[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited financial statements for Q3 2023 show decreased assets and equity, increased net losses, and declining revenues, with improved operating cash flow [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2023 | Mar 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $24,669 | $27,212 | ($2,543) | | Total current assets | $35,239 | $41,875 | ($6,636) | | Total assets | $53,100 | $59,876 | ($6,776) | | Total current liabilities | $6,402 | $7,202 | ($800) | | Total liabilities | $7,735 | $8,504 | ($769) | | Total stockholders' equity | $45,365 | $51,372 | ($6,007) | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Three Months Ended September 30, (in thousands, except per share) | Metric | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Net revenues | $5,708 | $8,953 | -36.2% | | Gross profit | $3,121 | $5,602 | -44.3% | | Loss from operations | ($4,093) | ($3,205) | +27.7% | | Net loss | ($4,055) | ($3,228) | +25.6% | | Diluted net loss per share | ($0.16) | ($0.13) | +23.1% | Six Months Ended September 30, (in thousands, except per share) | Metric | 2023 | 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Net revenues | $11,295 | $17,862 | -36.8% | | Gross profit | $6,190 | $10,967 | -43.6% | | Loss from operations | ($9,232) | ($7,147) | +29.2% | | Net loss | ($9,165) | ($7,204) | +27.2% | | Diluted net loss per share | ($0.37) | ($0.29) | +27.6% | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Six Months Ended September 30, Cash Flow Summary (in thousands) | Cash Flow Activity | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | ($6,295) | ($8,373) | +$2,078 | | Net cash provided by investing activities | $2,126 | $4,026 | ($1,900) | | Net cash provided by financing activities | $1,626 | $179 | +$1,447 | | Net decrease in cash and cash equivalents | ($2,543) | ($4,168) | +$1,625 | | Cash and cash equivalents at end of period | $24,669 | $32,803 | ($8,134) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue recognition, balance sheet components, and key disclosures including SRAM product concentration, Nokia as a major customer, and a new Space Development Agency agreement - Substantially all revenue is derived from sales of SRAM products, accounting for approximately **98% of total revenues** in the first six months of fiscal 2024[47](index=47&type=chunk) - Nokia is the largest customer, representing **27% of net revenues** in the six months ended September 30, 2023, up from 14% in the same period of 2022[48](index=48&type=chunk) - In June 2023, the company entered into a prototype agreement with the Space Development Agency, which includes milestone payments totaling an estimated **$1.25 million**. The company recognized **$260,000** as a reduction to R&D expense in the quarter[91](index=91&type=chunk)[92](index=92&type=chunk) Revenue by Customer Type (Six Months Ended Sep 30, in thousands) | Customer Type | 2023 | 2022 | | :--- | :--- | :--- | | Contract manufacturers | $3,274 | $3,206 | | Distribution | $7,970 | $14,118 | | OEMs | $51 | $538 | | **Total** | **$11,295** | **$17,862** | Revenue by Geographic Area (Six Months Ended Sep 30, in thousands) | Region | 2023 | 2022 | | :--- | :--- | :--- | | United States | $6,035 | $8,601 | | China | $481 | $1,198 | | Singapore | $952 | $3,510 | | Netherlands | $1,955 | $1,457 | | Germany | $1,550 | $2,452 | | Rest of the world | $322 | $644 | | **Total** | **$11,295** | **$17,862** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue decline due to economic factors and buffer stock, focusing on new APU product development, cost reduction, and maintaining a debt-free balance sheet [Overview](index=33&type=section&id=Overview) - The company is a leading provider of semiconductor memory solutions (SRAMs) and is developing in-place associative computing (APU) products for AI and HPC markets[94](index=94&type=chunk) - Revenues have been negatively impacted by the global economic environment, including inflationary pressures and rising interest rates, as well as customers working through buffer stock purchased during prior supply chain shortages[95](index=95&type=chunk) - In June 2023, the company received a prototype agreement award from the Space Development Agency (SDA) for the development of its next-generation APU2, with milestone payments totaling an estimated **$1.25 million**[96](index=96&type=chunk) - Cost reduction measures announced in November 2022, including a **15% workforce reduction**, were implemented to reduce annualized operating expenses by approximately **$7.0 million** and focus resources on APU