UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20172022

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-27115

PCTEL, Inc.

(Exact Name of Registrant as Specified in Its Charter)

(630) (630) 372-6800

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐No☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by checkmark whether the registrant has submitted electronically and posted on the Company’s website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ((§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was acquiredrequired to submit and post such files)). Yes☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitionthe definitions of “large accelerated filer”, "accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

As of June 30, 2017,2022, the last business day of the registrant's most recently completed second fiscal quarter, there were 17,791,49818,677,851 shares of the registrant's common stock outstanding, and the aggregate market value of such shares held by non-affiliates of the registrant (based upon the closing sale price of such shares on the NASDAQNasdaq Global Select Market on June 30, 2017)2022) was approximately $125,963,806.$86,104,893. Shares of the registrant's common stock held by each executive officer and director and by each entity that owns 5% or more of the registrant's outstanding common stock have been excluded because such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purposes.

18,138,54318,990,921 shares of common stock were issued and outstanding as of March 15, 2018.13, 2023.

Documents Incorporated by Reference

PCTEL, Inc.

Form 10-K

For the Fiscal Year Ended December 31, 20172022

TABLE OF CONTENTS

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PART I

Item 1: Business

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). TheseIn some cases, you can identify these forward-looking statements include, among other things, statements concerning our future operations, financial conditionby words such as “may,” “will,” “plans,” “seeks,” “expects,” “anticipates,” “intends,” “believes” and prospects, and business strategies. The words “believe”, “expect”, “anticipate” and otherof similar expressions generally identify forward-looking statements.meaning. Investors in our common stock are cautioned not to place undue reliance on these forward-looking statements. Specifically, these statements include, but are not limited to, statements concerning our future financial performance; growth of our antenna solutions and Industrial Internet of Things (“Industrial IoT”) IoT business and our test and measurement business; our ability to continue to innovate new products; our ability to expand product lines in the European market and through distribution channels; the impact of our transition plan for manufacturing inside and outside China; the impact of the COVID-19 pandemic and the ensuing supply chain disruptions; the impact of geopolitical conditions, including the ongoing war in Ukraine and related sanctions and disruption in petroleum and other markets; the impact economic conditions, including inflation, higher interest rates, economic weakness, and potential recession; the anticipated demand for certain products, including those related to public safety, Industrial IoT, 5G (e.g., the Gflex scanning receiver) agriculture and intelligent transportation; and the anticipated growth of public and private wireless systems. These statements are based on management’s current expectations, and actual results may differ materially from those projected as a result of certain risks and uncertainties. Important factors that could cause such differences include, but are not limited to, the impact of adverse and uncertain economic and political conditions within and outside the U.S., including inflationary pressures, higher interest rates, economic downturn, the potential for a recession, and the ongoing war in Ukraine; inflation and increase in product and material costs; competition within the wireless product industry; disruptions to our workforce, operations, supply chain and customer demand caused by the COVID-19 pandemic and the impact of the pandemic and the ensuing supply chain disruption on our results of operations, financial condition and stock price; our ability to accurately forecast demand for our products; our ability to continue to successfully integrate Smarteq and any future acquisitions into our existing operations; the impact of uncertainty as a result of doing business in China and Europe; the impact of tariffs on certain imports from China; delays in our sales cycles resulting in the cancellation of purchases of our products; the impact of data densification and IoT on capacity and coverage demand; the impact of 5G; customer demand and growth generally in our defined market segments; our ability to access the government market and create demand for our products; the Company's ability to expand its European presence and benefit from additional antenna and Industrial IoT product offerings from Smarteq; and our ability to grow our business and create, protect and implement new technologies and solutions. These and other risks and uncertainties are detailed in our filings with the Securities and Exchange Commission (“SEC”). These forward-looking statements are subject to substantial risks and uncertainties that could cause our future business, financial condition, or results of operations to differ materially from the historical results or currently anticipated results. Investors should carefully review the information contained in Item 1A Risk Factors and elsewhere in, or incorporated by reference into, this Annual Report on Form 10-K.  Other factors not currently anticipated may also materially and adversely affect our results of operations, cash flows and financial position. There can be no assurance that future results will meet expectations. While we believe that the forward-looking statements in this Annual Report on Form 10-K are reasonable, investors should not place undue reliance on any forward-looking statements. In addition, these statements speakmade only as of the date made.hereof. We do not undertake, and expressly disclaim, any obligation to update or alterrevise any forward-looking statements whether as a resultbecause of new information, future events or otherwise, except as may be required by applicable law. Investors should carefully review the information contained in Item 1A Risk Factors.

Overview

Overview

PCTEL, Inc. (“PCTEL”(‘PCTEL’, the “Company”‘Company’, “we”‘we’, “ours”‘ours’, and “us”‘us’)delivers Performance Critical TELecom technology solutions to the wireless industry. We are a leading global supplier of antennas and wireless network testing solutions.PCTEL Connected Solutions segment designs and manufactures precision antennas. PCTEL antennas are deployed in small cells, enterprise Wi-Fi access points, fleet management and transit systems, and in network equipment and devices for the Industrial Internet of Things (“IIoT”). PCTEL RF Solutions segment provides test tools that improve the performance of wireless networks globally. Mobile operators, neutral hosts, and equipment manufacturers rely on PCTEL to analyze, design, and optimize next generation wireless networks.

