错误 --06-30 2025 Q1 0001114925 0001114925 2024-07-01 2024-09-30 0001114925 2024-11-01 0001114925 2024-09-30 0001114925 2024-06-30 0001114925 2023-07-01 2023-09-30 0001114925 US-GAAP:普通股成员 2024-06-30 0001114925 美元指数: 应付股本会员 2024-06-30 0001114925 us-gaap:留存收益成员 2024-06-30 0001114925 us-gaap:其他综合收益的累计成员 2024-06-30 0001114925 US-GAAP:普通股成员 2023-06-30 0001114925 美元指数: 应付股本会员 2023-06-30 0001114925 us-gaap:留存收益成员 2023-06-30 0001114925 us-gaap:其他综合收益的累计成员 2023-06-30 0001114925 2023-06-30 0001114925 US-GAAP:普通股成员 2024-07-01 2024-09-30 0001114925 美元指数: 应付股本会员 2024-07-01 2024-09-30 0001114925 us-gaap:留存收益成员 2024-07-01 2024-09-30 0001114925 us-gaap:其他综合收益的累计成员 2024-07-01 2024-09-30 0001114925 US-GAAP:普通股成员 2023-07-01 2023-09-30 0001114925 美元指数: 应付股本会员 2023-07-01 2023-09-30 0001114925 us-gaap:留存收益成员 2023-07-01 2023-09-30 0001114925 us-gaap:其他综合收益的累计成员 2023-07-01 2023-09-30 0001114925 US-GAAP:普通股成员 2024-09-30 0001114925 美元指数: 应付股本会员 2024-09-30 0001114925 us-gaap:留存收益成员 2024-09-30 0001114925 us-gaap:其他综合收益的累计成员 2024-09-30 0001114925 US-GAAP:普通股成员 2023-09-30 0001114925 美元指数: 应付股本会员 2023-09-30 0001114925 us-gaap:留存收益成员 2023-09-30 0001114925 us-gaap:其他综合收益的累计成员 2023-09-30 0001114925 2023-09-30 0001114925 LTRX: 预付销售佣金会员 2024-09-30 0001114925 LTRX: 嵌入式IoT解决方案会员 2024-07-01 2024-09-30 0001114925 LTRX: 嵌入式IoT解决方案会员 2023-07-01 2023-09-30 0001114925 LTRX: IoT系统解决方案会员 2024-07-01 2024-09-30 0001114925 LTRX: IoT系统解决方案会员 2023-07-01 2023-09-30 0001114925 LTRX: 软件与服务会员 2024-07-01 2024-09-30 0001114925 LTRX: 软件与服务会员 2023-07-01 2023-09-30 0001114925 SRT:美洲成员 2024-07-01 2024-09-30 0001114925 SRT:美洲成员 2023-07-01 2023-09-30 0001114925 us-gaap:EMEA成员 2024-07-01 2024-09-30 0001114925 us-gaap:EMEA成员 2023-07-01 2023-09-30 0001114925 LTRX:亚太日本会员 2024-07-01 2024-09-30 0001114925 LTRX:亚太日本会员 2023-07-01 2023-09-30 0001114925 产品成员 美国通用会计准则:净销售收入会员 us-gaap:客户集中度风险成员 2024-07-01 2024-09-30 0001114925 产品成员 美国通用会计准则:净销售收入会员 us-gaap:客户集中度风险成员 2023-07-01 2023-09-30 0001114925 us-gaap:服务成员 美国通用会计准则:净销售收入会员 us-gaap:客户集中度风险成员 2024-07-01 2024-09-30 0001114925 us-gaap:服务成员 美国通用会计准则:净销售收入会员 us-gaap:客户集中度风险成员 2023-07-01 2023-09-30 0001114925 us-gaap:已开发技术权益成员 2024-09-30 0001114925 us-gaap:已开发技术权益成员 2024-06-30 0001114925 us-gaap:SeriesCPreferredStockMember 2024-09-30 0001114925 us-gaap:SeriesCPreferredStockMember 2024-06-30 0001114925 2022-06-30 0001114925 2022-07-01 2023-06-30 0001114925 LTRX: SVB高级信贷设施成员 2022-09-30 0001114925 LTRX: SVB高级信贷设施成员 2022-09-01 2022-09-30 0001114925 LTRX: 硅谷银行高级信贷业务成员 2024-09-01 2024-09-30 0001114925 LTRX: 信贷业务成员 2024-07-01 2024-09-30 0001114925 LTRX: 硅谷银行高级信贷业务成员 2024-09-30 0001114925 美国通用会计原则限制性股票单位累计成员 2024-06-30 0001114925 美国通用会计原则限制性股票单位累计成员 2024-07-01 2024-09-30 0001114925 美国通用会计原则限制性股票单位累计成员 2024-09-30 0001114925 LTRX: 绩效股单位成员 2024-06-30 0001114925 LTRX: 绩效股单位成员 2024-07-01 2024-09-30 0001114925 LTRX:绩效股单位会员 2024-09-30 0001114925 us-gaap:期权成员 2024-06-30 0001114925 us-gaap:期权成员 2024-07-01 2024-09-30 0001114925 us-gaap:期权成员 2024-09-30 0001114925 LTRX:员工股票购买计划会员 2024-06-30 0001114925 LTRX:员工股票购买计划会员 2024-07-01 2024-09-30 0001114925 LTRX:员工股票购买计划会员 2024-09-30 0001114925 us-gaap:CostOfSalesMember 2024-07-01 2024-09-30 0001114925 us-gaap:CostOfSalesMember 2023-07-01 2023-09-30 0001114925 美国通用会计准则:销售、总务及管理费用成员 2024-07-01 2024-09-30 0001114925 美国通用会计准则:销售、总务及管理费用成员 2023-07-01 2023-09-30 0001114925 us-gaap:研发支出成员 2024-07-01 2024-09-30 0001114925 us-gaap:研发支出成员 2023-07-01 2023-09-30 0001114925 LTRX:绩效股票单位PSU会员 2024-09-30 0001114925 LTRX:绩效股票单位PSU会员 2024-07-01 2024-09-30 0001114925 美国通用会计准则:员工股票会员 2024-09-30 0001114925 美国通用会计准则:员工股票会员 2024-07-01 2024-09-30 iso4217:USD xbrli:股份 iso4217:USD xbrli:股份 xbrli:纯形

目录

美国

证券交易委员会

华盛顿特区20549

 

表格 10-Q

 

根据1934年证券交易法第13或15(d)条规定的季度报告。

 

截至2024年6月30日季度结束 2024年9月30日

 

 

根据1934年证券交易所法案第13条或15(d)条,提交的转让报告

 

过渡期从_________到_________。

 

委员会文件号码: 1-16027

 

 

兰特诺控股有限公司。

(依凭章程所载的完整登记名称)

 

特拉华州 33-0362767
(成立地或组织其他管辖区) (联邦税号)

 

48 Discovery, 250套房, 艾尔文, 加利福尼亚州

(总部办公地址)

 

92618

(邮政编码)

 

(949) 453-3990

(注册人的电话号码,包括区号)

 

根据《证券法》第12(b)条注册的证券:

 

每种类别的名称 交易标的(s) 每个注册交易所的名称
普通股,每股面值0.0001美元 LTRX 辉瑞公司面临数起分开的诉讼,这些诉讼仍在进行中,需等待第三项索赔条款的裁决。2023年9月,我们与辉瑞公司同意合并2022和2023年的诉讼,并将审判日期从2024年11月推迟至2025年上半年,具体时间将由法院确定。 纳斯达克 股票市场有限公司

 

请凭验证标记生效,以指示申报人(1)是否在1934年的“证券交易法”第13或15(d)条所规定的12个月内全部提交了报告(或者申报人在较短的期间内必须提交这些报告),以及(2)申报人在过去90天内是否需承担这种申报要求。 ☒ 否 ☐

 

请请勾选表示:在过去12个月内(或者该登记人所需提交该档的较短期间内),该登记人递交了根据规则405(S-T部分232.405章节)所要求提交的每个交互式数据档案。 否 ☒

 

请用勾选方式指明申报者为大型加速度报告者、加速度报告者、非加速度报告者、较小型报告公司或新兴成⻑公司。请见交易所法规第120亿2条中对「大型加速度报告者」、「加速度报告者」、「较⼩型报告公司」和「新兴成⻑公司」的定义。

 

大型加速提交人 ☐   加速归档人
非加速申报者 ☐   较小的报告公司
新兴成长公司    

 

如果是新兴增长公司,请在此处打勾,表示注册人选择不使用扩展过渡期来符合根据证券交易法第13(a)条的任何新的或修订的财务会计标准。 ☐

 

标示勾选框以指示登记人是否为外壳公司(根据交易所法第120亿2条的定义)。 是 ☐ 否

 

截至2024年11月1日, 38,475,343 股。

 

   

 

 

兰特诺控股有限公司。

 

表格10-Q

截至季度结束

2024年9月30日

 

指数

 

    页面
     
  关于前瞻性声明的注意事项 3
     
第一部分。 财务信息 4
     
项目1。 基本报表 4
     
  2024年9月30日和2024年6月30日未经查核的简明综合账目 4
     
  2024年9月30日至2023年期间结束的未经查核的简明综合业务报表 5
     
  截至2024年9月30日和2023年的未经查核的简明合并股东权益报表 6
     
  截至2024年9月30日和2023年的未经查核的简明合并现金流量表 7
     
  基本报表未经审核简明合并财务报表注脚 8
     
项目2。 管理层对财务状况和业绩的讨论与分析 21
     
项目3。 有关市场风险的定量和定性披露 28
     
项目 4。 内部控制及程序 28
     
第二部分。 其他信息 30
     
项目 1。 法律诉讼 30
     
项目1A。 风险因素 30
     
项目2。 股票权益的未注册销售和资金用途 46
     
项目3。 优先证券违约 46
     
项目 4。 矿业安全披露 46
     
项目5。 其他信息 46
     
第6项。 展品 46

 

 

 

 2 

 

 

关于前瞻性声明的注意事项

 

本季度截至2024年9月30日的第10-Q表格(以下简称“报告”)中包含根据联邦证券法的前瞻性陈述,这些陈述面临著重大风险和不确定性。这些前瞻性陈述旨在符合1995年私人证券诉讼改革法案所建立的免责条款。本报告中包含的所有除历史事实陈述外(或被引用至本报告中的陈述),均属前瞻性陈述。在整个本报告中,我们试图通过使用“可能”,“相信”,“将”,“可能”,“项目”,“预期”,“估计”,“应”,“继续”,“潜在”,“计划”,“预测”,“目标”,“寻找”,“打算”,这些词或类似词或表达方式,或否定词来识别前瞻性陈述。此外,涉及未来事项,例如我们预期的收益,收入,支出和财务状况,我们对于新产品开发的期望以及其他关于非历史事项的陈述均属前瞻性陈述。

 

我们将前瞻性声明基于管理层的当前情况 有关影响我们业务和行业的趋势以及其他未来事件的期望和预测。虽然我们不做出前瞻性 除非我们认为我们有合理的基础,否则我们不能保证其准确性。前瞻性声明是 承受可能导致我们未来业务、财务状况、营运结果或绩效的重大风险和不确定性 与我们的历史结果或本报告中所载的任何前瞻性声明中表明或暗示的结果有重大差异。 可能对我们的营运和未来前景产生重大不利影响,或可能导致实际结果不同的因素 根据我们的期望,实质上包括但不限于下文所述的期望风险因素」在部分第 1A 项中 本报告第 II 项,因为该等因素可能会因后续向证券公开申报,不时更新、修改或取代 和交易委员会。此外,由于我们目前的额外风险和不确定性,实际结果可能会有所不同 不知道或我们目前不视为我们业务的重要性。

 

您应该完整阅读本报告,连同我们作为本报告附件提交的文件,并了解我们未来的结果可能与目前的预期有重大差异,不应过度依赖本报告中包含的前瞻性声明。我们所作的前瞻性声明仅于其制作日期发表。我们明确声明,我们无意或无义务于此后更新任何前瞻性声明,以使该等声明符合实际结果或我们意见或期望的变化,除非适用法律或纳斯达克资本市场的规定要求。如果我们更新或更正任何前瞻性声明,投资者不应断定我们将进行进一步的更新或更正。

 

我们将所有前瞻性声明 都列入这些警语中。

 

 

 

 3 

 

 

第一部分. 财务资讯

 

项目 1。 基本报表

 

兰特诺控股有限公司。

未经核数的简明合并资产负债表

(以千为单位)

 

           
   九月三十日,   6月30日, 
   2024   2024 
资产          
流动资产:          
现金及现金等价物  $26,395   $26,237 
应收帐款净额   30,801    31,279 
存货净值   29,533    27,698 
代工厂商应收帐款   2,722    1,401 
预付费用及其他流动资产   3,169    2,335 
全部流动资产   92,620    88,950 
物业及设备,扣除折旧后净值   3,642    4,016 
商誉   27,824    27,824 
无形资产,扣除累计摊销   4,000    5,251 
租赁使用权资产   9,165    9,567 
其他资产   607    600 
资产总额  $137,858   $136,208 
           
负债及股东权益          
流动负债:          
应付账款  $17,149   $10,347 
应计的薪资及相关费用   3,440    5,836 
长期负债的当期部分,净额   3,057    3,002 
其他流动负债   11,859    10,971 
流动负债合计   35,505    30,156 
长期负债净额   12,409    13,219 
其他非流动负债   11,014    11,478 
总负债   58,928    54,853 
           
承诺事项和或附带条件(注8)   -      
           
股东权益:          
普通股票   4    4 
资本公积额额外增资   304,078    304,001 
累积亏损   (225,523)   (223,021)
其他综合收益累计额   371    371 
股东权益总额   78,930    81,355 
负债和股东权益总额  $137,858   $136,208 

 

详见附注未经审核的简明合并财务报表。

 