technology[100](index=100&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Comparison of Results of Operations (Three Months Ended Sep 30) | Metric | 2023 (in thousands) | 2022 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Net Revenues | $5,708 | $8,953 | -36.2% | | Gross Profit | $3,121 | $5,602 | -44.3% | | Gross Margin | 54.7% | 62.6% | -7.9 p.p. | | R&D Expenses | $4,700 | $6,400 | -26.6% | | SG&A Expenses | $2,500 | $2,400 | +4.6% | Comparison of Results of Operations (Six Months Ended Sep 30) | Metric | 2023 (in thousands) | 2022 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Net Revenues | $11,295 | $17,862 | -36.8% | | Gross Profit | $6,190 | $10,967 | -43.6% | | Gross Margin | 54.8% | 61.4% | -6.6 p.p. | | R&D Expenses | $9,900 | $13,000 | -24.0% | | SG&A Expenses | $5,500 | $5,100 | +8.4% | - The decrease in net revenues was attributed to the current economic environment and customers working through buffer stock purchased during prior supply chain constraints[115](index=115&type=chunk) - The decrease in gross margin was primarily due to changes in the mix of products and customers, with the prior year period benefiting from higher-margin radiation hardened SRAM shipments[118](index=118&type=chunk) - Research and development expenses decreased significantly due to cost reduction measures implemented in November 2022 and were partially offset by funding from the SDA award[119](index=119&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2023, principal sources of liquidity were cash, cash equivalents, and short-term investments totaling **$25.3 million**, down from **$30.6 million** at March 31, 2023[125](index=125&type=chunk) - Net cash used in operating activities for the six months ended September 30, 2023, was **$6.3 million**, an improvement from **$8.4 million** used in the prior-year period[126](index=126&type=chunk) - Net cash provided by financing activities was **$1.6 million**, primarily from the issuance of common stock under employee plans and an At-the-Market (ATM) offering[129](index=129&type=chunk) - The company believes existing cash and expected cash flow will be sufficient to meet working capital and capital expenditure needs for at least the next 12 months[130](index=130&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces minimal foreign currency exchange risk and immaterial interest rate risk due to USD-denominated transactions and a short-term investment portfolio - The company has relatively little exposure to currency exchange risks as revenues and most expenses are denominated in U.S. dollars. It does not currently use hedging instruments[137](index=137&type=chunk) - Interest rate sensitivity is considered not material due to the short-term nature of the **$25.3 million** in cash, cash equivalents, and short-term investments. A **100 basis point** change in interest rates is not expected to materially affect the portfolio's fair value[138](index=138&type=chunk)[140](index=140&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of September 30, 2023, due to an un-remediated material weakness in reviewing forecasts for contingent consideration and impairment testing - Management concluded that disclosure controls and procedures were **not effective** as of September 30, 2023[142](index=142&type=chunk) - The ineffectiveness is due to a material weakness, first identified in fiscal 2022 and still un-remediated, related to inadequate controls over the review of forecasts used to calculate contingent consideration liability and test goodwill and intangible assets for impairment[143](index=143&type=chunk) - A remediation plan is underway, which includes enhancing management's review controls over the forecasts. The material weakness will not be considered remediated until the new controls operate effectively for a sufficient period[144](index=144&type=chunk) [PART II — OTHER INFORMATION](index=49&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from unpredictable operating results, heavy customer reliance, global economic and geopolitical instability, internal control weaknesses, single-source suppliers, and new product development challenges [Risks Related to Our Business and Financial Condition](index=53&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Financial%20Condition) - Operating results fluctuate unpredictably, with quarterly net revenues ranging from **$5.4 million to $9.0 million** and operating losses from **$2.9 million to $5.1 million** in the last ten fiscal quarters[158](index=158&type=chunk) - The company's largest customer, Nokia, accounted for **27% of net revenues** in the six months ended September 30, 2023. A reduction in purchases from Nokia would significantly harm operating results[165](index=165&type=chunk) - A material weakness in internal control over financial reporting related to the review of forecasts remains un-remediated as of September 30, 2023, which could impair the ability to produce timely and accurate financial statements[171](index=171&type=chunk) - The business is expected to be materially and adversely affected by rising interest rates, worldwide inflation, the conflict in Israel, and the decline in the global economic environment[166](index=166&type=chunk) [Risks Related to Manufacturing and Product Development](index=72&type=section&id=Risks%20Related%20to%20Manufacturing%20and%20Product%20Development) - The company is dependent on single-source suppliers for key components, most significantly obtaining wafers for its SRAM and APU products from a single foundry, **TSMC**[179](index=179&type=chunk) - Difficulties in transitioning to smaller geometry process technologies could result in reduced manufacturing yields, product delivery delays, and increased expenses[221](index=221&type=chunk) - Complex products may contain design or manufacturing defects, which could lead to loss of revenues, significant warranty costs, and harm to customer relationships[225](index=225&type=chunk) [Risks Related to Our International Business and Operations](index=74&type=section&id=Risks%20Related%20to%20Our%20International%20Business%20and%20Operations) - Software development for APU products occurs in Israel, and the evolving military conflict with Hamas that began on October 7, 2023, could harm the business, customers, and operations[226](index=226&type=chunk) - A significant portion of manufacturing and testing is conducted in Taiwan, making the business vulnerable to political, social, and economic changes, including potential conflicts involving the People's Republic of China[227](index=227&type=chunk) - International business, which accounted for **46.6% of net revenues** in the first six months of fiscal 2024, exposes the company to risks such as political instability, tariffs, trade barriers, and foreign exchange fluctuations[230](index=230&type=chunk)[233](index=233&type=chunk) [Risks Relating to Our Common Stock and the Securities Market](index=78&type=section&id=Risks%20Relating%20to%20Our%20Common%20Stock%20and%20the%20Securities%20Market) - The trading price of the company's common stock is subject to significant fluctuation and volatility[239](index=239&type=chunk) - As of October 31, 2023, executive officers, directors, and their affiliates beneficially owned approximately **32%** of the outstanding common stock, allowing them to exercise substantial influence over corporate matters[242](index=242&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=83&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased under the company's authorized stock repurchase program during the quarter ended September 30, 2023 - The company did not repurchase any of its shares under its authorized stock repurchase program during the quarter ended September 30, 2023[248](index=248&type=chunk) [Item 6. Exhibits](index=83&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - The exhibits filed with the report include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as various Inline XBRL data files[249](index=249&type=chunk)

GSI Technology, Inc. (NASDAQ:GSIT) Q2 2024 Earnings Conference Call October 26, 2023 4:30 PM ET Company Participants Lee-Lean Shu - Chairman, President and CEO Didier Lasserre - VP of Sales Douglas Schirle - CFO Conference Call Participants Brett Reiss - Janney Montgomery Scott Orin Hirschman - AIGH Investment Partners Operator Ladies and gentlemen, thank you for standing by. Welcome to GSI Technology's Second Quarter Fiscal 2024 Results Conference Call. [Operator Instructions] Before we begin today's cal ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33387 GSI Technology, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorpor ...

GSI Technology, Inc. (NASDAQ:GSIT) Q1 2024 Earnings Conference Call July 27, 2023 4:30 PM ET Company Participants Lee-Lean Shu - Chairman, President and CEO Douglas Schirle - CFO Didier Lasserre - VP of Sales Conference Call Participants Nick Doyle - Needham and Company Jeff Bernstein - TD Cowen Operator Ladies and gentlemen, thank you for standing by. Welcome to GSI Technology's First Quarter Fiscal 2024 Results Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33387 GSI Technology, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorp ...

