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

或

☐ 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）

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：

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。 是 ☒ 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。 是 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。

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

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。

第一部分. 财务资讯

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)

详见附注未经审核的简明合并财务报表。

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)

详见附注未经审核的简明合并财务报表。

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)

详见附注未经审核的简明合并财务报表。

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)

详见附注未经审核的简明合并财务报表。

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

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。

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。

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：

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。

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：

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：

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。

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：

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。

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：

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。

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：

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。

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。

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。

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。

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：

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。

第二部分。其他信息

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。

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。

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:

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:

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.

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.

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:

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.

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.

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.

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.

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.

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: