What changed in this filing

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Item 1A. Risk Factors

2025-08-13 compared with 2025-05-13 · 105 added, 46 removed, 136 unchanged (53% of the section changed)

8 unchanged sentences

Our consolidated financial

statements as of March 31, 2025 have been prepared under the assumption that we will continue as a going concern for the next twelve months.

As of March 31, 2025, we had cash and cash equivalents of $2.8 million and an accumulated deficit of $177.6 million.

statements as of June 30, 2025 have been prepared under the assumption that we will continue as a going concern for the next twelve months.

As of June 30, 2025, we had cash and cash equivalents of $1.8 million and an accumulated deficit of $179.4 million.

We believe that our

existing cash and cash equivalents as of March 31, 2025 and expected receipts associated with forecasted product sales, will enable us

to meet our capital needs into the third quarter of 2025.

existing cash and cash equivalents as of June 30, 2025 and expected receipts associated with forecasted product sales, will enable us

to meet our capital needs into the fourth quarter of 2025.

Our ability to continue as

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could seriously harm our business.

We received an unsolicited, non-binding

proposal to acquire all of the outstanding shares of our common stock.

This action and future actions by stockholders could adversely

affect our business and relationships with our customers, suppliers and employees and divert time from our management.

On June 27, 2025, we confirmed

in a public press release the receipt of an unsolicited, non-binding proposal from Mobix Labs, Inc.

(“Mobix”) to acquire all

of the Company’s issued and outstanding equity securities in exchange for newly issued shares of Mobix common stock, with a fixed

exchange ratio based on the average daily closing price of the Company’s common stock over the 30 calendar days ending on June 11,

2025, plus a 20% premium, or approximately $1.20 per share (the “Mobix Proposal”).

As part of the Company’s exploration

of strategic alternatives, which is described below, the Board is carefully reviewing the Mobix Proposal to determine the course of action

that it believes is in the best interest of the Company and its stockholders.

There can be no assurance that any transaction will be completed

at this price or at any other price with Mobix or any other third party.

Reviewing the Mobix Proposal

has and may continue to divert management’s and our board of directors’ attention and may require us to incur significant

costs related to our engagement of advisors.

Any further actions by Mobix or others may disrupt our business and operations by causing

uncertainty among and potentially loss of current and prospective employees, partners, suppliers and other constituencies important to

our success or delay potential initiatives, transactions or the like that we may pursue.

Any of the foregoing could materially and negatively

impact our business and financial results.

Any perceived uncertainties as to our future direction also may adversely affect the market

price and volatility of our common stock.

Our evaluation of strategic alternatives

may not lead to a favorable outcome and could create business disruption and stock price volatility.

On July 11, 2025, we announced

that our Board has authorized the exploration of strategic alternatives, including a merger, sale of assets or other similar transaction,

all intended to maximize stockholder value and further our business operations.

We retained Craig-Hallum Capital Group LLC as our financial

advisor to assist with the exploration process.

As part of this process, the Board is evaluating the Mobix Proposal.

We currently have

no commitments or agreements and are not negotiating with any parties relating to a merger, sale of assets or other similar transaction

The process of reviewing potential

strategic alternatives may be time-consuming, distracting, and disruptive to our business operations, which may cause concern to our employees,

investors, strategic partners, and other constituencies and may have a material impact on our business and operating results and/or result

in increased volatility in our share price.

We may incur substantial expenses associated with identifying, evaluating, and negotiating

potential strategic alternatives.

There can be no assurance

that our strategic review process will result in any transaction or other strategic outcome.

Any potential transaction would be dependent

on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest

of third parties in a potential transaction with us, obtaining stockholder approval and the availability of financing to third parties

in a potential transaction with us on reasonable terms.

We do not intend to disclose

further developments on this strategic review process unless and until we determine that such disclosure is appropriate or necessary.

If we determine to engage in a transaction as a result of our exploration and evaluation of strategic alternatives, our future business,

prospects, financial position and operating results could be significantly different than those in historical periods or projected by

our management.

Moreover, the review of strategic alternatives may disrupt our business by causing uncertainty among current and potential

employees, suppliers, customers and investors, and could expose us to potential litigation.

The selection and execution of a strategic

alternative may lead to similar disruptions, and parties advocating for alternatives not selected may solicit support for such other alternatives,

causing further disruption.

Until the process is concluded, perceived uncertainties related to our future may result in the loss of potential

business opportunities and volatility in the market price of our common stock and may make it more difficult for us to attract and retain

qualified personnel and business partners.

Further, any alternative strategic paths that may be pursued and completed ultimately may not

deliver the anticipated benefits or enhance stockholder value.

The occurrence of any one

or more of the above risks could have a material adverse impact on our business, financial condition, results of operations and cash flows.

If we are unable to satisfy the continued

listing requirements of the Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely

listing requirements of Nasdaq, our common stock could be delisted and the price and liquidity of our common stock may be adversely affected.

Our common stock may lose

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a minimum bid price of $1 per share, as set forth in Nasdaq Listing Rule 5550(a)(2).

In accordance with Nasdaq

Listing Rule 5810(c)(3)(A), we have been provided a period of 180 calendar days, or until October 1, 2025, in which to regain compliance.