 

 

 4 

 

 

兰特诺控股有限公司。

未经查证的简化综合损益表

(以千为单位,除每股数据外)

           
   三个月结束
九月三十日
 
   2024   2023 
净收入  $34,423   $33,031 
收入成本   19,948    18,934 
毛利   14,475    14,097 
营运费用:          
销售、一般及行政   9,496    9,170 
研究与开发   4,956    5,106 
重组、解散费及相关费用   900    20 
逾期疲劳考虑的公平价值重新评估       (9)
无形资产摊销   1,251    1,384 
营运开支总额   16,603    15,671 
营运损失   (2,128)   (1,574)
利息费用净额   (119)   (338)
其他收入(费用),净额   (37)   19 
所得税前损失   (2,284)   (1,893)
所得税的供应(福利)   218    (7)
净亏损  $(2,502)  $(1,886)
           
每股净亏损-基本和稀释  $(0.07)  $(0.05)
           
平均权平均普通股-基本股及稀释   38,024    36,982 

 

详见附注未经审核的简明合并财务报表。

 

 

 

 5 

 

 

兰特诺控股有限公司。

未经审核之简明合并股东权益财务报表

(以千为单位)

 

                               
   三 截至二零二四年九月三十日止月份 
                   累积     
           额外       其他   总计 
   常见 股票   付款   累积   综合   股东 
   股票   金额   资本   赤字   收入   股票 
二零二四年六月三十日止余额   37,872   $4   $304,001   $(223,021)  $371   $81,355 
根据股票奖励发行的股份,净值   602        19            19 
代雇员支付限制股份的预扣税           (1,542)           (1,542)
基于股份的赔偿           1,600            1,600 
净亏损               (2,502)       (2,502)
二零二四年九月三十日止余额   38,474   $4   $304,078   $(225,523)  $371   $78,930 

 

 

   截至2023年9月30日止三个月 
                   累计     
           额外的       其他   总计 
   普通 股票   资本剩余   累计   综合   股东权益 
   股份   金额   资本   赤字累计   收入   股权 
2023年6月30日结余   36,875   $4   $295,686   $(218,505)  $371   $77,556 
按照股票奖励发行的股份净数   385        93            93 
代表员工支付的限制性股份税款扣缴           (514)           (514)
基于股份的报酬           1,742            1,742 
净损失               (1,886)       (1,886)
截至2023年9月30日的结余   37,260   $4   $297,007   $(220,391)  $371   $76,991 

 

详见附注未经审核的简明合并财务报表。

 

 

 

 6 

 

 

兰特罗尼克斯股份有限公司

未经查核的现金流量简明综合财务报表

(以千为单位)

 

           
  

结束于三个月的期间

九月三十日,

 
   2024   2023 
营运活动          
净损失  $(2,502)  $(1,886)
调整项目以协调净损失与经营活动提供的现金(使用现金):          
基于股份的报酬   1,600    1,742 
折旧与摊提   543    528 
营业无形资产摊销   1,251    1,384 
取得存货里制造业利润摊销       317 
推迟债券发行成本摊销   24    27 
完成后挂帐款项的公平价值重估       (9)
营运资产及负债变动,扣除取得的资产及负债:          
应收帐款   478    (2,423)
存货   (1,835)   3,623 
代工厂商的应收款项   (1,321)   2,389 
预付费用及其他流动资产   (834)   (233)
租赁使用权资产   481    481 
其他资产   (7)   11 
应付账款   6,790    (3,591)
应计的薪资及相关费用   (2,396)   108 
其他负债   391    5,030 
经营活动产生的净现金流量   2,663    7,498 
投资活动          
购买不动产和设备   (157)   (486)
投资活动中使用的净现金   (157)   (486)
融资活动          
普通股发行净收益   19    93 
代表员工支付的限制性股份税款扣缴   (1,542)   (514)
支付按期贷款   (779)   (518)
支付租赁负债   (46)   (46)
筹集资金的净现金流量   (2,348)   (985)
现金及现金等价物增加   158    6,027 
期初现金及现金等价物余额   26,237    13,452 
期末现金及现金等价物  $26,395   $19,479 

 

详见附注未经审核的简明合并财务报表。

 

 

 

 7 

 

 

兰特诺控股有限公司。

未经审计的简明合并财务报表附注

2024年9月30日

 

 

1. 公司和重大会计政策

 

权益代理

 

创力, Inc.,以下简称本公司,创力,我们,我们,是全球货币在计算和连接解决方案方面的领导者,目标是高增长行业,如智慧城市,汽车和企业市场。我们的产品和服务使公司能够利用不断扩大的物联网市场,提供可定制的解决方案,满足Iot堆栈的每一层。

   

报告基础

 

创力的附注未经审计的总括财务报表已按照美国公认会计原则("U.S. GAAP")编制,用于中期财务信息,并按照第10-Q表格的指示以及证券交易委员会第8条规定编制("SEC")规则S-X。因此,它们应与截至2024年6月30日的财政年度的审计合并财务报表及相关附注一起阅读,这些合并财务报表包含在我们于2024年6月30日结束的财政年度的10-K表格年度报告中,该报告于2024年9月9日向SEC提交。未经审计的总括财务报表包括了在管理层认为有必要公平呈现创力在2024年9月30日的合并财务状况、截至2024年9月30日结束的我们营运合并结果和截至2024年9月30日结束的我们合并现金流量的所有常规回算和调整。所有企业内部账户和交易已被消除。

 

重要之会计政策

 

估算的使用

 

按照美国通用会计原则准则编制简明聚合资产负债表需要管理层对于影响截至资料财务报表以及截至简明聚合资产负债表日期对于资产负债和有可能发生的资产负债之揭露数量以及在报导期间之收入和费用数量需要进行的估计和假设。在过渡日期进行的会计计量相对年终更多地依赖于估计。

 

截至2024年9月30日三个月的营运结果并不能必然反映出全年或任何未来中期期间的预期结果。

 

最近会计宣告

 

分摊开支披露

 

2024年11月,财务会计准则委员会("FASB")发布最终指引,要求公开企业按年度和中期披露有关特定损益表费用项目的细分信息。所需信息包括库存购买、员工薪酬、折旧、无形资产摊销和耗竭。这项标准将对创力从2028年6月30日结束的财政年度开始生效。我们尚未确定采纳此指引对我们的财务报表的影响。

 

所得税揭示

 

2023年12月,财务会计准则委员会发布了有关改善所得税披露的最终标准。新标准要求对公司有效税率调和以及所支付所得税的详细信息进行细分。该标准将对创力自2026年6月30日结束的财政年度的年度财务报表生效。我们尚未确定采纳此指引对我们的基本报表的影响。

 

 

 

 8 

 

 

分段披露

 

2023年11月,FASb发布了新的会计标准更新(“ASU”),要求就上市公司的可报告部门进行增量披露。新指南主要是为了向基本报表用户提供有关公司可报告部门的更加详细的费用信息。该指南不改变部门的定义,确定部门的方法,或将营运部门合并为可报告部门的标准。该指南将于Lantronix的2025年6月30日结束的财政年度的年度基本报表中以溯及既往的方式生效。我们正在评估这项指南,目前不预期该指南对我们的基本报表产生重大影响。

  

2. 营业收入

 

营业收入是在将承诺的产品或服务的控制权转移给客户时予以认列的,其金额应反映我们预期在交换这些产品或服务的对价上所能获得的考虑。 在确定予以认列营业收入的金额和时间方面,我们采用以下五步骤:(i)确定与客户的合同,(ii)确定合同中的履行义务,(iii)确定交易价格,(iv)将交易价格分配给合同中的履行义务,以及(v)在履行义务得到满足时予以认列营业收入。偶尔,我们会进入可以包含各种产品和服务组合的合同,这些产品和服务通常能够被视为独立的履行义务并按独立履行义务进行核算。

 

营业收入是不包括以下两项的:(一)从客户那里收取的税款,后来被拨交给政府机构;(二)从客户那里收取的运输和处理成本。

 

产品

 

我们大部分的产品营业收入是当产品交付给承运人时确认为单一明显履行义务,这代表我们的客户取得所承诺产品的控制权。我们的一小部分产品营业收入是在客户收到所承诺产品的交付时确认。

 

我们产品中的大部分是根据含有(i)有限退货权限和(ii)价格调整规定的协议出售到分销商手中,在计算营业收入数额时,这两者都被视为变量考量。我们的退货及价格调整的估计主要基于历史经验;不过,我们也考虑合约津贴、批准的价格调整和其他已知或预期的退货及价格调整在特定期间会发生。这样的估计通常在出货给客户时进行,并在每个报告期结束时更新,以反映新增资讯,并且只有在相当大的收入反转很不可能发生时才会发生。我们对已计提的变量考量的估计包括在附注的未经审计的简明综合资产负债表的其他流动负债中。

 

Services

 

我们的延长保修、技术支持和维护服务的收入通常在适用的服务期间内均等认列。虽然目前不显著,但我们以软体即服务(Software-as-a-Service,SaaS)解决方案的销售收入也按照适用的服务期间进行均等认列。

 

We prepay sales commissions related to certain of these contracts, which are incremental costs of obtaining the contract. We capitalize these costs and expense them ratably on a straight-line basis over the life of the contract. At September 30, 2024, prepaid sales commissions included in prepaid expenses and other current assets totaled $254,000 and those included in other assets totaled $186,000.

 

 

 

 9 

 

 

Engineering Services

 

We derive a portion of our revenues from engineering and related consulting service contracts with customers. Revenues from professional engineering services are generally recognized as services are performed. These contracts generally include performance obligations in which control is transferred over time because the customer either simultaneously receives and consumes the benefits provided or our performance on the contract creates or enhances an asset that the customer controls. These contracts typically provide services on the following basis:

 

  · Time & Materials (“T&M”) – services consist of revenues from software modification, consulting implementation, training and integration services. These services are set forth separately in the contractual arrangements such that the total price of the customer arrangement is expected to vary depending on the actual time and materials incurred based on the customer’s needs.
     
  · Fixed Price – arrangements to render specific consulting and software modification services which tend to be more complex.

 

Performance obligations for T&M contracts qualify for the “Right to Invoice” practical expedient within the revenue guidance. Under this practical expedient, we may recognize revenue, over time, in the amount to which we have a right to invoice. In addition, we are not required to estimate variable consideration upon inception of the contract and reassess the estimate each reporting period. We have determined that this method best represents the transfer of services as, upon billing, we have a right to consideration from a customer in an amount that directly corresponds with the value to the customer of our performance completed to date.

 

We recognize revenue on fixed price contracts, over time, using an input method based on the proportion of our actual costs incurred (generally labor hours expended) to the total costs expected to complete the contract performance obligation. We have determined that this method best represents the transfer of services as the proportion closely depicts the efforts or inputs completed towards the satisfaction of a fixed price contract performance obligation.

 

Multiple Performance Obligations

 

From time to time, we may enter into contracts with customers that include promises to transfer multiple deliverables that may include sales of products, professional engineering services and other product qualification or certification services. Determining whether the deliverables in such arrangements are considered distinct performance obligations that should be accounted for separately versus together often requires judgment. We consider performance obligations to be distinct when the customer can benefit from the promised good or service on its own or by combining it with other resources readily available and when the promised good or service is separately identifiable from other promised goods or services in the contract. In such arrangements, we allocate revenue on a relative standalone selling price basis by maximizing the use of observable inputs to determine the standalone selling price for each performance obligation.

 

Net Revenue by Product Line and Geographic Region

 

We organize our products and solutions into three product lines: Embedded IoT Solutions, IoT System Solutions, and Software & Services. Our Embedded IoT products are normally embedded into new designs. These products include application processing that delivers compute to meet customer needs for data transformation, computer vision, machine learning, augmented / virtual reality, audio / video aggregation and distribution, and custom applications at the edge. Our IoT System products include wired and wireless connections that enhance the value and utility of modern electronic systems and equipment by providing secure network connectivity, power for IoT end devices through Power over Ethernet (“PoE”), application hosting, protocol conversion, media conversion, secure access for distributed IoT deployments and many other functions. Our Software & Services products can be classified as either (i) our SaaS platform, which enables customers to easily deploy, monitor, manage, and automate across their global deployments, all from a single platform login, virtually connected as though directly on each device, (ii) engineering services, which is a flexible business model that allows customers to select from turnkey product development or team augmentation for accelerating complex areas of product development or (iii) extended warranty, support and maintenance.

 

 

 

 10 

 

 

We conduct our business globally and manage our sales teams by three geographic regions: the Americas; Europe, Middle East, and Africa (“EMEA”); and Asia Pacific Japan (“APJ”).

 

The following tables present our net revenue by product line and by geographic region. We present net revenues by geographic region generally based on the “ship-to” location of our customers for product sales and the “bill-to” location for services.

