Financial Position - The company reported cash and cash equivalents of 21.6millionasofDecember31,2023,withnodebt[101].−CashandcashequivalentsasofDecember31,2023were21.6 million, down from 30.6millionasofMarch31,2023[126].−Thecompanybelievesexistingcashbalancesandexpectedcashflowwillbesufficientforworkingcapitalandcapitalexpendituresforatleastthenext12months[131].−Thecompanysold133,000sharesatanaveragepriceof4.20, resulting in proceeds of 542,000afterofferingcostsof389,000 during Q3 2023[133]. - As of December 31, 2023, the company had 4.2millioninpurchaseobligations,with3.3 million due within the next twelve months[133]. - The contingent consideration liability related to the acquisition of MikaMonu was accrued at 495,000,payablethroughDecember31,2025,contingentonrevenuetargets[133].−Thecompanyreportedcashandcashequivalentsof21.6 million as of December 31, 2023, primarily invested in money market funds[138]. Revenue and Sales Performance - Sales to networking and telecommunications OEMs accounted for 32% to 53% of net revenues over the last three fiscal years, with Nokia being the largest customer, representing approximately 23% of net revenues in the nine months ended December 31, 2023[107]. - Net revenues decreased by 17.5% from 6.4millioninQ42022to5.3 million in Q4 2023, and by 31.8% from 24.3millionintheninemonthsendedDecember31,2022to16.6 million in the same period in 2023[116]. Expenses and Costs - Research and development expenses included a charge of 2.4millionforapre−productionmasksetfortheAPU−2duringthequarterendedDecember31,2023[110].−Researchanddevelopmentexpensesincreasedby26.25.5 million in Q4 2022 to 7.0millioninQ42023,primarilyduetoincreasedpre−productionmaskcostsfortheAPU−2product[120].−Selling,generalandadministrativeexpensesdecreasedby9.53.0 million in Q4 2022 to 2.7millioninQ42023,whileincreasingby1.88.1 million in the nine months ended December 31, 2022 to 8.2millioninthesameperiodin2023[121].−Thecompanyhasbeenimpactedbysupplychainconstraintsandinflation,leadingtoincreasedcostsinwaferfabricationandassemblyoperations[108].ProfitabilityandLoss−Grossprofitdecreasedby19.73.7 million in Q4 2022 to 3.0millioninQ42023,andby37.514.7 million in the nine months ended December 31, 2022 to 9.2millioninthesameperiodin2023[118].−Netlosswas6.6 million in Q4 2023 compared to 4.8millioninQ42022,and15.8 million in the nine months ended December 31, 2023 compared to $12.0 million in the same period in 2022[125]. Future Outlook - The company expects continued fluctuations in revenues due to changes in customer buying patterns and economic conditions, including inflation and energy price fluctuations[98]. - The company anticipates that overall average selling prices will increase in the coming quarters due to a shift towards higher price, higher density products[104]. - The company expects that selling, general, and administrative expenses will increase in absolute dollars as it expands its sales force[111]. Internal Controls and Compliance - There was a material weakness in internal control over financial reporting identified as of March 31, 2023, which has not been remediated as of December 31, 2023[140]. - Management has implemented a detailed plan to remediate the identified material weakness, focusing on enhancing review controls over forecasts used for contingent consideration calculations[142]. - The company does not have any off-balance sheet arrangements or relationships with unconsolidated entities as of December 31, 2023[135]. Risk Factors - Foreign currency exchange risks are minimal, as revenues and expenses are primarily denominated in U.S. dollars[137]. - The company does not currently enter into forward exchange contracts or derivative financial instruments for hedging or speculative purposes[137]. - A hypothetical 100 basis point change in interest rates is not expected to materially affect the fair value of the company's interest-sensitive financial instruments[138].