PCTEL was incorporated in California in 1994 and reincorporated in Delaware in 1998. PCTEL is a leading global provider of wireless technology, including purpose-built Industrial IoT devices, antenna systems, and test and measurement solutions. We strive to solve complex wireless challenges to help organizations stay connected, transform, and grow. We believe we have a strong brand presence and expertise in radio frequency (“RF”), digital and mechanical engineering. We have two product lines (antennas/Industrial IoT devices and test & measurement). Our principal executive offices are located at 471 Brighton Drive, Bloomingdale, Illinois 60108.  Our telephone number at that address is (630) 372-6800 and our website is www.pctel.com.  The information within, or that can be accessed through, our website, is not part of this report.

Segment Reporting

PCTEL operates in two segments for reporting purposes, Connected Solutions and RF Solutions.  Our chief operating decision maker uses operating profits and identified assets for the Connected Solutions and RF Solutions segments for resource allocations.  Each segment has its own segment manager as well as its own engineering, business development, sales and marketing, and operational general and administrative functions.  All of our accounting and finance, human resources, IT and legal functions are provided on a centralized basis through the corporate function. We manage the balance sheet and cash flows centrally at the corporate level, with the exception of trade accounts receivable and inventory which is managed at the segment level. Each of the segment managers reports to and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment.

Connected Solutions Segment

PCTEL’s Connected Solutions segment designs and manufactures precision antennas. Ourantenna products include antennas are deployed primarily in small cells, enterprise Wi-Fi access points, fleet management, IoT applications, and transit systems,systems. Our Industrial IoT devices include ruggedized access points, IoT interface cards and IoT sensor platforms for applications such as logistics, remote monitoring and control. Our test & measurement products are designed to improve the performance of wireless networks globally. Mobile operators, private enterprises, and network equipment manufacturers rely on our products to analyze, design, and optimize next generation wireless networks. We seek out product applications that command a premium for product design and performance, and we avoid commodity markets. Our strength is solving complex wireless challenges for our customers through our products and solutions. To this end, we are constantly seeking to innovate and improve antenna and wireless testing products and capabilities to capture the opportunities of the rapidly evolving wireless industry. We focus on engineering, research, and development to maintain and expand our competitiveness.

In 2021, we acquired all the outstanding stock of Smarteq Wireless Aktiebolag, a Swedish company based in equipmentKista, Sweden, that designs antennas for specialized Industrial IoT and vehicular applications (“Smarteq”), pursuant to a SPA between PCTEL and Allgon Aktiebolag, a Swedish company and holder of the outstanding stock of Smarteq (the “Agreement”). PCTEL paid cash consideration of SEK 56.8 million ($6.8 million) at the close of the transaction, all of which was provided from PCTEL’s existing cash. Smarteq owned all the outstanding stock of SAS Smarteq France (“Smarteq France”), which engaged in sales of Smarteq products. Smarteq France was merged into Smarteq Wireless Aktiebolag on November 1, 2022. We believe the acquisition of Smarteq provides a strong European presence, expertise, and channel partners that we expect will accelerate our growth in Europe, as well as a complementary portfolio of products for our Industrial IoT and intelligent transportation customers worldwide. The results for Smarteq are combined with the Company’s antenna and Industrial IoT device product line.

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Antennas and Industrial IoT Devices

PCTEL designs and manufactures precision antennas and Industrial IoT devices, for the IIoT. Weand we offer in-house wireless product development for our customers, including design, testing, radio integration, and manufacturing capabilities for our antenna customers.capabilities. Revenue growth in these markets is driven by the increased use and complexity of wireless communications.

Our antenna portfolio includes Wi-Fi, Bluetooth, Land Mobile Radio (“LMR”), Tetra, Global Navigation Satellite System (“GNSS”), Cellular, Industrial, Scientific, and Medical (“ISM”), Long Range (“LoRa”), and combination antenna solutions. The market applications for our antennas include public safety communications, military communications, utilities & energy, precision agriculture, smart traffic management, Electric Vehicle (“EV”) charging stations, passengers and increased complexity occurringcargo vehicles, forestry machinery & off-road vehicles. For smart traffic management, we provide antenna systems for smart roadways and smart rail. Fleet antennas for public safety, including police vehicles, is a key market. We not only manufacture the antennas, but we also provide engineering design services to determine the layout of multi-antenna installations to minimize potential interference between each antenna element. Our customized solutions often result in these markets. general purpose products with advance capabilities, such as multi-element antenna systems in a single radome. These systems can include several LTE bands, Wi-Fi bands and GPS navigation elements, all in one housing. An antenna designed for one application can be modified to be used for other applications.

Our Industrial IoT device portfolio includes access points, radio modules, sensor communication modules, and wireless communication sensors. The market applications for our Industrial IoT devices include utilities and smart grid, oil and gas, manufacturing, logistics, industrial automation, smart metering, and asset tracking.