          
   截至九月三十日的三个月 
   2024   2023 
   (以千计) 
嵌入式物联网-5G解决方案  $13,387   $11,373 
物联网-5G系统解决方案   18,759    19,036 
软件与服务   2,277    2,622 
   $34,423   $33,031 

 

          
   截至九月三十日的三个月 
   2024   2023 
   (以千计) 
美洲  $17,420   $22,933 
欧洲、中东、非洲   10,484    6,591 
亚太地区 日本   6,519    3,507 
   $34,423   $33,031 

 

下表展示了产品营业收入和服务营业收入占我们总净营业收入的百分比:

          
   截至九月三十日的三个月 
   2024   2023 
     
产品收入   93%    93% 
服务收入   7%    7% 

 

服务收入主要由专业服务、软件 许可订阅和延长保修组成。

 

合同余额

 

在某些情况下,营业收入确认的时间可能与我们向客户开具发票的时间不同。当营业收入在开具发票之前确认时,我们记录一个合同资产应收款,而在开具发票之后确认时,则记录合同或递延营业收入负债。关于产品发货,我们预计在一年内履行合同义务,因此我们选择不单独披露这些剩余履约义务的金额或确认时机。有关包含服务和多项履约义务的合同的合同余额,请参阅下面的递延营业收入讨论。

 

 

 

 11 

 

 

递延收入

 

递延营业收入主要由与我们延长保修、压力位和维护服务以及某些软件服务相关的未赚取的营业收入组成。这些服务通常在合同期开始时开具发票,营业收入在服务期间按比例确认。当前和非当前递延营业收入余额代表报告期末分配给尚未满足的财报义务的营业收入,分别包含在相关未经审计的简明合并资产负债表中的其他流动负债和其他非流动负债中。

 

下表展示了截至2024年9月30日三个月内我们的递延营业收入余额的变动 (单位:千元):

     
余额,2024年6月30日  $5,753 
新的履约义务   878 
满足履约义务而确认的营业收入   (1,188)
余额,2024年9月30日   5,443 
减去:递延营业收入的非流动部分   (2,564)
流动部分,2024年9月30日  $2,879 

 

我们目前预计将在接下来的2到5年内确认几乎所有的延期营业收入的非流动部分。

  

3. 补充财务信息

 

存货

          
   九月三十日,   6月30日, 
   2024   2024 
   (以千为单位) 
成品  $16,228   $14,167 
原材料   13,305    13,531 
存货  $29,533   $27,698 

 

 

 

 12 

 

 

其他负债

 

下表列出了我们其他负债的详细资料:

          
   九月三十日   六月三十日 
   2024   2024 
   (以千计) 
目前        
累计变动代价  $2,279   $1,796 
客户存款和退款   264    436 
累计原材料采购   227    126 
延期收入   2,879    3,017 
租赁责任   1,689    1,767 
应缴税   667    772 
保修保留   848    840 
其他累计营运开支   3,006    2,217 
其他流动负债总额  $11,859   $10,971 
           
非流动          
租赁责任  $8,202   $8,563 
递延税务负债   248    179 
延期收入   2,564    2,736 
其他非流动负债总额  $11,014   $11,478 

 

每股净损失的计算

 

基本和稀释每股净亏损是通过将净亏损除以适用期间内普通股权重平均数计算得出。

 

以下表格呈现每股净损益的计算:

        
   三个月结束了
九月三十日,
 
   2024   2023 
   (以千为单位,除每股数据外) 
分子:        
净损失  $(2,502)  $(1,886)
分母:          
基本和稀释后的加权平均普通股份数量   38,024    36,982 
           
基本和稀释每股净亏损  $(0.07)  $(0.05)

 

 

 

 13 

 

 

以下表格显示排除在稀释每股净亏损计算中的普通股等价物,因为它们在报告期内对减少股份不具有稀释效应。这些被排除的普通股等价物在将来可能具有稀释效应。

          
   三个月结束了
九月三十日,
 
   2024   2023 
   (以千为单位) 
普通股票等值证券   621    667 

 

无形资产

 

下表显示无形资产的详细资料:

                              
   2024年9月30日   2024年6月30日 
   毛余额    累积摊提   净书价值   总摊销金额   累积摊提   净书价值 
   (以千为单位) 
开发出的科技  $6,331   $(5,587)  $744   $6,331   $(5,293)  $1,038 
客户关系   17,528    (14,272)   3,256    17,528    (13,315)   4,213 
   $23,859   $(19,859)  $4,000   $23,859   $(18,608)  $5,251 

 

我们目前没有任何具有无限使用寿命的无形资产。

 

截至2024年9月30日,未来估计摊销费用如下:

     
截至6月30日的年份    
(以千为单位)    
2025(余)  $2,433 
2026   1,177 
2027   326 
2028   64 
未来总摊销费用  $4,000 

 

重组、遣散及相关费用

 

截至2024年9月30日的三个月内,我们 incurred 了大约$ 的费用 与我们的销售、工程和运营团队的某些裁员相关。900,000 随着我们识别出与我们业务相关的其他成本节约和效率,我们可能在未来的时期内会 incur 额外的费用。

 

下表展示了我们记录的与重组、遣散和相关活动有关的负债细节:

     
   三个月结束 
   9月30日 
   2024 
   (以千计) 
期初余额  $253 
费用   900 
付款   (754)
期末余额  $399 

 

这些余额在附带的未经审计的简明合并资产负债表中记录为应计工资和相关费用。

  

 

 

 14 

 

 

补充现金流量信息

 

下表展示了未包含在随附的未经审计的简明合并现金流量表中的非现金投资交易:

          
   截至三个月
9月30日
 
   2024   2023 
   (以千计) 
应计的物业和设备在后期支付  $12   $339 

 

4. 保修准备金

 

我们为产品提供的标准保修期通常在 一到五年之间。某些产品享有有限终身保修,要求我们修复或更换有缺陷的产品, 或者根据我们的选择,按折旧价值提供部分购买价格的退款。我们在确认营业收入时,根据我们的历史保修经验,设立预计产品 保修成本的准备金,并针对任何已知或预期的产品 保修问题。

 

下表展示了我们的保修准备金的详细信息,该准备金 包含在未经审计的简明合并资产负债表中的其他流动负债中:

          
   三个月结束   截至年份 
   9月30日   6月30日, 
   2024   2024 
   (以千计) 
期初余额  $840   $788 
计入营业收入成本   130    376 
使用情况   (122)   (324)
期末余额  $848   $840 

 

5. 银行贷款协议

 

在2022年9月,我们与硅谷银行(「SVB」)签署了第三次修订 的修订和重述贷款及安防-半导体-半导体协议(「修订」), 该协议涉及我们现有的定期贷款和循环信贷设施(统称为「高级信贷设施」),并对 2021年8月2日签署的第三次修订和重述贷款及安防-半导体-半导体协议进行了修改,该协议经2021年10月21日的第一次修订和 2022年2月15日的第二次修订进行修改,修订方为创力与SVB(与修订一起,统称为「贷款协议」)。

 

修正案提供了额外的贷款,原始本金金额为$5,000,000 原定于2025年8月2日到期。 高级信贷设施的利息为期票安全隔夜融资利率(「SOFR」)或基本利率,选择权在创力,外加一个范围从3.10%至4.10%的边际,若为期SOFR,则范围为1.50%至2.50%,如果为基本利率,则依据我们的总杠杆,期SOFR的最低为1.50%,基本利率的最低为3.25%。修正案将最低流动性要求从$5,000,000减少到$4,000,000。 作为进入修正案的控件,我们被要求支付一笔不可退还的设施增加费,为$25,000高级信贷设施的担保是我们几乎所有的资产。

  

 

 

 15 

 

 

在2023年4月,我们与SVb签订了一份函件协议(「函件协议」),该协议在其他事项中修改了贷款协议,将之前要求持有85%公司现金余额在SVb的比例降低至50%,并对在函件协议签署日期之前未能遵守该条款的任何违约事件提供了豁免。

 

在2024年9月,我们签署了贷款协议的第四次修正案, 根据该修正案,我们的高级信贷设施到期日从2025年8月2日延长至 2026年8月2日.

 

以下表格总结了我们在高级信贷设施下的未偿债务:

          
   9月30日   6月30日, 
   2024   2024 
   (以千计) 
长期贷款的未偿借款  $15,563   $16,341 
减:未摊销的债务发行费用   (97)   (120)
债务的净账面金额   15,466    16,221 
减:流动部分   (3,057)   (3,002)
非流动部分  $12,409   $13,219 

 

截至2024年9月30日的三个月期间,我们确认了$380,000在附带的未经审计的简明合并运营报表中与高级信贷设施下的借款相关的利息费用和债务发行摊销。

 

财务契约

 

高级信贷设施要求创力遵守最低流动性测试、最高杠杆比率和最低固定费用覆盖比率。我们目前遵守所有财务契约。

 

流动性

 

高级信用设施要求我们保持最低流动性 为$4,000,000 在SVb进行测量,以每月末为准。

 

最高杠杆比率

 

高级信贷设施要求我们维持 最大杠杆比率,计算方式为融资债务与合并的过去12个月税息折旧及摊销前利润的比率,以及某些其他允许的排除项,即(i) 从2021年6月30日结束的每个日历季度到2022年9月30日,包括在内的2.50比1.00,(ii) 从2022年12月31日结束的每个日历季度到2023年9月30日,包括在内的2.25比1.00,以及(iii) 2023年12月31日结束的日历季度及其后每个日历季度的2.00比1.00。

 

 

 

 16 

 

 

最低固定收费覆盖率

 

高级信贷设施要求我们维持最低固定费用覆盖率,该比率计算为合并的过去12个月利息、税收、折旧和摊销前的盈利,减去资本支出和已支付税款,再与所有已资助债务在过去12个月的本金和利息支付相比较,比例为1.25比1.00,按每个日历季度末进行测量。

 

此外,高级信贷设施包含 通常的陈述和保证,积极和消极的契约,包括限制或限制创力及其子公司承担留置权、承担债务、处置资产、进行投资、进行某些限制性支付、合并或整合以及进入某些投机性对冲安排的契约。高级信贷设施包括多个违约事件,包括非支付违约、契约违约、对其他重大债务的交叉违约、破产和 insolvency(无力偿债)违约以及重大判决违约。如果发生任何违约事件(在某些情况下须遵守特定的宽限期),则在高级信贷设施下所有未偿付金额的本金、溢价(如有)、利息和任何其他货币义务可能立即到期支付。

 

6. 股东权益

  

限制性股票单位(「RSUs」)

 

下表总结了关于我们RSUs的活动情况:

          
       加权- 
       平均 
       授予日期 
   数量   公允价值 
   Shares   每股股票 
   (以千计)     
截至2024年6月30日尚未兑现的限制股票单位的余额   1,881   $4.89 
授予   464    3.63 
被注销数量   (136)   4.42 
归属数量   (270)   4.91 
截至2024年9月30日尚未兑现的限制股票单位的余额   1,939   $4.62 

 

财报股票单位(「PSUs」)

 

下表呈现了与我们的 PSU相关的活动摘要:

     
   股份数量 
   (以千计) 
截至2024年6月30日未结余的PSU余额   1,669 
授予   539 
被注销数量   (377)
归属数量   (669)
截至2024年9月30日未结余的PSU余额   1,162 

 

 

 

 17 

 

 

期权

 

下表总结了我们与期权相关的活动:

          
       加权- 
       平均 
   数量   行使价格 
   Shares   每股股票 
   (以千计)     
截至2024年6月30日尚未行使的期权余额   567   $4.13 
到期   (11)   2.16 
行使   (230)   3.36 
截至2024年9月30日尚未行使的期权余额   326   $4.75 

 

员工股票购买计划(「ESPP」)

 

以下表格展示了我们员工股票购买计划(ESPP)活动的总结:

     
   数量 
   Shares 
   (以千计) 
截至2024年6月30日可发行股票   181 
发行的股份    
截至2024年9月30日可发行股票   181 

 

股份基础报酬支出

 

下表展示了包含在我们附带的未经审计的简明合并营业报表中每个适用功能项目的基于股份的补偿费用的摘要:

        
   截至三个月
9月30日
 
   2024   2023 
   (以千计) 
成本收入  $64   $41 
销售、一般和行政   1,126    1,273 
研究与开发   410    428 
总的股票补偿费用  $1,600   $1,742 

 

 

 

 18 

 

 

下表展示了截至2024年9月30日我们未确认的股权奖励相关的股权补偿费用:

          
   剩余   剩余 
   未确认的   加权- 
   报酬   平均年限 
   费用   识别 
   (以千计)     
股票期权  $188    1.9 
RSU   7,560    2.2 
PSU   4,151    2.4 
ESPP下的股票购买权   35    0.1 
   $11,934      

 

如果对未归属的股票奖励有任何修改或取消,我们可能需要加速、增加或取消剩余的未赚取股票薪酬费用。未来的股票薪酬费用和未赚取的股票薪酬将在我们授予额外股票奖励的情况下增加。

 

7. 所得税

 

我们使用负债法进行所得税会计。以下 表格展示了我们根据所示期间的所得税准备金计算的有效税率:

        
   截至九月三十日的三个月 
   2024   2023 
有效税率   10%    0% 

 

我们所呈现期间的有效税率与联邦法定税率之间的差异,主要是由于以下原因:(i) 国内亏损记录的税收利益与全额估值备抵,(ii) 我们对整个财政年度的税前盈利能力的当前预计,以及(iii) 外国收入受到与联邦法定税率不同的税率征税的影响。

 

截至2024年9月30日和2024年6月30日,我们有净递延所得税负债 $248,000 和$179,000 该余额代表我们的无限期递延所得税负债超过我们的无限期递延所得税资产,记录在附带的未经审计的简明合并资产负债表中的其他非流动负债中。

 

递延税资产的实现取决于未来应税收入的产生。根据会计标准编纂主题740的要求,我们评估了对我们实现递延税资产能力的正面和负面证据。我们已确定,由于我们累计亏损和未来应税收入的不确定性,创力不太可能实现递延税资产,因此我们在2024年9月30日和2024年6月30日对我们的递延税资产提供了全面的估值备抵。

 

 

 

 19 

 

 

8. 承诺与或有事项

 

我们在普通商业活动中不时会面临法律诉讼和索赔。我们目前尚未意识到任何此类法律诉讼或索赔,我们认为它们在单独或整体上不会对我们的业务、前景、财务状况、经营结果或现金流产生重大不利影响。我们为和解和判决、以及法律辩护费用维持保险政策,尽管我们维持的保险覆盖金额可能不足以 couvre 所有可能出现的索赔或责任。此外,公司章程、章程细则及与现任和前任董事及高管签订的赔偿协议的条款要求我们,在其他事项外,赔偿这些董事和高管因其作为董事或高管的身份或服务而可能产生的某些责任,并在此过程中向这些董事或高管预付费用。

 

9. 后续事件

 

