What changed in this filing

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Item 1. Legal Proceedings

2025-10-29 compared with 2025-07-30 · 55 added, 39 removed, 597 unchanged (14% of the section changed)

51 unchanged sentences

We cannot guarantee we will be able to provide sufficient support for future products, in which case our operating results could suffer.

Our ability to deliver enterprise solutions at scale are nascent.

Our ability to deliver enterprise solutions at scale is nascent.

We believe we are still at a very early stage in our ability to deliver enterprise solutions.

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Changes in our product mix could adversely affect our overall gross margin.

Endpoint IC sales, which constitute and likely will continue to constitute the majority of our product revenue, have, for the most part, lower gross margins than our systems product sales.

Our overall product gross margins are affected by product mix, which can fluctuate based on supply and demand, competitive pressures and end-user needs and demand.

A shift in sales mix away from our higher margin products to lower margin products, either within our endpoint IC product portfolio or from our systems business to our endpoint ICs, could negatively affect our gross margins.

Endpoint IC sales constitute and likely will continue to constitute the majority of our product revenue.

For the most part, our endpoint ICs have historically had lower gross margins than our systems products but that may change in the future as we diversify our endpoint IC and systems products.

A shift in sales mix away from our higher margin products to lower margin products, either within our endpoint IC product portfolio or between our systems business and our endpoint ICs, could negatively affect our gross margins.

Poor product quality could result in significant costs to us and impair our ability to sell our products.

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Even when convinced, they often undertake long pilot programs and qualifications prior to placing orders.

These pilot programs and qualifications can be time-consuming and expensive, and there is no assurance they will result in an order for our products.

These pilot programs and qualifications can be time-consuming and expensive, and there is no assurance they will

result in an order for our products.

If we fail to develop new products that adequately or competitively address end users’ or our partners’ needs, then we may not receive product orders, which could adversely affect our business, prospects and operating results.

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In April 2024, NextNav Inc.

asked the Federal Communications Commission, or FCC, to initiate a proceeding to reconfigure the 902–928 MHz ISM band, or Lower 900 MHz Band, in which we and other unlicensed services operate, to create a terrestrial backup to the U.S.

Global Positioning System to provide positing, navigation and timing, or PNT, data.

To pay for their proposed system, NextNav also asked to be able to license certain spectral bands, including parts of the Lower 900 MHz Band, to others to deliver 5G

broadband services.

To pay for their proposed system, NextNav also asked to be able to license certain spectral bands, including parts of the Lower 900 MHz Band, to others to deliver 5G broadband services.

If approved as proposed, this ISM band reconfiguration could interfere with our RAIN radio transmissions and negatively impact us and our industry.

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The NOI process will delay consideration of NextNav’s petition.

The fate of NextNav’s petition is uncertain at this time, but if the FCC were to adopt NextNav's proposal and our end users were not able to use our RAIN products without harmful interference, then our business would be significantly and negatively affected.

The fate of NextNav’s petition is uncertain at this time, but if the FCC were to take material steps toward considering, or ultimately adopting NextNav’s proposal, our business could be significantly and negatively affected.

Sales of some of our products could cannibalize revenue from other products.

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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 have been fortunate to have hired and retained many such employees in our 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.

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

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

Overall, a full understanding of whether and when tariffs and other trade restrictions 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.

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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.

The United States has paused through August 7, 2025, higher reciprocal tariffs on goods imported from many other countries and jurisdictions including Taiwan, Malaysia, the European Union, Japan and South Korea.

However, following the pause, higher reciprocal tariffs generally went into effect.

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.

Significant trade partners such as Mexico, Canada and the European Union have imposed, or 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 and other trade restrictions could be on our business and financial results.

We believe the direct impact of U.S.

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A loss at any of these or other of our or our suppliers’ facilities could disrupt operations, delay production and shipments, reduce revenue and engender potentially large expenses.

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

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.

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

Utilizing emerging technologies such as artificial intelligence, or AI, or machine learning, or ML, could expose us to business, financial, legal or reputational risks.

Emerging technologies such as AI or ML offer great potential for improving our operating efficiency and effectiveness, as well as the design and usefulness of our products and services;

however, employing them could increase our business, financial, legal and other risks.

These technologies are new, and our use of them has been very limited to date.

As we begin to introduce more AI and ML tools into our operations and products going forward, we will have to guard against risks associated with using them.

These risks include potential security breaches, confidential or sensitive data disclosure, inaccuracies or improper bias in our operations or in data derived from using our products or services, legal claims, noncompliance with industry standards, complications establishing or asserting intellectual property ownership, and reputational harm.

