership concentration could have the effect of delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attempting to obtain control of us, which in turn could have a material adverse effect on our stock price.

This ownership concentration could also prevent attempts by our stockholders to replace or remove our board of directors or management.

15 unchanged sentences

Anti-takeover provisions in our charter documents and under Delaware or Washington law could prevent, delay or impede an acquisition of us and constrain our stock price.

Provisions of our certificate of incorporation and our bylaws may delay or discourage transactions involving an actual or potential change in our control or in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests.

premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests.

These provisions could, therefore, adversely affect our stock price.

23 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