Our strategy is to provide a “toolbox” of hardware solutions to our existing OEMs and distributors for Industrial IoT systems. We provide all of the field hardware required for wireless Industrial IoT systems - antennas, are primarily soldruggedized Wi-Fi access points, radio modules, and integrated cellular sensors for Industrial IoT. Our go-to-market strategy for this growing sector is to original equipment manufacturer (“OEM”) providers where they are designed into the customer’s solution.sell more RF hardware components to our customers that traditionally purchase antennas from PCTEL.

Competition

Consistent with our mission to solve complex network engineering problems and to compete effectively in the antenna markets addressed by Connected Solutionsmarket, PCTEL maintains expertise in the following areas: radio frequency engineering, wireless network engineering, mechanical engineering, mobile antenna design, manufacturing, and product quality and testing. Competition among providers of antennas and Industrial IoT devices is fragmented. Competitors include Airgain, Amphenol, Laird, Pulse,Panorama, Taoglas, and Taoglas. We seek out product applications that command a premium for product performance and customer service, and we avoid commodity markets.TE Connectivity.

Test & Measurement Products

PCTEL maintains expertise in several technology areas in order to be competitive in the antenna market.  These include radio frequency engineering, mobile antenna design and manufacturing, mechanical engineering, product quality and testing, and wireless network engineering.

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provides RF Solutions Segment

PCTEL’s RF Solutions segment provides test tools& measurement products that improve the performance of wireless networks globally, with a focus on LTE, public safety, and emerging 5G technologies. Network operators, neutral hosts, and equipment manufacturers rely on our scanning receivers and testing solutions to analyze, design, and optimize their networks. Revenue growth in this market is driven by the implementation and roll out of new wireless technology standards (i.e., 3G to 4G, 4G to 5G) and new market applications for public safety and government. The market applications for our test & measurement equipment includes cellular testing, public safety and private radio network testing, federal government communications testing, and indoor building network testing. Our portfolio includes scanning receivers, scanning receiver software, public safety solutions, automated spectrum monitoring solutions, interference location systems, mmwave transmitters, and a cloud-based reporting platform.

Our scanning receivers are software defined radios used to 1) confirm adequate RF coverage during deployment, 2) identify interfering signals which decrease capacity, 3) troubleshoot system performance issues as networks expand, and 4) benchmark competing networks because our scanning receivers can scan all technologies across all frequencies during one test. They are necessary for initial network deployment and throughout the entire life cycle of the mobile network. Most of our 4G scanners can be upgraded to 5G via firmware. Our new Gflex scanning receiver includes advanced features to address 5G and broader critical communication and government applications such as signal intelligence.

We provide test & measurement equipment to test in-building communication capability which is important for first responders, to certify buildings meet certain in-building wireless communication standards, and to test public safety networks, including P25, Tetra and digital mobile radio (“DMR”).

Our cloud-based reporting platform for public safety is a subscription-based service for test management, storage and analytics that allows stakeholders, including engineering service companies, building owners and government jurisdictions, to easily manage the data collection process and access final reports through an online map-based interface.

Consistent with our mission to solve complex network engineering problems and to compete effectively in the RF test & measurement market, PCTEL maintains expertise in the following areas: radio frequency engineering, digital signal processing (“DSP”) engineering, wireless network engineering, mechanical engineering, manufacturing, and product quality and testing. Competitors for PCTEL’s test &

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Our test equipment& measurement solutions for the cellular market is sold directly to wireless carriers, engineering service providers, and rental companies or to OEMs who integrate our products into their solutions which are then sold to wireless carriers. Our test & measurement solutions for public safety markets is sold to distributors and other engineering service providers.

Competitors

We do not view customer concentration as a significant issue.

Research and Development- Intellectual Property

Given that our mission is to solve complex RF problems for our test tool products include OEMs such as Anritsu, Berkley Varitronics, Digital Receiver Technology,customers, research and Rohde and Schwarz.

PCTEL maintains expertise in several technology areas in order to be competitive in the test tool market. These include radio frequency engineering, digital signal process (“DSP”) engineering, manufacturing, mechanical engineering, product quality and testing, and wireless network engineering.

Discontinued Operations

During the quarter ended June 30, 2017, we approved a plan to sell our Network Engineering Service business (“Engineering Services”) and shift our focus toward research and development driven radio frequency (“RF”) products. On July 31, 2017, we sold substantially all of the assets of our Engineering Services business to Gabe’s Construction Co., Inc. (“Gabe’s”) for a purchase price of $1.45 million in cash. The Engineering Services business provided design, testing, commissioning, optimization, and consulting services for cellular, Wi-Fi and public safety networks, and was a reporting unit within the RF Solutions segment. We classified assets of the Engineering Services reporting unit as held for sale at December 31, 2016 and reported the results of its operations as discontinued operations for the years ended December 31, 2017, 2016, and 2015, respectively. The financial information presented in this Form 10-K has been restated to reflect the historical results of Engineering Services as discontinued operations. See Note 4 in the notes to the financial statements for more information on discontinued operations.

Major Customers

The following table represents the customer that accounted for 10% or more of revenues during the years ended December 31, 2017, 2016 and 2015:

The following table represents customers that accounted for 10% or more of total trade accounts receivable at December 31, 2017 and 2016 are as follows:

International Activities

The following table shows the percentage of revenues by geographic location during the last three fiscal years:

See Note 11 of the consolidated financial statements for further information by geographical location.