In order to regain compliance with the minimum bid price requirement, the closing bid price of our common stock must be at least $1 per

share for a minimum of ten consecutive business days during this 180-day period.

In the event we do not regain compliance within this

180-day period, we may be eligible to seek an additional compliance period of 180 calendar days provided we meet 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 if we provide written notice to Nasdaq of our intent to cure the deficiency during this second compliance

period by effecting a reverse stock split, if necessary.

However, if it appears to the Nasdaq staff that we will not be able to cure the

deficiency, or if we are otherwise not eligible, Nasdaq will provide notice to us that our common stock will be subject to delisting.

The above mentioned letter

does not result in the immediate delisting of our common stock from the Nasdaq Capital Market.

We are monitoring the closing bid price

of our common stock and considering our available options in the event the closing bid price of our common stock remains below $1 per

On June 18, 2025, we received a notification letter

from Nasdaq notifying us that we had regained compliance with the minimum bid price requirement.

There can be no assurance

that we will be able to regain compliance with the minimum bid price requirement, maintain compliance with the other continued listing

requirements of Nasdaq, or that our common stock will not be delisted in the future.

that we will be able to maintain compliance with the minimum bid price requirement and other continued listing requirements of Nasdaq,

or that our common stock will not be delisted in the future.

If we were to be delisted,

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Additionally, we could face significant material adverse consequences, including:

● a limited availability of market quotations for our common stock;

● a decreased ability to issue additional securities or obtain

additional financing in the future;

● a limited availability of market

quotations for our common stock;

● a decreased ability to issue

additional securities or obtain additional financing in the future;

● reduced liquidity for our stockholders;

● potential loss of confidence by customers, collaboration partners

and employees;

● loss of institutional investor interest.

● potential loss of confidence

by customers, collaboration partners and employees;

● loss of institutional investor

In the event of a delisting,

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As a result, we commenced an end-of-life (“EOL”) of our memory products in

2025, we fulfilled all outstanding EOL orders for our memory IC products.

We do not expect any further shipments or to generate

any meaningful revenue from shipments of our memory IC products after March 2025.

For the three months ended March 31, 2025 and 2024,

our memory IC products represented over 58% and 84% of our revenues, respectively.

The discontinuation of the production and sale of our

memory IC products will negatively impact our future revenues, results of operations and cash flows.

In March 2025, we fulfilled all outstanding EOL orders for our memory IC products.

We do not expect any further shipments

or to generate any meaningful revenue from shipments of our memory IC products after March 2025.

For the six months ended June 30, 2025

and 2024, our memory IC products represented approximately 38% and 86% of our revenues, respectively.

The discontinuation of the production

and sale of our memory IC products will negatively impact our future revenues, results of operations and cash flows.

We have a history of losses, and we will

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We incurred net losses of approximately

$0.5 million for the three months ended March 31, 2025 and $10.7 million for the year ended December 31, 2024, and we had an accumulated

deficit of approximately $177.6 million as of March 31, 2025.

$2.3 million for the six months ended June 30, 2025 and $10.7 million for the year ended December 31, 2024, and we had an accumulated

deficit of approximately $179.4 million as of June 30, 2025.

These and prior-year losses have resulted in significant negative

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may not be available to us at all or only on unfavorable terms.

Our recent reduction in force undertaken

to significantly reduce our ongoing operating expenses may not result in our intended outcomes and may yield unintended consequences and

additional costs.

Our reduction in force undertaken to significantly

reduce our ongoing operating expenses may not result in our intended outcomes and may yield unintended consequences and additional costs.

In November 2023, we implemented

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remaining Employees that their employment would be terminated.

The accrued severance costs are expected to be paid through July 2025.

The remaining severance liabilities as of June 30, 2025 were paid in July

As a result of the decision

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software would not be utilized during the remaining license terms.

During the three months ended June 30, 2024, we expensed the value

of the remaining contractual liabilities and recorded liabilities of approximately $1.6 million.

As of March 31, 2025, we had a remaining

liability of approximately $0.6 million, and we expect to pay these license fees through September 30, 2025.

During the six months ended June 30, 2024, we expensed the value of

the remaining contractual liabilities and recorded liabilities of approximately $1.6 million.

During the three months ended June 30, 2025,

a licensor terminated one of the license agreements and initiated a refund of approximately $56,300 for amounts previously paid by us.

As a result, we reversed approximately $222,600 of expense and approximately $166,300 of the related contractual liabilities for this

licensor during the three months ended June 30, 2025.

As of June 30, 2025, the remaining contractual liabilities of approximately $0.2

million and $0.2 million were included in accrued expenses and other (see Note 3 to the condensed consolidated financial statements) and

accounts payable, respectively, which are expected to be paid by September 30, 2025.

In addition to the costs associated

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In addition, tariffs and other trade developments have and may continue to

heighten the risks related to the other risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2024.

heighten the risks related to the other risk factors described elsewhere in this “ Risk Factors ” section and in Part

I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.

Unregistered Sales of Equity Securities

and Use of Proceeds

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 1A. Risk Factors