Financial Data and Key Metrics Changes - For Q4 2023, the company reported a net loss of $4 million, or $0.16 per diluted share, on net revenues of $5.4 million, compared to a net loss of $3 million, or $0.12 per diluted share, on net revenues of $8.7 million in Q4 2022 [38] - Gross margin was 55.9% in Q4 2023, down from 58.6% in the prior-year period, primarily due to lower revenue affecting fixed costs [39] - For the fiscal year 2023, the company reported a net loss of $16 million, or $0.65 per diluted share, on net revenues of $29.7 million, compared to a net loss of $16.4 million, or $0.67 per diluted share, on net revenues of $33.4 million in fiscal 2022 [41] Business Line Data and Key Metrics Changes - Sales to Nokia were $1.2 million, or 21.8% of net revenues, down from $2.0 million, or 23.1% in the same period a year ago [34] - Military/defense sales constituted 44.2% of fourth-quarter shipments, up from 22.3% in the comparable period a year ago [34] - SigmaQuad sales were 46.3% of fourth-quarter shipments, slightly down from 47.6% in Q4 2022 [34] Market Data and Key Metrics Changes - The company has sharpened its focus on applications with high revenue potential, such as synthetic aperture radar (SAR) and satellites, where it has a superior solution [11] - The company is actively exploring various options to create shareholder value and is committed to driving sustained growth and innovation [26] Company Strategy and Development Direction - The company is on track to complete the tape-out for Gemini-II by the second half of 2024, which is expected to provide significant enhancements over Gemini-I [14] - Future versions of the APU are expected to cater to larger markets, including edge applications and large language models (LLM) for natural language processing [20][16] - The company is improving its SearchiumAI SaaS platform to support its go-to-market strategy for search, aiming to develop partnerships with key players [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged setbacks and unforeseen delays with the APU but emphasized learning from these experiences to better approach target customers [10] - The company is optimistic about generating modest revenue from the search engine market in fiscal year 2024, driven by positive reception of its APU plug-in [13] - Management highlighted the transformative potential of large language models and the opportunities they present for future APU versions [16] Other Important Information - The company has added a new distributor for its Radiation Hard and Tolerant SRAM in the European market [4] - A recent contract with the Air and Space Force could be worth up to $1.25 million, with revenue recognized as milestones are achieved [33] Q&A Session Summary Question: Are all costs related to the tape-out and testing volume production for Gemini-II included in the current outlook? - Yes, most R&D spending is on Gemini-II, with a tape-out expected to cost about $2.5 million [48] Question: What applications are seeing traction with Gemini-II, specifically in ADAS and large language models? - ADAS is a target application, likely to be pursued with a partner, and the technology is applicable for large language models [50] Question: What is the timeline for the rad hard roadmap for the product mentioned in the EU? - The rad hard and rad-tolerant SRAMs are available today, with full radiation testing planned for the second half of the year [52] Question: Can you provide an update on the Elta SAR application? - The company has SAR demos available, but interactive features for loading custom data are still in development [85] Question: Any updates on scientific applications with universities? - The company is not focusing heavily on the university market due to larger revenue opportunities elsewhere, but there are two applications in genomics being explored [98]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) For the nine months ended December 31, 2022, the company reported a net loss and slight revenue decrease, with declining assets and equity, yet maintained a debt-free balance sheet [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2022, the company experienced a decrease in total assets, liabilities, and stockholders' equity compared to March 31, 2022, primarily driven by reduced cash and investments Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Mar 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $31,870 | $36,971 | ($5,101) | | Total current assets | $46,362 | $54,691 | ($8,329) | | Total assets | $64,148 | $76,422 | ($12,274) | | **Liabilities & Equity** | | | | | Total current liabilities | $7,144 | $8,861 | ($1,717) | | Total liabilities | $9,348 | $11,971 | ($2,623) | | Total stockholders' equity | $54,800 | $64,451 | ($9,651) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the third quarter of fiscal 2023, net revenues decreased, leading to a net loss, while for the nine-month period, net revenues were flat and the net loss narrowed Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2021 | Nine Months Ended Dec 31, 2022 | Nine Months Ended Dec 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net revenues | $6,447 | $8,065 | $24,309 | $24,653 | | Gross profit | $3,706 | $4,462 | $14,673 | $13,421 | | Loss from operations | ($4,789) | ($4,532) | ($11,936) | ($13,410) | | Net loss | ($4,812) | ($4,581) | ($12,016) | ($13,357) | | Net loss per share (Basic & Diluted) | ($0.20) | ($0.19) | ($0.49) | ($0.55) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended December 31, 2022, net cash used in operating activities increased, while investing activities provided significant cash due to investment