在2024年11月7日,我们与DZS, Inc.的子公司NetComm Wireless Pty Ltd(「NetComm」)签署了最终协议,以6,500,000美元的现金收购其所有的企业物联网-5G业务资产,并承担某些负债。交易的完成需满足特定条件。预计该交易将在我们截至2024年12月31日的第二个财务季度完成。

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 20 

 

 

项目2。 管理层对 财务状况 和 经营成果 的讨论与分析

 

以下我们对财务状况和经营成果的讨论与分析应与我们的未经审计的简明合并基本报表及包括在本季度报告第I部分第1项中的相关说明一起阅读,该报告涵盖截至2024年9月30日的三个月(此「报告」)。此讨论和分析包含基于我们当前预期的前瞻性陈述,并反映我们计划、估计和预期的未来财务表现。请参见本报告中标题为“关于前瞻性声明的警示说明”的部分以获取更多信息。这些陈述涉及许多风险和不确定性。我们的实际结果可能会因多种因素而与这些前瞻性陈述所表达或暗示的结果存在实质性差异,具体因素包括在“风险因素”部分中列出的第II部分第1A项的内容。

 

除非上下文另有指示,所有对「公司」、「创力」、「我们」、「我们」和「我们的」在本季度报告(表格10-Q)中的引用都包括创力公司及其合并子公司。

 

概述

 

创力公司是计算和连接解决方案的全球领导者, 目标是智能城市、汽车-半导体和企业市场等高速增长的行业。我们的产品和服务使公司能够利用不断扩大的物联网-5G("物联网-5G")市场,提供可定制的解决方案,解决物联网-5G堆栈的每一层。

 

我们在全球开展业务,并根据三个地理区域管理我们的销售团队:美洲;欧洲、中东、非洲(「EMEA」);以及亚太日本(「APJ」)。

  

产品与解决方案概述

 

我们将我们的投资组合服务和产品组织成以下产品线:嵌入式物联网-5G模块、物联网-5G系统解决方案,以及软件和工程服务。

 

嵌入式物联网-5G模块

 

我们的嵌入式产品组合提供了一系列全面的期权, 包括计算系统模块(「SOM」)和ARVR封装系统(「SIP」)解决方案,并配有有线和 无线网络连接产品。随着硅集成水平的不断提高,我们的计算模块能够收集、分析和解释数字信息(例如,视频、音频或传感器-半导体数据),使用专业的人工智能(「人工智能」)/机器学习算法。

 

物联网-5G系统解决方案

 

我们的物联网-5G系统解决方案产品组合提供多种完全功能的 独立系统,这些系统提供路由、交换或网关功能,以及远程信息处理和媒体转换。这些产品 包括有线和无线连接,通过提供安全 网络连接、通过以太网供电(「PoE」)为物联网-5G终端设备供电、应用托管、协议转换、 媒体转换、为分布式物联网-5G部署提供安全访问以及其他许多功能,提高了现代电子系统和设备的价值和效用。通过在多个 区域提供预认证产品,创力显著降低了原始设备制造商客户的监管认证成本并加快了 他们的市场时间。

 

 

 

 21 

 

 

软件和服务

 

我们的Saas-云计算平台提供全面的单一玻璃管理 用于带外(「OOB」)和物联网-5G部署。我们的平台使客户能够轻松地在全球部署中进行部署、监控、管理和自动化, 所有操作均可通过单一平台登录,虚拟和无缝地连接,仿佛直接位于每个设备上。 我们的平台消除了现场需要24小时全天候人员的需求,让观察和快速解决问题变得简单,即使在大规模 deployments中。

 

我们利用深厚的工程专业知识和产品开发最佳实践,以具有成本效益和按时交付的方式提供高质量、创新的产品。我们的工程服务模型灵活,提供交钥匙产品开发或团队增强,以加速应对复杂的产品开发挑战,例如相机调试、语音控制、机器学习、人工智能、计算机-半导体视觉、增强/虚拟现实等等。

 

我们还提供与我们的OOb及某些其他产品系列相关的延长保修、压力位和维护服务。

 

近期会计公告

 

请参阅 注释1 有关未经审计的简明合并基本报表的附注,包含在本报告的第一部分,第1项中,引用于此以供讨论最近的会计公告。

 

重要会计政策和估计

 

对我们的财务 控件和营业收入结果有最大影响且需要最多判断的会计政策包括与营业收入确认、销售退货和折扣、 库存估值、重组费用、递延所得税估值、业务组合、商誉及长期 和无形资产估值、基于股票的补偿、诉讼及其他或有事项相关的政策。这些政策在我们截至2024年6月30日的年度报告(表格10-K)中有进一步详细描述,该报告于2024年9月9日提交给证券交易委员会(「SEC」),并且在截至2024年9月30日的三个月期间内与先前在表格10-K中披露的内容相比没有显著变化。

 

运营结果 - 截至2024年9月30日的三个月与截至2023年9月30日的三个月比较

 

摘要

 

截至2024年9月30日的三个月内,我们的营业收入增加了139.2万美元或4.2%,与截至2023年9月30日的三个月相比。营业收入的增加主要得益于我们的嵌入式物联网-5G解决方案产品线营业收入增加了17.7%,部分被我们的软件和服务产品线营业收入下降13.2%以及物联网-5G系统解决方案产品线营业收入下降1.5%所抵消。我们在截至2024年9月30日的三个月内有250.2万美元的净亏损,而在截至2023年9月30日的三个月内净亏损为188.6万美元。净亏损的增加主要是由于截至2024年9月30日的三个月内营业费用增加了93.2万美元,与截至2023年9月30日的三个月相比,这主要与重组和遣散费用的增加有关。这些变化部分被营业收入的增加所抵消。

 

 

 

 22 

 

 

净营业收入

 

以下表格展示了我们按产品线和地域板块分类的净营业收入:

 

   截至九月三十日的三个月         
       净值的百分比       净值的百分比   变化 
   2024   营业收入   2023   营业收入   $   % 
   (以千为单位,除百分比外) 
嵌入式物联网-5G解决方案  $13,387    38.9%   $11,373    34.4%   $2,014    17.7% 
物联网-5G系统解决方案   18,759    54.5%    19,036    57.6%    (277)   (1.5%)
软件与服务   2,277    6.6%    2,622    8.0%    (345)   (13.2%)
   $34,423    100.0%   $33,031    100.0%   $1,392    4.2% 

 

   截至九月三十日的三个月         
       净值的百分比       净值的百分比   变化 
   2024   营业收入   2023   营业收入   $   % 
   (以千为单位,除百分比外) 
美洲  $17,420    50.6%   $22,933    69.4%   $(5,513)   (24.0%)
欧洲、中东、非洲   10,484    30.5%    6,591    20.0%    3,893    59.1% 
亚太地区   6,519    18.9%    3,507    10.6%    3,012    85.9% 
   $34,423    100.0%   $33,031    100.0%   $1,392    4.2% 

 

嵌入式物联网-5G解决方案

 

净营业收入的增长主要得益于我们在亚太、日本区域和美洲区域嵌入式计算产品线单位销售的增加。这部分被我们在所有区域的嵌入式以太网连接产品和网络接口卡单位销售的减少所抵消。

 

物联网-5G系统解决方案

 

净营业收入下降主要是由于(i)我们在美洲和欧洲、中东、非洲地区的OOb产品的销售量减少,以及(ii)我们在美洲和亚太地区的网络交换机销售量减少。这些减少主要通过我们为一家欧洲智能能源网提供商销售定制解决方案所抵消,该解决方案的生产在上一财政年度下半年开始 ramp up。

 

软件与服务

 

营业收入减少主要是由于我们在欧洲、中东、非洲地区的工程服务营业收入下降,因为我们两个大型设计服务项目在去年从设计阶段过渡到全生产阶段。

 

 

 

 23 

 

 

毛利润

 

毛利润代表净营业收入减去营业成本。营业成本 主要包括原材料元件的成本、来自代工厂商的分包劳动力组装、与专业服务相关的直接和间接 人员费用、制造业-半导体-半导体间接费用、过剩和过时产品或原材料的库存准备金、保修成本、特许权使用费和基于股份的补偿。

 

下表展示了我们的毛利润:

 

   截至九月三十日的三个月         
       净值的百分比       净值的百分比   变化 
   2024   营业收入   2023   营业收入   $   % 
   (以千为单位,除百分比外) 
毛利润  $14,475    42.1%   $14,097    42.7%   $378    2.7% 

 

毛利润占营业收入的百分比(称为「毛利率」) 略有下降,主要是由于我们的产品销售组合,因为嵌入式计算产品在当前期间的营业收入中占据了更大的部分。

 

销售、一般和管理费用

 

销售、一般及行政费用包括与人员相关的费用, 包括薪水和佣金、基于股份的补偿、设施费用、信息科技、交易展览费用、 广告以及法律和会计费用。

  

下表列出了我们的销售、一般和行政费用:

 

   截至九月三十日的三个月         
       净值的百分比       净值的百分比   变化 
   2024   营业收入   2023   营业收入   $   % 
   (以千为单位,除百分比外) 
人员相关费用  $5,321        $4,837        $484    10.0% 
专业费用和外部服务   1,521         1,540         (19)   (1.2%)
广告和营销   466         482         (16)   (3.3%)
设施和保险   411         514         (103)   (20.0%)
基于股份的报酬   1,126         1,273         (147)   (11.5%)
折旧   351         334         17    5.1% 
其他   300         190         110    57.9% 
销售、一般和行政  $9,496    27.6%   $9,170    27.8%   $326    3.6% 

 

销售、一般和行政费用的增加主要是由于 与人员相关的成本上升,这源于年度薪酬增加和人员变动。费用的增加 部分被以下因素抵消:(i) 由于撤销某些作废奖励,股权激励成本减少,(ii) 由于之前对某些非核心业务进行重组,设施 及相关成本降低。

 

 

 

 24 

 

 

研发

 

研发费用包括与人员相关的费用, 包括基于股票的补偿,以及支付给第三方厂商的研发活动和产品 认证费用的支出。我们每季度与外部服务和产品认证相关的成本根据 我们的开发活动水平在不同时期有所不同。

 

下表展示了我们的研发费用:

 

   截至九月三十日的三个月         
       净值的百分比       净值的百分比   变化 
   2024   营业收入   2023   营业收入   $   % 
   (以千为单位,除百分比外) 
与人员相关的费用  $3,272        $3,259        $13    0.4% 
设施   648         619         29    4.7% 
外部服务   176         176             0.0% 
产品认证   138         347         (209)   (60.2%)
基于股份的报酬   410         428         (18)   (4.2%)
其他   312         277         35    12.6% 
研究与开发  $4,956    14.4%   $5,106    15.5%   $(150)   (2.9%)

 

研发费用的减少主要是由于在各种正在进行的开发项目中,产品认证费用的下降以及成本发生时间的影响。

  

重组、遣散及相关费用

 

截至2024年9月30日的三个月期间,我们发生了与人力裁减相关的收费 90万美元。截止2023年9月30日的三个月期间,我们发生了2万美元的重组、解雇 和相关费用。

  

随着我们继续识别与我们的业务相关的成本节约和效率,我们可能在未来的期间承担额外的重组、离职和相关费用。

 

利息支出净额

 

截至2024年9月30日和2023年9月30日的三个月内,我们因使用信用融资而产生了净利息费用。我们还从国内现金余额中赚取利息收入。

 

 

 

 25 

 

 

其他收入(支出),净

  

我们的其他收入(支出),净额,主要由外币重估和与我们以美元为功能货币的外国子公司的交易调整组成。

 

所得税准备

 

请参阅 注意 7 未经审计的合并基本报表附注第 1部分,第1项中包含的内容,特此引用,以讨论我们所得税的准备金。

 

流动性和资本资源

 

流动性

 

下表列出了我们的营运资金和现金及现金等价物的详细信息:

 

   9月30日   6月30日,     
   2024   2024   变化 
   (以千计) 
流动资金  $57,115   $58,794   $(1,679)
现金及现金等价物  $26,395   $26,237   $158 

 

我们的主要现金和流动性来源包括我们现有的现金和 现金等价物、借款以及我们现有定期贷款和循环信贷额度(统称为 「优先级」)下的可用金额 信贷额度”),以及运营产生的现金。我们的本金余额需缴纳可变金额的利息 我们的优先信贷额度,未来可能会受到利率上升的不利影响。我们认为我们目前的现金 持股量和运营产生的净现金流足以在可预见的将来履行我们目前的债务,并且,假设 继续获得我们的优先信贷额度下可用的未提取款项,这些合并来源将足以提供资金 我们对至少未来12个月的营运资金、资本支出和其他财务承诺的物质要求,以及 超越。我们将继续监测我们现有的银行关系以及潜在的替代信贷来源的可用性 视市场状况和我们持续的资本要求而定。无法保证我们能够获得任何所需的替代品 按可接受的条件进行融资,或完全按贷款协议进行融资,或者此类融资不会导致违约(如定义) 在 备注 5 未经审计的简明合并财务报表附注,包含在本报告第一部分第1项中)。我们预计 影响我们现金和流动性的主要因素是净收入、营运资金需求和资本支出。

 

我们将现金及现金等价物定义为在购买时原始期限为90天或更短的高流动性存款。我们在某些金融机构保持超过联邦存款保险公司(「FDIC」)保险金额的现金及现金等价物余额。不能保证我们超过FDIC限额的存款将得到美国的支持,或者我们与之做生意的任何银行或金融机构在出现故障或流动性危机时能够从其他银行、政府机构或通过收购获得所需的流动性。

 

截至本报告日期,我们已经完全访问并控制了在硅谷银行和我们其他银行机构的现金及现金等价物余额。我们主要强调本金的安全,其次是最大化这些资金的收益。截至本报告日期,我们已遵守贷款协议的所有条款。

 

 

 

 26 

 

 