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Backlog

Sales of our products are generally made pursuant to standard purchase orders, which are officially acknowledged according to standard terms and conditions.  The backlog is useful for scheduling production but is not necessarily a meaningful indicator of future product revenues as the order to ship cycle is short.

Research and Development

We recognize that a strong technology basedevelopment is essential to our long-term successsuccess. We work closely with our customers, consultants, and we have made amarket research organizations to monitor and predict changes in the

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wireless industry, including emerging industry standards. We continue to make substantial investmentinvestments in engineering, talent, and research and development.  We will continue todevelopment and we devote substantial resources to product development, innovation, and patent submissions.

We have approximately 124 patents and over 51 patents pending in the U.S. and other countries. The patent submissions are primarily for defensive purposes rather than for potential license revenue generation.  We monitor changing customer needs and work closely with our customers, consultants and market research organizations to track changes in the marketplace, including emerging industry standards.

Research and development expenses include costs for hardware and related software development, prototyping, certification and pre-production costs.  We spent approximately $11.1 million, $10.2 million, and $11.2 million in the fiscal years 2017, 2016, and 2015, respectively, in research and development.

Sales, Marketing and Support

We supplyOur marketing strategy is focused on building market awareness and acceptance of new products. Our Global Marketing group is responsible for promotion and lead generation through managing our products to publicwebsite, managing trade shows, social media, webinars and private carriers, wireless infrastructure providers, wireless equipment distributors, value added resellers (“VARs”)general material generation. Our sales function is managed under the Vice President, Global Sales who has primary responsibility for revenue generation and OEMs.oversight of the worldwide sales force. PCTEL’s direct sales force is technologically sophisticated, and sales executives have strong industry domain knowledge. Our customers include OEMs, wireless equipment distributors and rental companies, public and private carriers, wireless infrastructure providers, and value-added resellers (“VARs”). Our direct sales force supports the sales efforts of our distributors and OEM resellers.

Our marketing strategy is focused on building market awareness and acceptance of our new products.  The marketing organization also provides a wide range of programs, materials and events to support the sales organization.  Manufacturing

We spent approximately $12.6 million, $12.7 million, and $13.0 million in fiscal years 2017, 2016, and 2015, respectively, for sales and marketing support.

Manufacturing

We dohave historically done final assembly of most of our antenna productsantennas in-house at our facilities in Tianjin, China, and allBloomingdale, Illinois. To optimize the cost structure of our OEM receiverantennas and interference management product lines.  We also have arrangements with severalreduce our fixed costs in China, we transitioned most of the manufacturing activities from our Tianjin facility to contract manufacturers butin China and elsewhere. This transition was completed during the first quarter 2022. The antennas related to the Smarteq acquisition are notmanufactured at contract manufacturers in Europe and Asia. We do final assembly of all our test & measurement products in-house at our facility in Clarksburg, Maryland.

By transitioning some of our manufacturing to multiple contract manufacturers with a variety of expertise, we avoid becoming dependent on any specific contract manufacturer. If any of our contract manufacturers aremanufacturer is unable to provide timely or satisfactory services for us, our other contract manufacturers arewill be available, although engagingprovided, however, that transitioning production to a newdifferent contract manufacturer could cause delays, disruption and additional costs.costs that could negatively impact timely delivery of our products and our earnings therefrom. We have no material guaranteed supply contracts or long-term agreements with any of our suppliers. Wesuppliers, but we do have open purchase orders with several of our suppliers. SeeAs discussed elsewhere, we have we experienced higher freight and logistics costs and our business has been impacted by increased costs in materials, as well as component part shortages.

Human Capital

Our employees are among our most valuable assets and are critical to our ability to deliver on our strategic plans. Our success in delivering high quality and innovative products and solutions for our customers and driving operational excellence is only achievable through the contractual obligationstalent, expertise, and commercial commitments sectiondedication of Item 7our global team.

We recognize that attracting, developing, and retaining skilled talent and promoting a diverse and inclusive culture are essential to maintaining our leadership positions in the markets we serve. We offer employees competitive compensation and benefits, and resources to continuously improve their skills and performance with the goal of further cultivating the diversity and expertise in our global businesses to fill key positions. We seek to hire people who share our values. We value technology, innovation, and the achievement of customer-driven success. We expect our employees to act with integrity, fairness, and respect. We invest in talent development and recognize that the growth and development of our employees is essential for information on purchase commitments.our continued success.

Employees

AsThe full-time equivalent employees by geography and functional area as of December 31, 2017, we had 484 full-time equivalent employees, consisting of 342 in operations, 56 in research and development, 49 in sales and marketing, and 37 in general and administrative functions.  Total full-time equivalent employees2022 were 430 and 403 at December 31, 2016 and 2015, respectively.  Headcount increased by 54 at December 31, 2017 from December 31, 2016 primarily due to production employees.  None of our employees are represented by a labor union.  We consider employee relations to be good.as follows:

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Available Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports, are available free of charge through our website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the United States Securities and Exchange Commission (the “SEC”).SEC. Our website is located at the following address: www.pctel.com. The information within, or that can be accessed through our website is not part of this Annual Report on Form 10-K. Further, any materials we file with the SEC may be read and copied by the public at the SEC’s Public Reference Room, located at 100 F Street, N.E., Room 1580, Washington D.C. 20549.  Information regarding the operation of the Public Reference Room can be obtained by calling the SEC at 1(800) SEC-0330.  The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding our filings at www.sec.govwww.sec.gov.