maturities Cash Flow Summary for Nine Months Ended Dec 31 (in thousands) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($12,245) | ($9,942) | | Net cash provided by (used in) investing activities | $6,742 | ($320) | | Net cash provided by financing activities | $402 | $2,353 | | **Net decrease in cash and cash equivalents** | **($5,101)** | **($7,909)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, revenue recognition with SRAM products as the primary source and Nokia as a key customer, and disclose a goodwill impairment test and workforce reduction - The majority of revenue is derived from **SRAM products**, representing **97%** of total revenues for the nine months ended December 31, 2022[45](index=45&type=chunk) - **Nokia** is the largest customer, accounting for approximately **16%** of net revenues in the nine months ended December 31, 2022, down from 31% in the prior year period[46](index=46&type=chunk) - Due to a sustained decline in the company's stock price, a quantitative goodwill impairment assessment was performed as of December 1, 2022, which concluded there was **no impairment**[57](index=57&type=chunk)[59](index=59&type=chunk) - In November 2022, the company initiated cost reduction measures, including an approximate **15% reduction** in its global workforce, incurring **$0.3 million** in severance charges during the quarter[55](index=55&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a quarterly revenue decrease, improved gross margin, focus on new APU products, and a strong liquidity position despite operating losses [Overview](index=30&type=section&id=Overview) The company provides semiconductor memory solutions, focusing on SRAMs and new APU products, and has initiated cost reduction measures, including a workforce reduction, in response to macroeconomic challenges - The company's primary business is providing semiconductor memory solutions, including **Very Fast SRAMs** and new **APU products** for AI and HPC applications[86](index=86&type=chunk) - Business is negatively impacted by the military conflict in Ukraine, rising energy prices, worldwide inflation, rising interest rates, and the ongoing COVID-19 pandemic[89](index=89&type=chunk)[112](index=112&type=chunk) - In November 2022, the company announced cost reduction initiatives expected to save approximately **$7.0 million annually**, including a **15% workforce reduction**, to focus resources on APU technology[91](index=91&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Net revenues for Q3 FY23 decreased due to economic conditions, while the nine-month gross margin improved due to a favorable product mix, and R&D and SG&A expenses saw varied changes Key Operational Changes (YoY) | Metric | Three Months Ended Dec 31, 2022 | Nine Months Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net Revenues | -20.1% | -1.4% | | Gross Profit | -16.9% | +9.3% | | Gross Margin | 57.5% (vs 55.3%) | 60.4% (vs 54.4%) | | R&D Expenses | -10.1% | +2.1% | | SG&A Expenses | +4.4% | -7.0% | - The increase in gross margin for the nine-month period was primarily due to a **favorable product mix**, including shipments of higher-margin radiation-hardened SRAMs[116](index=116&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2022, the company had **$35.2 million** in cash and investments with no debt, and expects sufficient liquidity for the next 12 months despite increased cash used in operations - Principal sources of liquidity as of December 31, 2022, were cash, cash equivalents, and short-term investments totaling **$35.2 million**[123](index=123&type=chunk) - Net cash used in operating activities was **$12.2 million** for the nine months ended December 31, 2022, compared to $9.9 million for the same period in the prior year[124](index=124&type=chunk) - The company has a potential contingent consideration liability of **$1.9 million** related to the MikaMonu acquisition, payable through December 2025 based on revenue targets[131](index=131&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports minimal exposure to market risks, with low foreign currency exchange risk and immaterial interest rate risk due to its short-term investment portfolio - The company has relatively little exposure to currency exchange risks as most transactions are denominated in **U.S. dollars**[136](index=136&type=chunk) - Due to the short-term nature of its **$35.2 million** in investments, management believes there is no material exposure to changes in fair value from interest rate fluctuations[137](index=137&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of December 31, 2022, due to an unremediated material weakness in internal control over financial reporting - Management concluded that disclosure controls and procedures were **not effective** as of December 31, 2022[139](index=139&type=chunk) - The ineffectiveness is due to an unremediated **material weakness** related to management's controls over the review of forecasts used for contingent consideration, intangible assets, and goodwill impairment testing[140](index=140&type=chunk) - A plan to remediate the material weakness is in process, which includes enhancing management's review controls over the forecasting process[141](index=141&type=chunk) [PART II — OTHER INFORMATION](index=48&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) The company outlines significant risks including unpredictable operating results, heavy reliance on Nokia, adverse macroeconomic impacts, challenges in new APU product development, dependence on single-source suppliers, and a material weakness in internal financial controls - Heavy reliance on its largest OEM