Overview

Our strategy and primary business objective is to be a profitable, IP-rich fabless semiconductor company offering integrated circuits (ICs), antenna modules, and related non-recurring engineering services. We specialize in the development of mmWave semiconductors, primarily in the unlicensed 60 GHz spectrum band for 802.11ad/ay-compliant devices and in the ²⁸⁄₃₉ GHz spectrum bands for 5G-compliant devices. We derive our revenue from selling semiconductor devices and antenna modules based on our mmWave technology.

We have pioneered a high-volume mmWave IC production test methodology using standard, low-cost production test equipment, which we believe places us in a leadership position in addressing the operational challenges of delivering mmWave products into high-volume markets. We also produce and sell complete mmWave antenna modules, which integrate our proprietary mmWave ICs and antennas into a single device, simplifying customers’ radio frequency (RF) engineering and facilitating more opportunities for customer prospects that have not provided RF-type systems.

We previously had a memory product line comprising our Bandwidth Engine IC products, but in May 2023, we initiated an end-of-life (EOL) of these products due to the discontinuation of the foundry process used to produce the wafers by our sole foundry, Taiwan Semiconductor Manufacturing Corporation (TSMC).

We have incurred net losses and have an accumulated deficit, which has resulted in significant negative cash flows and required us to raise substantial amounts of additional capital. This raises significant doubt about our ability to continue as a going concern, and we will need to increase revenues substantially beyond past levels to generate sustainable operating profit and sufficient cash flows to continue our business without raising additional capital.

Recent Developments

Compliance with Nasdaq Continued Listing Requirements

On April 4, 2025, we received a letter from Nasdaq indicating that we no longer met the requirement to maintain a minimum bid price of $1 per share. We have been provided a period of 180 calendar days, or until October 1, 2025, to regain compliance by maintaining a closing bid price of at least $1 per share for a minimum of ten consecutive business days. If we are unable to regain compliance within this period, we may be eligible for an additional 180-day compliance period, provided we meet certain other continued listing requirements. However, if we are unable to cure the deficiency, our common stock may be subject to delisting.

Risks and Uncertainties

We are subject to various risks, including competition, financing and liquidity requirements, rapidly changing customer requirements, limited operating history, pandemics, wars, and the volatility of public markets. Additional capital may only be available to us on terms that could be significantly detrimental to our existing stockholders and our business.

Critical Accounting Policies and Estimates

The preparation of our condensed consolidated financial statements requires us to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. Our significant accounting policies and estimates have not changed materially as of March 31, 2025.

Results of Operations

Net Revenue

Product revenue increased for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to increased shipments of our mmWave ICs and antenna modules, partially offset by a decrease in memory IC product shipments as we completed the final EOL shipments.

We expect revenues to decrease in 2025 compared to 2024 due to the cessation of memory IC product sales, but we expect sales of our mmWave products to increase based on our current order backlog and the expected commencement of production shipments to new customers.

Royalty and other revenue decreased for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to a decrease in royalty revenues from licensees of our memory technology and decreases in non-recurring engineering services revenue related to our mmWave technology.

Cost of Net Revenue and Gross Profit

Cost of net revenue decreased for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to a decrease in amortization of developed technology intangible assets, partially offset by an increase in cost of sales of our mmWave IC and module products.

Gross profit increased for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to an increase in sales of our mmWave IC and module products, partially offset by a decrease in royalty and other revenue and a decrease in sales of our memory IC products. We also sold mmWave inventory that had been written down in prior periods.

Research and Development

Research and development expenses decreased for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to reduced salary and consulting costs, reduced rent expense, and reduced software license expense. We expect total R&D expenses to decrease during 2025 compared to 2024 as a result of our cost reduction initiatives.

Selling, General and Administrative

Selling, general and administrative (SG&A) expenses decreased for the three months ended March 31, 2025 compared to the same period in 2024, primarily due to decreased consulting and professional services costs and decreased amortization of purchased intangible assets. We expect total SG&A expense to remain flat or slightly decrease for 2025 compared to 2024 as we continue to manage our SG&A costs.

Liquidity and Capital Resources; Changes in Financial Condition

Cash Flows

As of March 31, 2025, we had $2.8 million in cash and cash equivalents and $3.0 million in working capital.

Net cash used in operating activities was $1.0 million for the first three months of 2025, primarily due to our net loss of $0.5 million, partially offset by non-cash charges. Net cash used in operating activities was $2.6 million for the first three months of 2024, primarily due to our net loss of $2.0 million, partially offset by non-cash charges.

No cash was provided by or used in investing activities for the three months ended March 31, 2025 and 2024.

Net cash provided by financing activities for the three months ended March 31, 2025 was $0.4 million, primarily from net proceeds from sales under our at-the-market offering program, partially offset by repayment of financing lease liabilities. Net cash provided by financing activities for the three months ended March 31, 2024 was $3.4 million, primarily from net proceeds from a public offering of our common stock and warrants, partially offset by repayment of financing lease liabilities.

Purchase Obligations

At March 31, 2025, we had outstanding non-cancelable purchase orders for inventory, primarily wafers and substrates, and related expenditures of approximately $2.9 million.

Going Concern - Working Capital

We have incurred net losses and have an accumulated deficit, which has resulted in significant negative cash flows and required us to raise substantial amounts of additional capital. We expect to continue to incur operating losses during 2025 and believe that our existing cash and cash equivalents as of March 31, 2025 will enable us to meet our capital needs into the third quarter of 2025.

However, we will need to increase revenues beyond past levels to generate sustainable operating profit and sufficient cash flows to continue our business without raising additional capital. If we are unable to raise sufficient capital, there will be uncertainty regarding our ability to maintain liquidity sufficient to operate our business effectively, which raises substantial doubt as to our ability to continue as a going concern.

We are currently seeking additional financing and implementing cost reduction strategies, but there can be no assurance that such efforts will be successful. If we are unable to raise additional capital or reduce costs sufficiently, we may not be able to develop or enhance our products, continue to expand, hire and retain employees, or respond to competitive pressures, which could seriously harm our ability to execute our business strategy.

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet arrangements or obligations that are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, or capital resources.

Indemnifications

In the ordinary course of business, we enter into contractual arrangements that may include indemnification clauses. No material amounts related to these indemnifications are reflected in our condensed consolidated financial statements for the three months ended March 31, 2025.

Recent Accounting Pronouncements

See Note 1 to the condensed consolidated financial statements for a discussion of recently-issued accounting pronouncements.