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Item 1A: RiskRisk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Form 10-K, including the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our common stock. Our business, financial condition, results of operations, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. If any of the risks actually occur, our business, financial condition, results of operations, and prospects could be adversely affected. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.

Factors That May Affect Our Business, Financial Condition and Future Operations

Risks Related to Our Business

Our business model depends upon our ability to recognize significant emerging technologies in a timely manner and to innovate to solve the engineering problems presented by such emerging technologies.

Our strength is solving complex network engineering problems through our products and solutions.  In order to provide solutions to complex engineering problems, the Company has towe must anticipate which technologies are promising and will be adopted by itsour customers and potential customers, and we need to be engaged early in the development of these new technologies and products. If we expend resources on the wrong technologies or are not included in the development phase of new technologies that are widely adopted in our industry, we may miss the opportunity for meaningful participation or revenue generation. Missed opportunities like these could have a negative impact on the Company’sour long-term competitiveness.

To innovate and solve complex network engineering problems, the Company has to offer highly competitive compensation in order toWe must attract and retain specific types of engineers and other skilled professionals.professionals who are capable of innovating and solving complex network engineering problems in order to be successful. In addition, the Companywe must create intellectual property or license or otherwise obtain it from third parties when necessary. We also must maintain our intellectual property. Failure to accomplish these tasks while managingand manage the costs thereof will result in difficulty in distinguishing our Companyus from itsour competitors and may result in a significant loss of business or diminishing margin on our products.

Mobile operators, who drive demand for our products, may decrease their capital expenditures on their mobile networks.7

Mobile operators engage in a variety of businesses and must allocate their capital expenditure budget across these businesses.  They may limit their capital expenditures allocated to improvement of their network or adoption of new technologies. Our business depends upon their demand for our solutions and products.

Competition within the wireless product industry is intense and could result in decreased margins on our products or loss of key customers. Failure to compete successfully could materially harm our prospects and financial results.

Competition in our industry can result from the following:

Conducting

Our business in foreign countries, in particular China, involves additional financial, operating, and regulatory risks.

A substantial portion of our manufacturing, procurement, research and development, product management, and sales activities isare conducted outside the United States, primarily in China.States. There are a number of risks inherent in doing business in foreign countries, including: (i) fluctuations in the value of the U.S. dollar relative to other currencies, and in particular the impact of a re-valuation of the Chinese Yuan;Yuan, Swedish Krona, and Euro; (ii) impact of tariffs or trade warsother trade-restrictive cost or regulations among the countries in which we do business; (iii) difficulties in repatriation of earnings; (iv) disruption to our supply chain, includingwhether as a result of the spread of COVID-19 or other factors which limit our ability to import materials and export products; (v) nationalist sentiment creating advantages for our competitors in their home countries; (vi) impact of labor unrest;unrest (vii) unexpected legal or regulatory changes, particularly changes to environmental, labor or manufacturing regulations; (vii)(viii) lack of sufficient protection for intellectual property rights; (viii)rights and the risk of theft and forced transfer of intellectual property; (ix) difficulties in recruiting and retaining personnel and managing international operations;(ix) less developed(x) under-developed infrastructure; and (x)(xi) other unfavorable political or economic factors which could include nationalization of the wireless communications or related industries..industries. If we are unable to successfully manage successfully these and other risks pertaining to our international activities, our operating results, cash flows and financial position could be materially and adversely affected.

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Disruption in our manufacturing and supply chains could adversely impact our sales and reputation.

We have limited manufacturing capability.  For some product lines we outsource the manufacturing, assembly, and testing of printed circuit board subsystems.  For other product lines, we purchase completed hardware platforms and add our proprietary software.  While there is no unique capability with these suppliers, any failure by these suppliers to meet delivery commitments would cause us to delay shipments and potentially be unable to accept new orders for product.

In addition, in the event that these suppliers discontinued the manufacture of materials used in our products, we would be forced to incur the time and expense of finding a new supplier or to modify our products in such a way that such materials were not necessary.  Either of these alternatives could result in increased manufacturing costs and increased pricesAll of our products.

We assembleimports from mainland China are subject to U.S. tariffs ranging from 7.5% to 25.0%. The tariffs apply to the antennas sent from our antenna products in our facilities located in Illinois and China and scanning receivers at our facility in Maryland.  We may experience delays, disruptions, capacity constraints or quality control problems at our assembly facilities, which could result in lower yields or delays of product shipmentsChina-based contract manufacturers to our customers.  In addition, a number ofU.S.-based customers and components and materials sent from our antenna products are manufactured in China viaChina-based contract manufacturers.  Any disruption ofmanufacturers to our own or contract manufacturers' operations could cause us to delay product shipments, which would negativelyBloomingdale, Illinois facility for final assembly. Tariffs impact our sales, competitive reputation and position.  In addition, if we do not accurately forecast demand for our products, we will have excess or insufficient parts to build our products, either of which could materially affect our operating results.