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.

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

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For example, we license tools from design-automation software vendors to design our silicon ICs.

Third-party licenses for patents, software and other technology important to our business may not continue to be available on commercially reasonable terms or may not be available at all.

Third-party licenses for patents,

software and other technology important to our business may not continue to be available on commercially reasonable terms or may not be available at all.

Loss of any such licenses could cause manufacturing interruptions or delays or reductions in product shipments until we can develop, license, integrate and deploy alternative technologies which, if even possible, could harm our business and operating results.

Our use of open-source software may expose us to additional risks and weaken our intellectual property rights.

Our use of open-source software and AI tools may expose us to additional risks and weaken our intellectual property rights.

Our products, processes and technology sometimes use or incorporate software that is subject to an open-source license.

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We cannot guarantee that we have incorporated open-source software in a manner that is consistent with our policies and procedures relative to such open-source software, or in a manner that will not subject us to liability.

AI tools could also expose us to intellectual property claims being brought against us or make it more difficult to establish or assert ownership of intellectual property we develop.

Risks Relating to Privacy and Cybersecurity

19 unchanged sentences

More generally, the data security and privacy legislative and regulatory landscape in the United States, EU and other jurisdictions continues evolving.

Aspects of key privacy laws and regulations—including the California Consumer Privacy Act of 2018, the California Privacy Rights Act, similar privacy laws enacted in other states and the EU General Data Protection Regulation—remain unclear as of the date of this report and continue evolving, potentially with far-reaching implications.

Aspects of key laws and regulations addressing data security and privacy—including, for example, the California Consumer Privacy Act of 2018, the California Privacy Rights Act, similar laws enacted in other states and the EU General Data Protection Regulation—remain unclear as of the date of this report and continue evolving, potentially with far-reaching implications.

Laws and regulations relating to privacy, data protection and security;

1 unchanged sentence

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.

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 relating to privacy, data protection or security may result in claims or litigation;

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 relating to privacy, data protection or security may result in claims or litigation;

actions against us by governmental entities;

82 unchanged sentences

For example, in August 2022, as part of the Inflation Reduction Act of 2022, the United States enacted a 1% excise tax on stock buybacks and a 15% alternative minimum tax on adjusted financial statement income.

Additionally, beginning in 2022, the Code eliminated the right to deduct research and development expenditures and instead requires taxpayers to capitalize and amortize U.S.

Additionally, beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the right to deduct research and development expenditures and instead required taxpayers to capitalize and amortize U.S.

and foreign research and development expenditures over five and 15 tax years, respectively.

However, more recent legislation commonly known as the “One Big Beautiful Bill Act”, or the OBBB Act, among other changes, added Section 174A to the Code, permitting the deduction of certain U.S.

research and development expenditures incurred in tax years beginning on or after January 1, 2025, but expenditures attributable to research and development conducted outside the U.S.

continue to be required to be capitalized and amortized over a 15-year period.

We are currently evaluating the full impact of the OBBB Act on us.

We have accounted for these changes in accordance with our understanding of the guidance available as of the date of this filing and as described in more detail in our financial statements.

The CHIPS and Science Act, enacted August 9, 2022, provides tax credits for semiconductor manufacturing activities within the United States, but because we outsource our semiconductor manufacturing we do not expect to be entitled to these tax credits.

Many countries, as well as organizations such as the Organization for Economic Cooperation and Development, have implemented or proposed changes to existing tax laws, including a 15% global minimum tax.

Many countries, as well as organizations such as the Organization for Economic Cooperation and Development, or the OECD, have implemented or proposed changes to existing tax laws, including a 15% global minimum tax for multinational companies with annual global revenue exceeding certain thresholds.

We continue to monitor these developments, including the impact of the joint statement issued by the G7 in June 2025 related to the interplay between the U.S.

international tax system and global rules.

Any of these developments or changes in U.S.

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We do not collect sales and use, value-added or similar taxes in all jurisdictions in which we have sales, based on our belief that such taxes are either not applicable or an exemption from such taxes applies.

Certain jurisdictions may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future, including as a result of a change in law.

Certain jurisdictions may assert that such taxes are applicable, which could result in tax assessments, penalties and interest, and we may be required to collect such taxes in the future,

including as a result of a change in law.

Such tax assessments, penalties and interest or future requirements may negatively affect our operating results.

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• general economic conditions and slow or negative growth in the markets in which we operate.

Technology stocks like ours have experienced extreme price and volume fluctuations, often unrelated or disproportionate to the company’s underlying operating performance.