我们未来的运营资金需求将取决于许多因素,包括: 我们的营业收入的时机和金额;我们的产品组合及其相应的毛利;研发费用; 销售、一般和行政费用;以及与任何战略合作伙伴关系、收购或制造行业投资相关的费用。

 

我们可能会不时寻求通过公共或私人资本股票的发行、现有或未来信贷额度的借款或其他来源获取额外资本,以便 (i) 开发或增强我们的产品,(ii) 利用战略机会,(iii) 应对竞争,或 (iv) 继续运营我们的业务。我们目前已向美国证券交易委员会提交了一份S-3表格的货架注册声明。如果我们发行股权证券以筹集额外资金,我们现有的股东可能会面临稀释,新发行的股权证券可能享有优于现有股东的权利、优先权和特权。如果我们发行债务证券以筹集额外资金,我们可能会产生债务服务义务,受到额外限制,从而限制或限制我们运营业务的能力,或被要求进一步抵押我们的资产。我们无法保证能够以我们能够接受的条款筹集到任何这样的资本。

 

银行贷款协议

 

请参阅 注释5 未经审计的简明合并基本报表的注释,包含在本报告的第一部分,第1项中,特此引用,以讨论我们的贷款协议。

 

现金流

 

下表展示了未经审计的简明合并现金流量表的主要元件:

             
   截至三个月
9月30日
     
   2024   2023   变化 
   (以千计) 
经营活动提供的净现金  $2,663   $7,498   $(4,835)
投资活动使用的净现金   (157)   (486)   329 
融资活动中使用的净现金   (2,348)   (985)   (1,363)

 

经营活动

 

截至2024年9月30日的三个月内,经营活动提供的现金较上年同期减少。由于我们减少了库存,并收到了与交付给欧洲智能电网供应商客户相关的客户存款,上年同期的经营现金流增加。在本年度期间,库存略有增加,并且我们还针对先前累计的变量补偿余额进行了支付,下面会进一步讨论。截止2024年9月30日的三个月,我们的净损失包含$3,418,000的非现金费用,而运营资产和负债的变动提供了净现金$1,747,000。

 

截至2024年6月30日,我们的净库存增加了1,835,000美元,或6.6%,至2024年9月30日。此次增加主要是由于本季度各种物料收货的时间安排与我们向客户发货的时间相比。

 

应付账款从2024年6月30日增加到2024年9月30日增加了6,802,000美元,或65.7%。增加的主要原因是当前季度末附近的库存收货时机,以及支付给供应商的款项。

 

 

 

 27 

 

 

代工厂商的应收账款从2024年6月30日到2024年9月30日增加了$1,321,000,或94.3%。增加的主要原因是本季度向代工厂商发运元件的时间安排。

 

应计工资及相关费用从2024年6月30日到2024年9月30日减少了2,396,000美元,或41.1%。减少的主要原因是本季度支付的应计变量补偿。

 

投资活动

 

截至2024年9月30日的三个月内,投资活动使用的净现金共计157,000美元,主要用于我们代工厂商的工具设备采购以及某些研发项目。2023年9月30日结束的三个月内使用的现金共计486,000美元,主要用于研究开发和某些业务分析工具的厂房及设备采购。

 

融资活动

 

截至2024年9月30日和2023年9月30日止三个月的融资活动中使用的净现金主要来源于代表员工支付的限制性股票的税款预扣,以及对高级信贷设施的本金支付。

 

项目3。 关于市场风险的定量和定性披露

 

作为一家规模较小的报告公司,我们不需要提供本项目3所要求的信息。

 

项目4。 控件和程序

 

披露控制及程序的评估

 

我们维护披露控制和程序 (根据1934年证券交易法修订版(「交易所法」)第13a-15(e)和15d-15(e)条规则的定义) 旨在确保根据交易所法在我们的报告中需要披露的信息被记录、处理、汇总 并在SEC的规则和表格规定的时间内报告,并且这些信息被累积并传达给管理层,包括我们的首席执行官和首席财务官,以便在需要披露时做出及时决策。在设计和评估披露控制和程序时,管理层认识到任何控制和程序,无论设计和操作得多么好,只能提供合理的保证以达到预期的控制目标,管理层需要在评估可能的控制和程序的成本效益关系时运用其判断。

 

我们的管理层在首席执行官和临时首席财务官的参与下,对我们截至2024年9月30日的披露控制和程序的有效性进行了评估。根据此评估,我们的首席执行官和临时首席财务官得出结论,截止2024年9月30日,我们的披露控制和程序是有效的。有关之前披露的重大缺陷的补救措施,请参见以下的详细讨论。

  

 

 

 28 

 

 

财务报告内部控制中的重大缺陷

 

正如我们在截至2023年6月30日的财政年度的10-K表格年度报告中的管理层关于内部控制的报告中所述,我们在与公司信息系统相关的信息科技一般控制的设计和实施方面识别出了一项与基本报表准备相关的重大内部控制缺陷。具体而言,管理层没有设计和维护用户访问控制,以确保适当的职责分离,并充分限制用户对财务应用程序和数据的访问。

 

在截至2024年6月30日的财政年度,管理层实施了其 之前披露的改进计划,以增强与用户访问和适当的职务分离相关的信息科技一般控制(「ITGCs」)的设计。该计划包括:

 

  · 修改用户权限,以显著限制对某些关键财务应用程序和功能的访问。
  · 在财务系统工作流程中实施额外的审核和批准要求。
  · 创建新的审计报告,要求管理层审核和批准对财务应用程序中关键属性所做的更改。
  · 改善和维护ITGC支持的文档,以促进在人员和职能变更时的知识转移。
  · 实施IT管理审核和测试计划,以监控用户访问,特别关注财务应用程序。

 

截至2024年6月30日,管理层已实施上述关于重大缺陷的补救措施和控制。由于我们在2024财年第四季度进行设计和实施补救工作的时间关系,未能展示某些控制措施的一致执行,也无法就截至2024年6月30日的财务报告内部控制的运行有效性得出结论。随后,至2024年9月30日,管理层已确定适当的时间已过去,可以通过测试足够数量的实例来展示补救控制的运行有效性。

 

对财务报告内部控制的变更

 

除了与补救上述重大缺陷相关的控制措施正在进行的变更外,在截至2024年9月30日的季度内,未发现与《交易所法》第13a-15(f)和15d-15(f)条款要求的评估相关的内部财务报告控制发生变更,这些变更在实质上影响了,或合理可能实质性影响我们的内部财务报告控制。

 

 

 

 

 

 29 

 

 

第二部分。其他信息

 

项目 1。 法律程序

 

请参阅 第8条 关于截至2024年9月30日的三个月未经审计的简明合并基本报表的说明,包含于本季度报告的第I部分,第1项,格式为10-Q(本报告), 在此引用以讨论法律程序。

 

项目 1A。 风险因素

 

我们在一个快速变化的环境中运营,涉及多种风险和不确定性。在决定购买、持有或卖出我们的普通股票之前,您应仔细考虑本节中描述的风险,以及本报告和我们向证券交易委员会(「SEC」)提交的其他文件中包含的其他信息。本节应与本报告第I部分第1项中包含的未经审计的简明合并基本报表及其附注一起阅读,以及在本报告第I部分第2项中包含的「管理层对财务状况和经营成果的讨论与分析」。如果这些风险或不确定性中的任何一项实际发生,我们的业务、财务状况、经营成果或前景可能会受到重大损害。在这种情况下,我们的普通股票市场价格可能会下降,您可能会失去所有或部分投资。此外,目前我们不知或我们认为不重要的风险和不确定性也可能对我们的业务产生不利影响。

 

以下讨论的风险和不确定性更新并替代了我们2024财年截止于2024年6月30日的10-K表格年报中第I部分第1A项之前披露的风险和不确定性,该年报于2024年9月9日向SEC提交。除了下面用星号(*)标记的风险外,之前披露的10-K年报中的风险和不确定性没有实质性变化。

 

与我们的运营和行业板块相关的风险

 

我们依赖于相对少量的分销商和终端用户 客户来获取我们大部分的营业收入,若对这些主要客户的销售下降将会对我们的业务、 财务状况和经营成果产生重大不利影响。

 

历史上,我们依赖少数几个分销商和终端用户客户来获得相当大部分的净营业收入。我们的客户集中度可能会波动,这取决于未来客户的需求,而这些又将依赖于我们的客户所参与的行业板块的市场控件。失去一个或多个重要客户或对我们重要客户的销售下降可能会导致销售的重大损失,以及可能增加的过剩库存,这将对我们的业务、财务状况和运营结果产生不利影响。

 

我们已经经历过,并可能在未来经历对某些材料和元件的供应限制,这可能会影响我们的运营结果。

 

我们的一些特斯拉-特斯拉-集成电路只能从单一来源获得, 并且在某些情况下,已经不再生产。时不时地,特斯拉-特斯拉-集成电路以及可能在我们产品中使用的其他元件, 将被制造商逐步停产。发生这种情况时,我们会尝试购买足够的库存,以满足我们的需求,直到可以将替代元件纳入我们的产品中。尽管如此,我们可能无法购买足够的元件以满足我们的需求,或者我们可能错误预测我们的需求,导致购买过多或过少的元件。此外,我们的产品使用的元件在过去曾经,并且未来可能会遭遇市场短缺和大幅价格波动, 这可能是由于 COVID-19 大流行或未来的流行病或疫情,乌克兰与俄罗斯之间的战争,中东冲突, 红海的敌对行为,近期中国与台湾之间的紧张关系或其他原因。偶尔,由于无法购买我们产品所需的元件, 我们无法满足客户的订单。我们与大多数供应商没有长期供货协议,以获取所需的元件,包括半导体芯片,或我们产品的科技,而是以采购订单的方式购买元件。如果我们无法从这些供应商购买元件, 我们的产品发货可能会被阻止或延迟,这可能导致销售损失。如果由于元件短缺,我们无法满足现有订单或进入新订单, 我们很可能会失去营业收入,面临失去客户的风险,并可能对我们在市场上的声誉造成损害,这可能会对我们的业务、财务状况或运营结果产生不利影响。

 

 

 

 30 

 

 

未来的经营结果取决于我们能否及时以足够的数量和可接受的条款获得元件。

 

我们和我们的代工厂商负责为我们的产品采购原材料。 我们的产品包含一些仅可从单一或有限来源获得的元件和技术。 依赖有限数量的供应商使我们面临风险,包括对定价、可用性、质量和交货时间表的有限控制。 此外,由于我们的销售有限,除非他们其他客户对这些元件有需求,否则我们可能无法说服供应商继续向我们提供元件。 如果我们的任何一个或多个供应商停止及时向我们提供足够数量的元件,或在对我们可接受的条款下提供元件,我们将不得不寻找替代供应来源,并且可能很难找到一些元件的其他或替代供应商。

 

我们将几乎所有的制造业-半导体-半导体外包给位于亚洲的代工厂商。 如果我们的代工厂商无法或不愿以我们要求的质量和数量来生产我们的产品,我们的 业务可能会受到损害。

 

We use contract manufacturers based in Asia to manufacture substantially all of our products. Generally, we do not have guaranteed supply agreements with our contract manufacturers or suppliers. If any of these subcontractors or suppliers were to cease doing business with us, we might not be able to obtain alternative sources in a timely or cost-effective manner. Our reliance on third-party manufacturers, especially in countries outside of the U.S., exposes us to a number of significant risks, including:

 

  · reduced control over delivery schedules, quality assurance, manufacturing yields and production costs;
     
  · lack of guaranteed production capacity or product supply;
     
  · effects of terrorist attacks or geopolitical conflicts abroad;
     
  · reliance on these manufacturers to maintain competitive manufacturing technologies;
     
  · unexpected changes in regulatory requirements, taxes, trade laws and tariffs;
     
  · reduced protection for intellectual property rights in some countries;
     
  · differing labor regulations;
     
  · disruptions to the business, financial stability or operations, including due to strikes, labor disputes or other disruptions to the workforce, of these manufacturers;
     
  · compliance with a wide variety of complex regulatory requirements;
     
  · fluctuations in currency exchange rates;
     
  · changes in a country’s or region’s political or economic conditions;
     
  · greater difficulty in staffing and managing foreign operations; and
     
  · increased financial accounting and reporting burdens and complexities.

 

 

 

 31 

 

 

Any problems that we may encounter with the delivery, quality or cost of our products from our contract manufacturers or suppliers could cause us to lose net revenue, damage our customer relationships and harm our reputation in the marketplace, each of which could materially and adversely affect our business, financial condition or results of operations. 

 

From time to time, we may transition the manufacturing of certain products from one contract manufacturer to another. When we do this, we may incur substantial expenses, risk material delays or encounter other unexpected issues.

 

The effect of a pandemic or major public health concern such as the COVID-19 pandemic could result in material adverse effects on our business, financial position, results of operations and cash flows.

 

The COVID-19 pandemic or another pandemic or similar outbreak has had, and may in the future have, an adverse impact on the economy, our business and the businesses of our suppliers, and our results of operations and financial condition. For example, the COVID-19 pandemic resulted in industry events, trade shows and business travel being suspended, cancelled and/or significantly curtailed. If these activities are suspended, cancelled and/or significantly curtailed in the future, whether due to surges of COVID-19 or other possible pandemics and similar outbreaks, our sales may be negatively impacted in the future.

 

In addition, the impact of the COVID-19 pandemic or other possible pandemics subject us to various risks and uncertainties that could materially adversely affect our business, results of operations and financial condition, including the following:

 

  · significant volatility or decreases in the demand for our products or extended sales cycles;
     
  · changes in customer behavior and preferences, as customers may experience financial difficulties and/or may delay orders or reduce their spending;
     
  · adverse impacts on our ability to distribute or deliver our products or services, as well as temporary disruptions, restrictions or closures of the facilities of our suppliers or customers and their contract manufacturers;
     
  · further disruptions in our contract manufacturers’ ability to manufacture our products, as some contract manufacturers and suppliers of materials used in the production of our products are, or may be, located in areas more severely impacted by COVID-19 or another possible pandemic, which has limited and could further limit, our ability to obtain sufficient materials to produce and manufacture our products; and
     
  ·

volatility in the availability of raw materials and components that our contract manufacturers purchase and volatility in raw material and other input costs.

 

The duration and extent of a future pandemics or other similar outbreak’s effect on our operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted at this time. The adverse impact of the COVID-19 pandemic or another pandemic or similar outbreak on our business, results of operations and financial condition have been, could continue to be, and may in the future be material.

 

 

 

 32 

 

 

Certain of our products are sold into mature markets, which could limit our ability to continue to generate revenue from these products. Our ability to sustain and grow our business depends on our ability to develop, market, scale, and sell new products.

 

Certain of our products are sold into mature markets that are characterized by a trend of declining demand. As the overall market for these products decreases due to the adoption of new technologies, our revenues from these products have declined, and we expect they will continue to decline in the future. As a result, our future prospects will depend on our ability to develop and successfully market new products that address new and growing markets. Our failure to develop new products or failure to achieve widespread customer acceptance of any new products could cause us to lose market share and cause our revenues to decline. There can be no assurance that we will not experience difficulties that could delay or prevent the successful development, introduction, marketing and sale of new products or product enhancements. Factors that could cause delays include regulatory and/or industry approvals, product design cycle and failure to identify products or features that customers demand. In addition, the introduction and sale of new products often involves a significant technical evaluation, and we often face delays because of our customers’ internal procedures for evaluating, approving and deploying new technologies. For these and other reasons, the sales cycle associated with new products is typically lengthy, often lasting six to 24 months and sometimes longer. Therefore, there can be no assurance that our introduction or announcement of new product offerings will achieve any significant or sustainable degree of market acceptance or result in increased revenue in the near term.

 

Our software offerings are subject to risks that differ from those facing our hardware products.

 

We continue to dedicate significant engineering resources to our management software platform, applications, and SaaS offerings. These product and service offerings are subject to significant additional risks that are not necessarily related to our hardware products. Our ability to succeed with these offerings will depend in large part on our ability to provide customers with software products and services that offer features and functionality that address their specific needs. We may face challenges and delays in the development of this product line as the marketplace for products and services evolves to meet the needs and desires of customers. We cannot provide assurances that we will be successful in operating and growing this product line.

 

In light of these risks and uncertainties, we may not be able to establish or maintain market share for our software and SaaS offerings. As we develop new product lines, we must adapt to market conditions that are unfamiliar to us, such as competitors and distribution channels that are different from those we have known in the past. We have and will encounter competition from other solutions providers, many of whom may have more significant resources than us with which to compete. There can be no assurance that we will recover our investments in this segment, or that we will receive meaningful revenue from or realize a profit from this new segment.

 

We may experience significant fluctuation in our revenue because the timing of large orders placed by some of our customers is often project-based.

 

Our operating results fluctuate because we often receive large orders from customers that coincide with the timing of the customer’s project. Sales of our products and services may be delayed if customers delay approval or commencement of projects due to budgetary constraints, internal acceptance review procedures, timing of budget cycles or timing of competitive evaluation processes. In addition, sometimes our customers make significant one-time hardware purchases for projects which are not repeated. We sell primarily on a purchase order basis rather than pursuant to long-term contracts, and we expect fluctuations in our revenues as a result of one-time project-based purchases to continue in the future. In addition, our sales may be subject to significant fluctuations based on the acceleration, delay or cancellation of customer projects, or our failure to complete one or a series of significant potential sales. Because a significant portion of our operating expenses are fixed, even a single order can have a disproportionate effect on our operating results. As a result of the factors discussed above, and due to the complexities of the industry in which we operate, it is difficult for us to forecast demand for our current or future products with any degree of certainty, which means it is difficult for us to forecast our sales. If our quarterly or annual operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially.

 

 

 

 33 

 

 

The lengthy sales cycle for our products and services, along with delays in customer completion of projects, make the timing of our revenues difficult to predict.

 

We have a lengthy sales cycle for many of our products that generally extends between three and 24 months and sometimes longer due to a lengthy customer evaluation and approval process. The length of this process can be affected by factors over which we have little or no control, including the customer’s budgetary constraints, timing of the customer’s budget cycles, and concerns by the customer about the introduction of new products by us or by our competitors. As a result, sales cycles for customer orders vary substantially among different customers. The lengthy sales cycle is one of the factors that has caused, and may continue to cause, our revenues and operating results to vary significantly from quarter to quarter. In addition, we may incur substantial expenses and devote significant management effort to develop potential relationships that do not result in agreements or revenues, which may prevent us from pursuing other opportunities. Accordingly, excessive delays in sales could be material and adversely affect our business, financial condition or results of operations.

 

The nature of our products, customer base and sales channels results in lack of visibility into future demand for our products, which makes it difficult for us to forecast our manufacturing and inventory requirements.

 

We use forecasts based on anticipated product orders to manage our manufacturing and inventory levels and other aspects of our business. However, several factors contribute to a lack of visibility with respect to future orders, including:

 

  · the lengthy and unpredictable sales cycle for our products that can extend from six to 24 months or longer;
     
  · the project-driven nature of many of our customers’ requirements;
     
  · we primarily sell our products indirectly through distributors;
     
  · the uncertainty of the extent and timing of market acceptance of our new products;
     
  · the need to obtain industry certifications or regulatory approval for our products;
     
  · the lack of long-term contracts with our customers;
     
  · the diversity of our product lines and geographic scope of our product distribution;
     
  · we have some customers who make single, non-recurring purchases; and
     
  · a large number of our customers typically purchase in small quantities.

 

This lack of visibility impacts our ability to forecast our inventory requirements. If we overestimate our customers’ future requirements for products, we may have excess inventory, which would increase our costs and potentially require us to write-off inventory that becomes obsolete. Additionally, if we underestimate our customers’ future requirements, we may have inadequate inventory, which could interrupt and delay delivery of our products to our customers, harm our reputation, and cause our revenues to decline. If any of these events occur, they could prevent us from achieving or sustaining profitability and the value of our common stock may decline.

 

 

 

 34 

 

 

Delays in qualifying revisions of existing products for certain of our customers could result in the delay or loss of sales to those customers, which could negatively impact our business and financial results.

 

Our industry is characterized by intense competition, rapidly evolving technology and continually changing customer preferences and requirements. As a result, we frequently develop and introduce new versions of our existing products, which we refer to as revisions.

  

Prior to purchasing our products, some of our customers require that products undergo a qualification process, which may involve testing of the products in the customer’s system. A subsequent revision to a product’s hardware or firmware, changes in the manufacturing process or our selection of a new supplier may require a new qualification process, which may result in delays in sales to customers, loss of sales, or us holding excess or obsolete inventory.

 

After products are qualified, it can take additional time before the customer commences volume production of components or devices that incorporate our products. If we are unsuccessful or delayed in qualifying any new or revised products with a customer, that failure or delay would preclude or delay sales of these products to the customer, and could negatively impact our financial results. In addition, new revisions to our products could cause our customers to alter the timing of their purchases, by either accelerating or delaying purchases, which could result in fluctuations of our net revenue from quarter to quarter.

 

We depend on distributors for a majority of our sales and to complete order fulfillment.

 

We depend on the resale of products through distributor accounts for a substantial majority of our worldwide net revenue. In addition, sales through our top five distributors accounted for approximately 29% of our net revenue in fiscal 2024. A significant reduction of effort by one or more distributors to sell our products or a material change in our relationship with one or more distributors may reduce our access to certain end customers and adversely affect our ability to sell our products. Furthermore, if a key distributor materially defaults on a contract or otherwise fails to perform, our business and financial results would suffer.

 

In addition, the financial health of our distributors and our continuing relationships with them are important to our success. Our business could be harmed if the financial health of these distributors impairs their performance and we are unable to secure alternate distributors.

 

Our ability to sustain and grow our business depends in part on the success of our distributors and resellers.

 

A substantial part of our revenues is generated through sales by distributors and resellers. To the extent they are unsuccessful in selling our products, or if we are unable to obtain and retain a sufficient number of high-quality distributors and resellers, our operating results could be materially and adversely affected. In addition, our distributors and resellers may devote more resources to marketing, selling and supporting products and services that are competitive with ours, than to our products. They also may have incentives to promote our competitors’ products over our products, particularly for our competitors with larger volumes of orders, more diverse product offerings and a longer relationship with our distributors and resellers. In these cases, one or more of our important distributors or resellers may stop selling our products completely or may significantly decrease the volume of products they sell on our behalf. This sales structure also could subject us to lawsuits, potential liability and reputational harm if, for example, any of our distributors or resellers misrepresents the functionality of our products or services to customers or violates laws or our corporate policies. If we fail to effectively manage our existing or future distributors and resellers effectively, our business and operating results could be materially and adversely affected.

 

Changes to the average selling prices of our products could affect our net revenue and gross margins and adversely affect results of operations.

 

In the past, we have experienced reductions in the average selling prices and gross margins of our products. We expect competition to continue to increase, and we anticipate this could result in additional downward pressure on our pricing. Our average selling prices for our products might also decline as a result of other reasons, including promotional programs introduced by us or our competitors and customers who negotiate price concessions. To the extent we are able to increase prices, we may experience a decline in sales volumes if customers decide to purchase competitive products. If any of these were to occur, our gross margins could decline and we might not be able to reduce the cost to manufacture our products enough or at all to keep up with the decline in prices.

 

 

 

 35 

 

 

If we are unable to sell our inventory in a timely manner, it could become obsolete, which could require us to write-down or write off obsolete inventory, which could harm our operating results.

 

At any time, competitive products may be introduced with more attractive features or at lower prices than ours. If this occurs, and for other reasons, we may not be able to accurately forecast demand for our products and our inventory levels may increase. There is a risk that we may be unable to sell our inventory in a timely manner to avoid it becoming obsolete. If we are required to substantially discount our inventory or are unable to sell our inventory in a timely manner, we would be required to increase our inventory reserves or write off obsolete inventory and our operating results could be substantially harmed.

 

Our failure to compete successfully in our highly competitive market could result in reduced prices and loss of market share.

 

The market in which we operate is intensely competitive, subject to rapid technological advances and highly sensitive to evolving industry standards. The market can also be affected significantly by new product and technology introductions and marketing and pricing activities of industry participants. Our products compete directly with products produced by a number of our competitors. Many of our competitors and potential competitors have greater financial and human resources for marketing and product development, more experience conducting research and development activities, greater experience obtaining regulatory approval for new products, larger distribution and customer networks, more established relationships with contract manufacturers and suppliers, and more established reputations and name recognition. For these and other reasons, we may not be able to compete successfully against our current or potential future competitors. In addition, the amount of competition we face in the marketplace may change and grow as the market for IoT and machine-to-machine networking solutions grows and new companies enter the marketplace. Present and future competitors may be able to identify new markets, adapt new technologies, develop and commercialize products more quickly and gain market acceptance of products with greater success. As a result of these competitive factors, we may fail to meet our business objectives and our business, financial condition and operating results could be materially and adversely affected.

 

Acquisitions, strategic partnerships, joint ventures or investments may impair our capital and equity resources, divert our management’s attention or otherwise negatively impact our operating results.

 

We may pursue acquisitions, strategic partnerships and joint ventures that we believe would allow us to complement our growth strategy, increase market share in our current markets and expand into adjacent markets, broaden our technology and intellectual property and strengthen our relationships with distributors, OEMs and ODMs. For instance, we acquired Maestro, Intrinsyc, the Transition Networks and Net2Edge businesses of Communication Systems, Inc., and Uplogix, Inc. in calendar years 2019, 2020, 2021 and 2022, respectively. Our previous acquisitions have required, and any future acquisition, partnership, joint venture or investment may also require, that we pay significant cash, issue equity and/or incur substantial debt. Acquisitions, partnerships or joint ventures may also result in the loss of key personnel and the dilution of existing stockholders to the extent we are required to issue equity securities. In addition, acquisitions, partnerships or joint ventures require significant managerial attention, which may be diverted from our other operations. These capital, equity and managerial commitments may impair the operation of our business. Furthermore, acquired businesses may not be effectively integrated, may be unable to maintain key pre-acquisition business relationships, may not result in expected synergies, an increase in revenues or earnings or the delivery of new products, may contribute to increased fixed costs, and may expose us to unanticipated liabilities. If any of these occur, we may fail to meet our business objectives and our business, financial condition and operating results could be materially and adversely affected.

 

We may experience difficulties associated with utilizing third-party logistics providers.

 

A portion of our physical inventory management process, as well as the shipping and receiving of our inventory, is performed by a third-party logistics provider in Hong Kong. There is a possibility that third-party logistics providers will not perform as expected and we could experience delays in our ability to ship, receive, and process the related data in a timely manner. This could adversely affect our financial position, results of operations, cash flows and the market price of our common stock.

 

Relying on third-party logistics providers could increase the risk of the following: failing to receive accurate and timely inventory data, theft or poor physical security of our inventory, inventory damage, ineffective internal controls over inventory processes or other similar business risks out of our immediate control.

 

 

 

 36 

 

 

Risks Related to Technology, Cybersecurity and Intellectual Property

 

Cybersecurity breaches and other disruptions could compromise our information and expose us to liability, which could cause our business and reputation to suffer.

 

Increased global information technology security threats and more sophisticated and targeted computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. There have been several recent, highly publicized cases in which organizations of various types and sizes have reported the unauthorized disclosure of customer or other confidential information, as well as cyberattacks involving the dissemination, theft and destruction of corporate information, intellectual property, cash or other valuable assets. There have also been several highly publicized cases in which hackers have requested “ransom” payments in exchange for not disclosing customer or other confidential information or for not disabling the target company’s computer or other systems. The secure processing, maintenance and transmission of the information that we collect and store on our systems is critical to our operations and implementing security measures designed to prevent, detect, mitigate or correct these or other cybersecurity threats involves significant costs. Although we have taken steps to protect the security of our information systems, we have, from time to time, experienced, and we expect to continue experiencing, threats to our data and systems, including malware, phishing and computer virus attacks, and it is possible that in the future our safety and security measures will not prevent the systems’ improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cyber-attacks. In addition, due to the fast pace and unpredictability of cybersecurity threats, including from emerging technologies, such as advanced forms of machine learning, AI and quantum computing, long-term implementation plans designed to address cybersecurity risks become obsolete quickly and, in some cases, it may be difficult to anticipate or immediately detect such incidents and the damage they cause. Any unauthorized access, disclosure or other loss of information could result in legal claims or proceedings, disrupt our operations, damage our reputation, and cause a loss of confidence in our products and services, which could adversely affect our business.

 

If unauthorized access is obtained to the personal and/or proprietary data we collect and store, our products become subject to cybersecurity breaches, or if public perception is that they are vulnerable to cyberattacks, our reputation and business could suffer.

 

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, suppliers and business partners, and personally identifiable information of our employees, on our networks and third-party cloud software providers. If there is unauthorized access to such information, we may incur significant costs or liabilities and lose customer confidence in us, which would harm our reputation and results of operations. In addition, we could be subject to liability or our reputation could be harmed if technologies integrated into our products, or our products, fail to prevent cyberattacks, or if our partners or customers fail to safeguard the systems with security policies that conform to industry best practices. In addition, any cyberattack or security breach that affects a competitor’s products could lead to the negative perception that our solutions are or could be subject to similar attacks or breaches.

 

Some of our software offerings may be subject to various cybersecurity risks, which are particularly acute in the cloud-based technologies operated by us and other third parties that form a part of our solutions.

 

In connection with certain implementations of our management software platform, application, and SaaS offerings, we expect to store, convey and process data produced by devices. This data may include confidential or proprietary information, intellectual property or personally identifiable information of our customers or other third parties with whom they do business. It is important for us to maintain solutions and related infrastructure that are perceived by our customers and other parties with whom we do business to provide a reasonable level of reliability and security. Despite available security measures and other precautions, the infrastructure and transmission methods used by our products and services may be vulnerable to interception, attack or other disruptive problems.

 

If a cyberattack or other security incident were to allow unauthorized access to or modification of our customers’ data or our own data, whether due to a failure with our systems or related systems operated by third parties, we could suffer damage to our brand and reputation. The costs we would incur to address and fix these incidents could significantly increase our expenses. These types of security incidents could also lead to lawsuits, regulatory investigations and increased legal liability, including in some cases contractual costs related to customer notification and fraud monitoring.

 

 

 

 37 

 

 

Failure to comply with data privacy laws and regulations could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences.

 

Certain of our products and services as well as the operations of our business may involve access or exposure to personally identifiable or otherwise confidential information and customer data and systems, the misuse or improper disclosure of which could result in legal liability. The collection, hosting, transfer, disclosure, use, storage and security of personal information is subject to federal, state and foreign data privacy laws. These laws, (“Privacy and Data Protection Requirements”) which are not uniform, do one or more of the following: regulate the collection, transfer (including in some cases, the transfer outside the country of collection), processing, storage, use and disclosure of personal information, and require notice to individuals of privacy practices and in some cases consent to collection of personal information; give individuals certain access, correction and deletion rights with respect to their personal information; and prevent the use or disclosure of personal information, or require providing opt-outs for the use and disclosure of personal information, for secondary purposes such as marketing. Under certain circumstances, some of these laws require us to provide notification to affected individuals, data protection authorities and/or other regulators in the event of a data breach. In many cases, these laws apply not only to third-party transactions, but also to transfers of information among us and our subsidiaries.

 

Laws and regulations in this area are evolving and generally becoming more stringent. For example, the European General Data Protection Regulation (the “GDPR”) requires us to meet stringent requirements regarding (i) our access, use, disclosure, transfer, protection, or otherwise processing of personal information; and (ii) the ability of data subjects to exercise their related various rights such as to access, correct or delete or limit the use of their personal data. Under the GDPR and the U.K.’s version of the GDPR, information transfers from the European Union and the U.K. to the U.S. are generally prohibited unless certain measures are followed. The 2018 California Consumer Privacy Act and California Privacy Rights Act of 2020 provide individuals similar rights with respect to the processing of their personal data. In addition to California, Colorado, Virginia, Utah and Connecticut previously enacted comprehensive privacy legislation, and in 2023 and 2024, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, New Jersey, New Hampshire, Oregon, Rhode Island, Tennessee and Texas enacted such laws. There is also the possibility of federal privacy legislation and increased enforcement by the Federal Trade Commission under its power to regulate unfair and deceptive trade practices. Markets in the Asia Pacific region have also recently adopted GDPR-like legislation, including China’s new Personal Information Protection Law. Failure to meet Privacy and Data Protection Law requirements could result in significant civil penalties (including fines up to 4% of annual worldwide revenue under the GDPR) as well as criminal penalties. Privacy and data protection law requirements also confer a private right of action in some countries, including under the GDPR.

 

As these laws continue to evolve, we may be required to make changes to our systems, services, solutions and/or products to enable us and/or our clients to meet the new legal requirements, including by taking on more onerous obligations, limiting our storage, transfer and processing of data and, in some cases, limiting our service and/or solution offerings in certain locations and our ability to market to customers. Changes in these laws, or the interpretation and application thereof, may also increase our potential exposure through significantly higher potential penalties for non-compliance. The costs of compliance with, and other burdens imposed by, such laws and regulations and client demand in this area may limit the use of, or demand for, our services, solutions and/or products, make it more difficult and costly to meet client expectations, or lead to significant fines, penalties or liabilities for noncompliance, any of which could adversely affect our business, financial condition, and results of operations.

 

If software that we incorporate into our products were to become unavailable or no longer available on commercially reasonable terms, it could adversely affect sales of our products, which could disrupt our business and harm our financial results.

 

Certain of our products contain software developed and maintained by third-party software vendors or which are available through the “open source” software community. We also expect that we may incorporate software from third-party vendors and open source software in our future products. Our business would be disrupted if this software, or functional equivalents of this software, were either no longer available to us or no longer offered to us on commercially reasonable terms. In either case, we would be required to either redesign our products to function with alternate third-party software or open source software, or develop these components ourselves, which would result in increased costs and could result in delays in our product shipments. Furthermore, we might be forced to limit the features available in our current or future product offerings.

 

 

 

 38 

 

 

Our products may contain undetected software or hardware errors or defects that could lead to an increase in our costs, reduce our net revenue or damage our reputation.

 

We currently offer warranties ranging from one to five years on each of our products. Our products could contain undetected software or hardware errors or defects. If there is a product failure, we might have to replace all affected products, or we might have to refund the purchase price for the units. Regardless of the amount of testing we undertake, some errors might be discovered only after a product has been installed and used by customers. Any errors discovered after commercial release could result in financial losses and claims against us. Significant product warranty claims against us could harm our business, reputation and financial results and cause the market price of our common stock to decline.

 

We may not be able to adequately protect or enforce our intellectual property rights, which could harm our competitive position or require us to incur significant expenses to enforce our rights.

 

We rely primarily on a combination of laws, such as patent, copyright, trademark and trade secret laws, and contractual restrictions, such as confidentiality agreements and licenses, to establish and protect our proprietary rights. Despite any precautions that we have taken:

 

  · laws and contractual restrictions might not be sufficient to prevent misappropriation of our technology or deter others from developing similar technologies;
     
  · other companies might claim intellectual property rights based upon prior use that negatively impacts our ability to enforce our trademarks and patents; and
     
  · policing unauthorized use of our patented technology and trademarks is difficult, expensive and time-consuming, and we might be unable to determine the extent of this unauthorized use.

 

Also, the laws of some of the countries in which we market and manufacture our products offer little or no effective protection of our proprietary technology. Reverse engineering, unauthorized copying or other misappropriation of our proprietary technology could enable third parties to benefit from our technology without paying us for it. Consequently, we may be unable to prevent our proprietary technology from being exploited by others in the U.S. or abroad, which could require costly efforts to protect our technology. Policing the unauthorized use of our technology, trademarks and other proprietary rights is expensive, difficult and, in some cases, impracticable. Litigation may be necessary in the future to enforce or defend our intellectual property rights, to protect our trade secrets or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of management resources, either of which could harm our business. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property, which may harm our business, financial condition and results of operations.

 

The impact of natural disasters and other business interruptions could negatively impact our supply chain and customers resulting in an adverse impact to our revenues and profitability.

 

Certain of our components and other materials used in producing our products are from regions susceptible to natural disasters. A natural disaster could damage equipment and inventory at our suppliers’ facilities, adversely affecting our supply chain. If we are unable to obtain these materials, we could experience a disruption to our supply chain that would hinder our ability to produce our products in a timely manner, or cause us to seek other sources of supply, which may be more costly or which we may not be able to procure on a timely basis. In addition, our customers may not follow their normal purchasing patterns or temporarily cease purchasing from us due to impacts to their businesses in the region, creating unexpected fluctuations or decreases in our revenues and profitability. Natural disasters in other parts of the world on which our operations are reliant also could have material adverse impacts on our business.

 

In addition, our operations and those of our suppliers are vulnerable to interruption by fire, earthquake, power loss, telecommunications failure, cybersecurity breaches, IT systems failure, terrorist attacks and other events beyond our control, including the effects of climate change. A substantial portion of our facilities, including our corporate headquarters and other critical business operations, are located near major earthquake faults and, therefore, may be more susceptible to damage if an earthquake occurs. We do not carry earthquake insurance for direct earthquake-related losses. If a business interruption occurs, whether due to a natural disaster or otherwise, our business could be materially and adversely affected.

 

 

 

 39 

 

 

Risks Related to Liquidity and Capital Resources

 

We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance.

 

We regularly maintain domestic cash deposits in the Federal Deposit Insurance Corporation (“FDIC”) insured banks, which exceed the FDIC insurance limits. Bank failures, events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, or concerns or rumors about such events, may lead to widespread demands for customer withdrawals and liquidity constraints that may result in market-wide liquidity problems. For example, in March 2023, Silicon Valley Bank (“SVB”), Signature Bank Corp. and Silvergate Capital Corp. each failed and was taken into receivership by the FDIC. At that time, we maintained deposits amounting to approximately 85% of our total cash at SVB. While we were able to regain full access to our deposits with SVB and have taken steps to diversify our banking relationships since then, our loan agreement with SVB currently requires us to hold 50% of our company-wide cash balances at SVB. Consequently, any future failure of that bank could simultaneously prevent access to both a substantial portion of our cash holdings and to our credit line for funds needed to meet our working capital requirements and other financial commitments. Our cash balances are concentrated at a small number of financial institutions. In addition, current macroeconomic conditions caused turmoil in the banking sector since the failure of SVB. A failure to timely access our cash on deposit with SVB or other banks could require the scaling back of our operations and production, negatively affect our credit, and prevent us from fulfilling contractual obligations. Moreover, there can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S. or any applicable foreign government in the future or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a future failure or liquidity crisis, and such uninsured deposits may ultimately be lost. In addition, if any of the parties with whom we conduct business are unable to access funds due to the status of their financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

 

We have a history of losses.

 

We have historically incurred net losses. There can be no assurance that we will generate net profits in future periods. Further, there can be no assurance that we will be cash flow positive in future periods. In the event that we fail to achieve profitability in future periods, the value of our common stock may decline. In addition, if we are unable to achieve or maintain positive cash flows, we would be required to seek additional funding, which may not be available on favorable terms, if at all.

 

We may need additional capital and it may not be available on acceptable terms, or at all.

 

To remain competitive, we must continue to make significant investments to operate our business and develop our products. Our future capital requirements will depend on many factors, including the timing and amount of our net revenue, research and development expenditures, expenses associated with any strategic partnerships or acquisitions and infrastructure investments, and expenses related to litigation, each of which could negatively affect our ability to generate additional cash from operations. If cash generated from operations is insufficient to satisfy our working capital requirements, we may need to raise additional capital. Looking ahead at long-term needs, we may need to raise additional funds for a number of purposes, including, but not limited to:

 

  · to fund working capital requirements;
     
  · to update, enhance or expand the range of products we offer;
     
  · to refinance existing indebtedness;
     
  · to increase our sales and marketing activities;
     
  · to respond to competitive pressures or perceived opportunities, such as investment, acquisition and international expansion activities; or
     
  · to acquire additional businesses

 

 

 

 40 

 

 

We may seek additional capital from public or private offerings of our capital stock, borrowings under our existing or future credit lines or other sources. If we issue equity or debt securities to raise additional funds, our existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. In addition, if we raise additional funds through collaborations, licensing, joint ventures, or other similar arrangements, it may be necessary to relinquish valuable rights to our potential future products or proprietary technologies, or grant licenses on terms that are not favorable to us. There can be no assurance that we will be able to raise any needed capital on terms acceptable to us, if at all. If we are unable to secure additional financing in sufficient amounts or on favorable terms, we may not be able to develop or enhance our products, take advantage of future opportunities, respond to competition or continue to operate our business.

 

The terms of our Senior Credit Facilities may restrict our financial and operational flexibility and, in certain cases, our ability to operate.

 

The terms of our existing term loan and revolving credit facility restrict, among other things, our ability to incur liens, incur indebtedness, dispose of assets, make investments, make certain restricted payments, merge or consolidate and enter into certain speculative hedging arrangements. Further, we are currently and may in the future be required to maintain specified financial ratios, including pursuant to a maximum leverage ratio, a minimum fixed charge coverage ratio or a minimum liquidity test. Our ability to meet those financial ratios and tests can be affected by events beyond our control, and there can be no assurance that we will meet those tests. Pursuant to our amended credit agreement and the related loan and security agreement, we have pledged substantially all of our assets to our senior lender, SVB. In addition, our loan agreement with SVB currently requires us to hold 50% of our company-wide cash balances at SVB, which may limit our ability to manage our cash holdings effectively.