In summary, in order to be successful, the Company must manage its operations to limit the cost of product production, accurately forecast demand for its products, avoid excess production and inventory that results in waste or obsolescence, dual source critical materials to avoid shortages and delays in shipping, build for manufacturability and avoid excessive quality issues.

Future acquisitions and investments may not yield their intended benefits.  Our failure to successfully integrate acquisitions into our existing operations could adversely affect our business. We may in the future make acquisitions of, or large investments in, businesses that offer products, and technologiesgross margin that we believe would complement our products, including wireless products and technology.  We may also make acquisitions of or investments in, businesses that we believe could expand our distribution channels.  Even if we were to announce an acquisition, we may not be able to complete it.  Additionally, any future acquisition or substantial investment would present numerous risks, including:

We expect that future acquisitions may be paid in cash, shares of our common stock, or a combination of cash and our common stock.  If consideration for a transaction is paid in common stock, this would further dilute our existing stockholders. We may also incur debt to pay for an acquisition which could impose restrictive covenantsearn on how we conduct our business.

Our gross profit may vary based on the mix of sales of our products and these variations may causebecause we have not been able to adjust all our net income to decline.

Dependingprices on the mixaffected products to cover the entire cost of the imposed tariffs. We will continue to monitor and adjust prices as market conditions permit. The impact of the tariffs on our products sold,future revenue and profitability is uncertain.

Disruptions in the worldwide economy may adversely affect our gross profit could vary significantly from quarter to quarter.  Generally, antenna productsbusiness, results of operations and financial condition.

Adverse and uncertain economic conditions in the U.S. and other countries, including inflation, higher interest rates, economic weakness, and potential recession, may have an adverse effect on our operating results, cash flows and financial position. Economic conditions can be negatively impacted by market cycles, as well as by a lower profit margin than scanning receiver products, creatingvariety of factors such as the variance in gross profitsspread or fear of spread of contagious diseases (such as COVID-19), man-made or natural disasters (including events related to profit mix.  A declineclimate change), severe weather, actual or threatened hostilities or war (such as ongoing conflict between Russia and Ukraine), terrorist activity, political unrest, civil strife and other geopolitical uncertainty. In connection with ongoing conflict between Russia and Ukraine, governments in our gross profitthe U.S., the U.K. and the E.U. have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia, Belarus, and certain parts of Ukraine. The current sanctions as well as any further escalation of geopolitical tensions, including potential destabilizing effects that the war in Ukraine may pose for the European continent or the global oil and natural gas markets, could have a negative impactmaterial adverse impacts on the markets where we do business, which could, in turn, adversely affect our financial results and causebusiness and/or our net income to decline.supply chain.

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Any delays in our sales cycles could result in customers canceling purchases of our products.

Sales cycles for our products with major customers can be lengthy, often lasting nine months or longer. In addition, it can take an additional nine months or more before a customer commencesrequires volume production of equipment that incorporates our products. Sales cycles with our major customers are lengthy for a number ofseveral reasons, including:

A significant portion of our operating expenses is relatively fixed and is largely based on our forecasts of volume and timing of orders. The lengthy sales cycles make forecasting the volume and timing of product orders difficult. In addition, the delays inherent in lengthy sales cycles raise additional uncertainty that customers may decide to cancel or change product phases. If customer cancellations or product changes were to occur, this could result in the loss of anticipated sales without sufficientenough time for us to reduce our operating expenses.

Disruptions in our manufacturing and supply chains could adversely impact our sales and reputation.

We have limited in-house manufacturing capability. We assemble antennas in our facility in Bloomingdale, Illinois and a significant portion of our antennas are manufactured by contract manufacturers in China and elsewhere. We do final assembly of our test & measurement products at our Clarksburg, Maryland facility, where we also add our proprietary software to the completed hardware platforms we design and have manufactured to our specifications. We may experience delays, disruptions, or capacity constraints or quality control problems at our assembly facilities, which could result in lower yields or delays of product shipments to our customers. Any disruption of our own or contract manufacturers' operations could cause delayed product delivery, which could negatively impact our sales, competitive reputation, and position. Moreover, if we do not accurately forecast demand for our products, we will have excess or insufficient parts to build our products, either of which could materially affect our operating results and may lead to obsolete inventory.

During 2022 our operations were impacted by global shortages of key electronic components for our products, and we have experienced long-lead times due to freight congestion and delays. We have increased inventory levels to limit the negative impact of component shortages and long-lead times. However, the impact of cost inflation, as well as, supplier component input availability may continue or worsen in 2023, and ultimately may have an adverse impact on our results of operations, financial condition and stock price.

In addition, if for any reason our suppliers discontinue manufacturing materials used in our products, we would be forced to incur the time and expense of finding a new supplier or to modify our products in such a way that such materials were not necessary. Either of these alternatives could result in increased manufacturing costs which we may not be able to pass along to our customers in increased prices.

In summary, in order to be successful, we must manage our operations to limit the cost of product production, accurately forecast demand for our products, avoid excess production and inventory that results in waste or obsolescence, dual source critical materials to avoid shortages and delays in shipping, build for manufacturability and avoid excessive quality issues.