customer, **Nokia**, which accounted for **16%** of net revenues in the nine months ended December 31, 2022[161](index=161&type=chunk) - The business is adversely affected by the military conflict in Ukraine, rising energy prices, worldwide inflation, and the ongoing COVID-19 pandemic[164](index=164&type=chunk) - An identified **material weakness** in internal control over financial reporting could impair the ability to produce timely and accurate financial statements[169](index=169&type=chunk) - Future success is substantially dependent on the successful introduction of new **in-place associative computing products**, which entails significant technological and market risks[176](index=176&type=chunk) - The company is dependent on **single-source suppliers** for key components, most significantly **TSMC** for wafers[177](index=177&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=85&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter ended December 31, 2022, the company did not repurchase any shares of its common stock under its authorized stock repurchase program - The company did not repurchase any of its shares under the authorized repurchase program during the quarter ended December 31, 2022[245](index=245&type=chunk) [Exhibits](index=85&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL financial data files - The report includes required CEO and CFO certifications pursuant to the Sarbanes-Oxley Act (Exhibits 31.1, 31.2, 32.1)[246](index=246&type=chunk) [Signatures](index=86&type=section&id=Signatures) The report is duly signed and authorized by the President, CEO, and Chairman, Lee-Lean Shu, and CFO Douglas M. Schirle, on February 14, 2023 - The Form 10-Q was signed on February 14, 2023, by the company's CEO and CFO[249](index=249&type=chunk)

GSI Technology, Inc. (NASDAQ:GSIT) Q3 2023 Earnings Conference Call January 26, 2023 4:30 PM ET Company Participants Lee-Lean Shu - Chairman, President and CEO Didier Lasserre - VP of Sales Douglas Schirle - CFO Conference Call Participants Operator Greetings, and welcome to GSI Technology Inc. Third Quarter Fiscal Year 2023 Results. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Mr. Lee-Lean Shu, Chairman, President and Chief Executive ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33387 GSI Technology, Inc. (Exact name of registrant as specified in its charter) Delaware 77-0398779 1213 Elko Drive ...

Financial Data and Key Metrics Changes - Revenue for Q2 2023 increased by nearly 15% year-over-year to $9.0 million, aligning with the midpoint of guidance [3] - Gross margin rose by 900 basis points year-over-year to 62.6%, attributed to a favorable product mix [4][23] - Net loss narrowed to $3.2 million, compared to a net loss of $4.6 million in Q2 2022 [22][24] - Cash balance as of September 30, 2022, was $38.9 million, down from $44 million in March 2022 [26][27] Business Line Data and Key Metrics Changes - Sales to Nokia were $1.2 million, representing 13.6% of net revenues, down from 23.8% a year ago [19] - Military defense sales accounted for 22.4% of shipments, a decrease from 27.4% year-over-year [19] - SigmaQuad sales increased to 58.1% of shipments, up from 52.4% in the same period last year [19] Market Data and Key Metrics Changes - The company is focusing on two near-term markets: Synthetic Aperture Radar (SAR) and fast vector/neural search optimized for big data applications [5][10] - The SAR market is seen as attractive, with existing relationships with prospective targets [9] - The fast vector search product is currently being explored by about 12 users, primarily data scientists [10] Company Strategy and Development Direction - The company is prioritizing the development of SAR image processing acceleration systems and fast vector search products [5][10] - A successful proof of concept (POC) for SAR with Elta, a subsidiary of Israeli Aerospace Industries, has been completed, leading to potential future opportunities [6][18] - The company is also working on a compiler stack for APU applications, with a beta release expected by the end of the year [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in fulfilling existing orders and meeting demand for SRAM customers [20] - The company anticipates net revenues in the range of $6.3 million to $7.3 million for the upcoming third quarter, with a gross margin of approximately 53% to 55% [27] - Management acknowledged the challenges of transitioning from design to revenue generation for new products, emphasizing the need for time to establish market presence [60] Other Important Information - The company has no debt and reported stockholders' equity of $58.7 million as of September 30, 2022 [27] - Total operating expenses for Q2 2023 were $8.8 million, slightly up from $8.7 million in the prior year [23] Q&A Session Summary Question: Concerns about high R&D spending - Management is reviewing R&D costs and will provide updates in the next quarter [31][33] Question: Breakeven timeline - Management estimates breakeven could occur in a couple of years, depending on Rad-Hard and APU revenues [34] Question: Elta deal and revenue timeline - Initial revenue from Elta is expected in the first half of 2023, with ongoing outreach to other SAR clients [38][41] Question: SAR market potential - Management is optimistic about addressing a significant portion of the SAR market but will have more data in the next call [44] Question: Gemini-II performance improvements - Gemini-II is expected to drastically improve performance and reduce costs compared to Gemini-I [45] Question: Cash balance and share dilution - Management does not anticipate issuing more shares at this time [78]