Technology stocks like ours have experienced extreme price and volume fluctuations, often unrelated or disproportionate to our underlying operating performance.

Stock price volatility can cause stockholders to institute securities class-action litigation or stockholder derivative litigation, as occurred to us between 2018 and 2020.

If any of our stockholders were to sue us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management, harm our operating results and negatively impact the trading price of our common stock.

Transactions relating to the 2021 Notes may affect our stock’s value.

If the 2021 Notes are converted by holders, then we are entitled to deliver cash, stock or any combination of cash or stock, at our election.

Transactions relating to the 2021 or the 2025 Notes may affect our stock’s value.

If the 2021 Notes or the 2025 Notes are converted by holders, then we are entitled to deliver cash, stock or any combination of cash or stock, at our election.

If we elect to deliver stock, the ownership interests of our existing stockholders will be diluted, and public market sales of stock issued upon a conversion could decrease our stock price.

Anticipated future conversions of the 2021 Notes into stock could also decrease our stock price, as could short selling by holders of the 2021 Notes to hedge their positions.

In December 2019, we issued the 2019 Notes.

When we did so, we entered into privately negotiated capped-call transactions with financial counterparties to mitigate the dilutive impact on the Company above a given stock price.

We left those capped-call transactions intact after we acquired the remainder of the outstanding 2019 Notes in June 2022.

From time to time, the financial counterparties to the capped calls may modify their hedge positions by entering into or unwinding various derivative transactions involving our stock or by purchasing or selling our stock or other securities of ours in secondary market transactions prior to the maturity of the capped calls.

Anticipated future conversions of the 2021 Notes or the 2025 Notes into stock could also decrease our stock price, as could short selling by holders of the 2021 Notes or the 2025 Notes to hedge their positions.

In December 2019, we issued the 2019 Notes, and in September 2025, we issued the 2025 Notes.

At the time of each issuance, we entered into privately negotiated capped call transactions with financial counterparties to mitigate the dilutive impact above a given stock price.

We left the capped call transactions related to the 2019 Notes issuance intact after we acquired the remainder of the outstanding 2019 Notes in June 2022.

From time to time, the financial counterparties to the capped call transactions may modify their hedge positions by entering into or unwinding various derivative transactions involving our stock or by purchasing or selling our stock or other securities of ours in secondary market transactions prior to the maturity of the capped call transactions.

This activity could cause a decrease in our stock price.

For more information on the 2019 Notes, the 2021 Notes and the capped-call transactions, see Note 8 of our consolidated financial statements included elsewhere in this report.

For more information on the 2019 Notes, the 2021 Notes, the 2025 Notes and the capped call transactions, see Note 7 of our consolidated financial statements included elsewhere in this report.

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

As of September 30, 2025, our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 51.0% 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.

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

We may not have sufficient cash flow or access to cash necessary to satisfy our obligations under the 2021 Notes, and our current and future indebtedness may restrict our business.

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance any current or future indebtedness, including the 2021 Notes, or to make cash payments in connection with any conversion of the 2021 Notes or upon any fundamental change if holders require us to repurchase their 2021 Notes for cash, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.

We may not have sufficient cash flow or access to cash necessary to satisfy our obligations under the 2021 Notes and the 2025 Notes, and our current and future indebtedness may restrict our business.

Our ability to make scheduled payments of the principal of, to pay interest on or to refinance any current or future indebtedness, including the 2021 Notes and the 2025 Notes, or to make cash payments in connection with any conversion of the 2021 Notes or the 2025 Notes or upon any fundamental change if holders require us to repurchase their 2021 Notes or 2025 Notes for cash, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control.

Our business may not generate sufficient future cash from operations to service our indebtedness and make necessary capital expenditures.

If we are unable to generate sufficient cash flow, then we may be required to pursue other alternatives, such as selling assets, restructuring indebtedness or obtaining additional equity capital on terms that may be onerous or highly dilutive.

Our ability to refinance any of our indebtedness, including the 2021 Notes, will depend on the capital markets and our financial condition at that time.

Our ability to refinance any of our indebtedness, including the 2021 Notes and the 2025 Notes, will depend on the capital markets and our financial condition at that time.

We may not be able to pursue these alternatives on favorable terms or at all, which could result in us defaulting on our debt obligations.

1 unchanged sentence

For example, it could:

• make it more difficult for us to satisfy our debt obligations, including the 2021 Notes;

• make it more difficult for us to satisfy our debt obligations, including the 2021 Notes and the 2025 Notes;

• increase our vulnerability to general adverse economic and industry conditions;

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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.

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

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.

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