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The COVID-19 pandemic has adversely impacted, and poses risks to, our business, the nature and extent of which are highly uncertain and unpredictable.

The COVID-19 pandemic resulted in a global health crisis that has adversely affected global economies, financial markets, and businesses and also caused disruption in both supply and demand for our products. Many components were difficult to obtain or were discontinued by the manufacturers resulting in manufacturing delays and necessitating a redesign of several of our products. We also experienced higher freight and logistics costs and our business has been impacted by increased costs in materials, as well as component part shortages. Although we have seen improvements, cost increases and logistics and supply chain constraints may persist or worsen in 2023, and ultimately may have an adverse impact on our results of operations and financial condition.

Shutdowns of companies and facilities as well as economic and budgetary uncertainties negatively impacted demand. While spread of the pandemic has slowed and certain of the challenges have abated, the extent to which our operations may be impacted by the COVID-19 pandemic going forward will depend on future developments that are highly uncertain, including the level of spread and emergence of variants and actions by governments and private enterprises to address such matters.

As the pandemic continues, we may experience additional adverse impacts on our operational and commercial activities, including rising costs, volatility in customer orders and purchases and inability to procure components and deliver finished products on time, which may be material. Furthermore, the pandemic has impacted, and may further impact, the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates and interest rates. Due to the continuing uncertainties surrounding the pandemic, we are unable to predict the ultimate impact that it will have on our financial position, operating results and cash flows in future periods.

Future acquisitions, business combinations, and investments may not yield their intended benefits and our failure to successfully integrate acquisitions into our existing operations could adversely affect our business.

Wemay make acquisitions of or make large investments in, businesses that offer products and technologies that we believe would complement our products, including wireless products and technology. We may also acquire or invest in businesses that we believe could expand our distribution channels. Even if we were to announce an acquisition, we may not be able to complete it. Additionally, any future acquisition or substantial investment would present numerous risks, including:

We expect that future acquisitions may be paid in cash, shares of our common stock, or a combination of cash and our common stock. If consideration for a transaction is paid in common stock, this would further dilute our existing stockholders. We may also incur debt to pay for an acquisition which could impose restrictive covenants on how we conduct our business. In connection with any future acquisitions, including those acquisitions that we do not complete, we may incur significant transaction costs. We are required to expense such as transaction costs are incurred, which may have a material adverse impact on our financial results.

A failure in our information technology systems could negatively impact our business.

We rely on information technology to record and process transactions, manage our business, and maintain the financial accuracy of our records. Our computer systems are subject to damage or interruption from various sources, including power outages, computer and telecommunications failures, computer viruses, security breaches, vandalism, catastrophic events, and human error. If a cyber-incident,

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such as a phishing or ransomware attack, virus, malware installation, server malfunction, software or hardware failure, impairment of data integrity, loss of data or other computer assets, adware or other similar issue, impairs or shuts down one or more of our computing systems or our information technology network, or the systems or networks of our third-party services providers, we may be subject to negative treatment and lawsuits. In addition, attention to remediating cyber incidents may distract our technical or management personnel from their normal responsibilities. Public announcements of such cyber incidents could occur, and negative perception of such cyber incidents could adversely affect the price of our common stock, and we could lose sales and customers. Interruptions of our computer systems could disrupt our business and could result in the loss of business and cause us to incur additional expense.

InformationWe, our customers and our third-party service providers face an evolving threat landscape in which cybercriminals, among others, employ a complex array of cyber-attack techniques designed to access sensitive information or disrupt our operations, including, for example, the use of fraudulent or stolen access credentials, malware, ransomware, phishing, denial of service and other types of attacks. While we have engaged experts in cybersecurity to advise us and we have taken protective measures, our information technology security threats are increasing in frequency and sophistication. Our information technology systems or those of our third-party service providers could be breached by unauthorized outside parties or misused by employees or other insidersinsiders’ intent on extracting sensitive information, corrupting information, or disrupting business processes. Such unauthorized access or misuse could compromise confidential information, disrupt our business, harm our reputation, result in the loss of assets, customer confidence and business and have a negative impact on our financial results.

Additional income tax expense or exposure to additional income tax liabilities could have a negative impact on our financial results.

We are subject to income tax laws and regulations in the United States, China, Sweden and various other foreign jurisdictions. Significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Our income tax liabilities are dependent upon the location of earnings among these different jurisdictions. Our income tax provision and income tax liabilities could be adversely affected by the jurisdictional mix of earnings, changes in valuation of deferred tax assets and liabilities and changes in tax laws and regulations. In the ordinary course of our business, we are also subject to continuous examinations of our income tax returns by tax authorities. Although we believe our tax estimates are reasonable, the final results of any tax examination or related litigation could be materially different from our related historical income tax provisions and accruals. Adverse developments in an audit, examination, litigation related to previously filed tax returns, or in the relevant jurisdiction’s tax laws, regulations, administrative practices, principles, and interpretations could have a material effect on our results of operations and cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods.

Federal income tax reformLegislative or regulatory initiatives related to climate change concerns and other environmental, social and governance initiatives may negatively affect our business.