 

Risks Related to International Operations

 

Rising concern regarding international tariffs could materially and adversely affect our business and results of operations.

 

The current political landscape has introduced significant uncertainty with respect to future trade regulations and existing international trade agreements, as shown by the U.S.-initiated renegotiation of the North America Free Trade Agreement, Brexit in Europe, and the current war between Ukraine and Russia. This uncertainty includes the possibility of imposing tariffs or penalties on products manufactured outside the U.S., including the U.S. government’s increased tariffs on a range of products from China and subsequent tariffs imposed by the U.S. as well as tariffs imposed by trading partners on U.S. goods, the potential for increased trade barriers between the U.K. and the European Union, and export controls or other retaliatory actions against, or restrictions on doing business with Russia, as well as any resulting disruption, instability or volatility in the global markets and industries resulting from such conflict. The institution of trade tariffs both globally and between the U.S. and China specifically, carries the risk of negatively affecting the overall economic conditions of both China and the U.S., which could have a negative impact on us.

 

We cannot predict whether, and to what extent, there may be changes to international trade agreements or whether quotas, duties, tariffs, exchange controls or other restrictions on our products will be changed or imposed. If we are unable to source our products from the countries where we wish to purchase them, either because of regulatory changes or for any other reason, or if the cost of doing so increases, it could have a material adverse effect on our business, financial condition and results of operations. Furthermore, imposition of tariffs may result in local sourcing initiatives, or other developments that make it more difficult to sell our products in foreign countries, which would negatively impact our business and operating results.

 

 

 

 41 

 

 

We face risks associated with our international operations that could impair our ability to grow our revenues abroad as well as our overall financial condition.

 

We believe that our future growth is dependent in part upon our ability to increase sales in international markets. These sales are subject to a variety of risks, including geopolitical events, fluctuations in currency exchange rates, tariffs, import restrictions and other trade barriers, unexpected changes in regulatory requirements, longer accounts receivable payment cycles, potentially adverse tax consequences, and export license requirements. In addition, we are subject to the risks inherent in conducting business internationally, including political and economic instability and unexpected changes in diplomatic and trade relationships. In many markets where we operate, business and cultural norms are different than those in the U.S., and practices that may violate laws and regulations applicable to us such as the Foreign Corrupt Practices Act (the “FCPA”) unfortunately are more commonplace. Although we have implemented policies and procedures with the intention of ensuring compliance with these laws and regulations, our employees, contractors and agents, as well as distributors and resellers involved in our international sales, may take actions in violation of our policies. Many of our vendors and strategic business allies also have international operations and are subject to the risks described above. Even if we are able to successfully manage the risks of international operations, our business may be adversely affected if one or more of our business partners are not able to successfully manage these risks. There can be no assurance that one or more of these factors will not have a material adverse effect on our business strategy and financial condition.

 

Foreign currency exchange rates may adversely affect our results.

 

We are exposed to market risk primarily related to foreign currencies and interest rates. In particular, we are exposed to changes in the value of the U.S. dollar versus the local currency in which our products are sold and our services are purchased, including devaluation and revaluation of local currencies. Accordingly, fluctuations in foreign currency rates could adversely affect our revenues and operating results.

 

Risks Related to Regulatory Compliance and Legal Matters

 

Our inability to obtain appropriate industry certifications or approvals from governmental regulatory bodies could impede our ability to grow revenues in our wireless products.

 

The sale of our wireless products in some geographical markets is sometimes dependent on the ability to gain certifications and/or approvals by relevant governmental bodies. In addition, many of our products are certified as meeting various industry quality and/or compatibility standards.  Failure to obtain these certifications or approvals, or delays in receiving any needed certifications or approvals, could impact our ability to compete effectively or at all in these markets and could have an adverse impact on our revenues.

 

Our failure to comply effectively with regulatory laws pertaining to our foreign operations could have a material adverse effect on our revenues and profitability.

 

We are required to comply with U.S. government export regulations in the sale of our products to foreign customers, including requirements to properly classify and screen our products against a denied parties list prior to shipment. We are also required to comply with the provisions of the FCPA and all other anti-corruption laws, such as the U.K. Anti-Bribery Act, of all other countries in which we do business, directly or indirectly, including compliance with the anti-bribery prohibitions and the accounting and recordkeeping requirements of these laws. Violations of the FCPA or other similar laws could trigger sanctions, including ineligibility for U.S. government insurance and financing, as well as large fines. Failure to comply with the aforementioned regulations could also affect our decision to sell our products in international jurisdictions, which could have a material adverse effect on our revenues and profitability.

 

 

 

 42 

 

 

Our failure to comply effectively with the requirements of applicable environmental legislation and regulation could have a material adverse effect on our revenues and profitability.

 

Certain states and countries have passed regulations relating to chemical substances in electronic products and requiring electronic products to use environmentally friendly components. For example, the European Union has the Waste Electrical and Electronic Equipment Directive, the Restrictions of Hazardous Substances Directive, and the Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals. In the future, China and other countries including the U.S. are expected to adopt further environmental compliance programs. In order to comply with these regulations, we may need to redesign our products to use different components, which may be more expensive, if they are available at all. If we fail to comply with these regulations, we may not be able to sell our products in jurisdictions where these regulations apply, which could have a material adverse effect on our revenues and profitability.

 

Increasing scrutiny and evolving expectations from investors, customers, lawmakers, regulators, and other stakeholders regarding environmental, social and governance practices and disclosures may adversely affect our reputation, adversely impact our ability to attract and retain employees or customers, expose us to increased scrutiny from the investment community or enforcement authorities or otherwise adversely impact our business and results of operations.

 

There is increasing scrutiny and evolving expectations from investors, customers, lawmakers, regulators, and other stakeholders on environmental, social and governance (“ESG”) practices and disclosures, including those related to environmental stewardship, climate change, diversity, equity and inclusion, forced labor, racial justice, and workplace conduct. Regulators have imposed, and likely will continue to impose, ESG-related rules and guidance, which may conflict with one another and impose additional costs on us or expose us to new or additional risks. Moreover, certain organizations that provide information to investors have developed ratings for evaluating companies on their approach to different ESG-related matters, and unfavorable ratings of us or our industry may lead to negative investor sentiment and the diversion of investment to other companies or industries. As a smaller company, we may not have resources to meet the evolving ESG-related expectations of an investment community. 

 

Current or future litigation, including related to intellectual property, could adversely affect us.

 

We are subject to a wide range of claims and lawsuits in the course of our business. Any lawsuit may involve complex questions of fact and law and may require the expenditure of significant funds and the diversion of other resources. The results of litigation are inherently uncertain, and adverse outcomes are possible. Adverse outcomes may have a material adverse effect on our business, financial condition or results of operations.

 

In particular, litigation regarding intellectual property rights occurs frequently in our industry. There is a risk that other third parties could claim that our products, or our customers’ products, infringe on their intellectual property rights or that we have misappropriated their intellectual property. In addition, software, business processes and other property rights in our industry might be increasingly subject to third-party infringement claims as the number of competitors grows and the functionality of products in different industry segments overlaps. Other parties might currently have, or might eventually be issued, patents that pertain to the proprietary rights we use. Any of these third parties might make a claim of infringement against us. The results of litigation are inherently uncertain, and adverse outcomes are possible.

 

 

 

 43 

 

 

Responding to any infringement claim, regardless of its validity, could:

 

  · be time-consuming, costly and/or result in litigation;
     
  · divert management’s time and attention from developing our business;
     
  · require us to pay monetary damages, including treble damages if we are held to have willfully infringed;
     
  · require us to enter into royalty and licensing agreements that we would not normally find acceptable;
     
  · require us to stop selling or to redesign certain of our products; or
     
  · require us to satisfy indemnification obligations to our customers.

 

If any of these occur, our business, financial condition or results of operations could be adversely affected.

 

General Risk Factors

 

High interest rates may negatively impact our results of operations and financing costs.

 

Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies. In an effort to combat inflation, a number of central banks around the world, including the U.S., raised interest rates and may continue to raise them in the future. Higher interest rates may hinder the economic growth in markets where we do business, and has and may continue to have negative impacts on the global economy. Rising interest rates may lead customers to decrease or delay spending on products and projects, including on products that we sell, which may have a material adverse effect on our business, financial condition and results of operations. In addition, higher interest rates impact the amount of interest we pay for our debt obligations and leases and continue and sustained increases in interest rates could negatively impact our financing costs or cash flow.

 

We previously identified a material weakness in our internal control related to ineffective information technology general controls which, if not remediated appropriately or timely, could result in loss of investor confidence and adversely impact our stock price.

 

Internal controls related to the operation of technology systems are critical to maintaining adequate internal control over financial reporting. As disclosed in Part II, Item 9A, during fiscal 2023, management identified a material weakness related to the design and implementation of information technology general controls related to the Company’s information systems that are relevant to the preparation of consolidated financial statements. Specifically, we did not design and maintain user access controls to adequately restrict user access to the financial application and data to appropriate Company personnel. As a result, management concluded that our internal control over financial reporting was not effective as of June 30, 2023 and June 30, 2024. We have implemented remedial measures and expect to remediate the material weakness prior to the end of fiscal 2025. If we are unable to remediate the material weakness, or are otherwise unable to maintain effective internal control over financial reporting or disclosure controls and procedures, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected, which could subject us to litigation or investigations requiring management resources and payment of legal and other expenses, negatively affect investor confidence in our financial statements and adversely impact our stock price.

 

 

 

 44 

 

 

If we are unable to attract, retain or motivate key senior management and technical personnel, it could materially harm our business.

 

Our financial performance depends substantially on the performance of our executive officers and of key engineers, marketing and sales employees. We are particularly dependent upon our technical personnel, due to the specialized technical nature of our business. If we were to lose the services of our executive officers or any of our key personnel and were not able to find replacements in a timely manner, our business could be disrupted, other key personnel might decide to leave, and we might incur increased operating expenses associated with finding and compensating replacements.

 

Our quarterly operating results may fluctuate, which could cause the market price of our common stock to decline.

 

We have experienced, and expect to continue to experience, significant fluctuations in net revenue, expenses and operating results from quarter to quarter. We therefore believe that quarter to quarter comparisons of our operating results are not a good indication of our future performance, and you should not rely on them to predict our future operating or financial performance or the future performance of the market price of our common stock. A high percentage of our operating expenses are relatively fixed and are based on our forecast of future revenue. If we were to experience an unexpected reduction in net revenue in a quarter, we would likely be unable to adjust our short-term expenditures significantly. If this were to occur, our operating results for that fiscal quarter would be harmed. In addition, if our operating results in future fiscal quarters were to fall below the expectations of equity analysts and investors, the market price of our common stock would likely fall.

 

The market price of our common stock may be volatile based on a number of factors, many of which are not under our control.

 

The market price of our common stock has been highly volatile. The market price of our common stock could be subject to wide fluctuations in response to a variety of factors, many of which are out of our control, including:

 

  · adverse changes in domestic or global economic, market and other conditions;
     
  · new products or services offered by our competitors;
     
  · our completion of or failure to complete significant one-time sales of our products;
     
  · actual or anticipated variations in quarterly operating results;
     
  · changes in financial estimates by securities analysts;
     
  · announcements of technological innovations;
     
  · our announcement of significant mergers, acquisitions, strategic partnerships, joint ventures or capital commitments;
     
  · conditions or trends in the industry;
     
  · additions or departures of key personnel;
     
  · increased competition from industry consolidation; and
     
  · sales of common stock by our stockholders or us or repurchases of common stock by us.

 

In addition, the Nasdaq Capital Market often experiences price and volume fluctuations. These fluctuations often have been unrelated or disproportionate to the operating performance of companies listed on the Nasdaq Capital Market.

 

 

 

 45 

 

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

Insider Trading Arrangements

 

During the quarter ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

 

Item 6. Exhibits

 

            Incorporated by Reference

Exhibit

Number

  Description  

Provided

Herewith

  Form   Exhibit  

Filing

Date

                     
3.1   Amended and Restated Certificate of Incorporation of Lantronix, Inc., as amended       10-K   3.1   08/29/2013
                     
3.2   Amended and Restated Bylaws of Lantronix, Inc.       8-K   3.2   11/15/2012
                     
10.1   Fourth Amendment to Third Amended and Restated Loan and Security Agreement dated September 3, 2024 among Lantronix, Inc., Lantronix Holding Company, Lantronix Canada, ULC and Lantronix Technologies Canada (Taiwan) Ltd., Transition Networks, Inc., Uplogix, Inc. and Silicon Valley Bank       10-K   10.42   09/09/2024
                     
10.2   Letter Agreement dated September 14, 2024 between Lantronix, Inc. and Brent Stringham       8-K   10.1   09/16/2024
                     
10.3   Lantronix, Inc. 2020 Performance Incentive Plan, as amended and restated       8-K   10.1   11/06/2024
                     
31.1   Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   X            
                     
31.2   Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002   X            
                     
32.1+   Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   X            
                     
101.INS   Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document   X            
101.SCH   Inline XBRL Taxonomy Extension Schema Document   X            
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document   X            
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document   X            
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document   X            
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document   X            
104   Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)                

_________________

* Indicates management contract or compensatory plan, contract or arrangement.
+ Furnished, not filed.

 

 

 

 46 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  LANTRONIX, INC.
   
     
Date: November 8, 2024 By: /s/ SALEEL AWSARE
    Saleel Awsare
    President and Chief Executive Officer
    (Principal Executive Officer)
     
  By: /s/ BRENT STRINGHAM
    Brent Stringham
   

Chief Accounting Officer and Interim Chief Financial Officer

    (Principal Financial and Accounting Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 47