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Concern over climate change may result in new or additional legal, legislative, and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could have unforeseen effectsadversely affect our business. There is increasing societal pressure to limit greenhouse gas emissions. Initiatives, including the Paris Climate Accord, could result in future legislation, regulatory measures or policy changes that would increase expenses and taxes and require operational changes and substantial capital expenditures.

In addition, continuing political and social attention to other environmental, social and governance ("ESG") and sustainability issues has resulted in both existing and pending international agreements and national, regional and local legislation, regulatory measures, reporting obligations and policy changes. Moreover, there is increased focus by investors, customers, and other stakeholders on ESG and sustainability matters, including the use of plastic, energy, waste, and worker safety. Our reputation could be damaged if we do not (or are perceived not to) act responsibly with respect to sustainability matters, which could adversely affect our business, results of operations, financial position and cash flows.

Any or all of these ESG and sustainability initiatives may result in significant operational changes and expenditures, cause us reputational harm, and could materially adversely affect our business, financial condition, and results of operations.

On December 22, 2017, the PresidentPhysical risks of the United States signed into law the Tax Cutsclimate change (such as natural disasters, extreme weather conditions or rising sea levels) may impact operations at our and Jobs Act. The Company is in the process of determining the impact to the financial statements of all aspects of the Act and will reflect the impact of such reform in the financial statements during the period in which such amounts can be reasonably estimated. The Act includes a number of provisions, including the lowering of the U.S. corporate tax rate from 35 percent to 21 percent, effective January 1, 2018, which will result in a blended federal tax rate for fiscal year 2018. There are also provisions that may partially offset the benefit of such rate reduction, such as the repeal of the deduction for domestic production activities. The Act also includes international provisions, which generally establish a territorial-style system for taxing foreign-source income of domestic multinational corporations. Financial statement impacts will include adjustments for the re-measurement of deferred tax assets (liabilities)our supplier's facilities and the accrual for deemed repatriation tax on unremitted foreign earningsavailability and profits. While there are benefits, there iscost of components, transportation and energy. Such risks could also substantial uncertainty regarding the details of the Act. The intendedincrease insurance and unintended consequences of the Act on our business and on holders of our common shares is uncertain and could be adverse. The Company anticipates that the impact of the Act may be material to the income tax expense in our consolidated financial statements.other operating costs.

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Risks Related to our Common StockStock.

The trading price of our stock price may be volatilefluctuates, sometimes significantly, based onupon a numbervariety of factors, many of which are not under our control.

OurOver time, our stock can experienceexperiences significant changes in price on a percentage basis. The closing price of our common stock on the NASDAQNasdaq Global Select Market fluctuated between a high of $8.18$5.60 and a low of $5.18 in 2017.  Our stock price can be subject to wide fluctuations in response to a$3.99 during 2022. A variety of factors, many of which are outnot under of our control influence our stock price, including:

In addition, these fluctuations often have been unrelated or disproportionate to the operating performance of the Company.

Provisions in our charter documents may inhibit a change of control or a change of management, which may cause the market price for our common stock to decline and may inhibit a takeover or change in our control that a stockholder may consider favorable.

Provisions in our charter documents could discourage potential acquisition proposals and could delay or prevent a change in control transaction that our stockholders may favor. Specifically, our charter documents do not permit stockholders to act by written consent, do not permit stockholders to call a stockholders meeting, and provide for a classified board of directors, which means stockholders can only elect, or remove, a limited number of our directors in any given year. These provisions could have the effect of discouraging others from making tender offers for our shares, and as a result, these provisions may prevent the market price of our common stock from reflecting the effects of actual or rumored takeover attempts and may prevent stockholders from reselling their shares at or above the price at which they purchased their shares. These provisions may also prevent changes in our management that our stockholders may favor.

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Our board of directors has the authority to issue up to 5,000,000 shares of preferred stock in one or more series. The board of directors can fix the price, rights, preferences, privileges, and restrictions of this preferred stock without any further vote or action by our stockholders. The rights of the holders of our common stock will be affected by, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. Further, the issuance of shares of preferred stock may delay or prevent a change in control transaction without further action by our stockholders. As a result, the market price of our common stock may decline.

If we are unable to successfully maintain processes and procedures required by the Sarbanes-Oxley Act of 2002 to achieve and maintain effective internal control over our financial reporting, our ability to provide reliable and timely financial reports could be harmed and our stock price could be adversely affected.

We must comply with the rules promulgated under Section 404 of the Sarbanes-Oxley Act of 2002.  Section 404 requires an annual management report assessing the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm addressing this assessment.

While we are expending significant resources in maintaining the necessary documentation and testing procedures required by Section 404, we cannot be certain that the actions we are taking to achieve and maintain our internal control over financial reporting will be adequate.  If the processes and procedures that we implement for our internal control over financial reporting are inadequate, our ability to provide reliable and timely financial reports, and consequently our business and operating results, could be harmed.  This in turn could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial reports, which could cause the market price of our common stock to decline.

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Item 1B: UnresolvedUnresolved Staff Comments

None.

Item 2: Properties

The following table lists our main ongoing facilities:

Facility Overview and Changes

Facility ChangesThe Bloomingdale, Illinois facility is used for our corporate headquarters and for antenna manufacturing, engineering, and product management. The Clarksburg facility is used for assembly, engineering, and product management for test & measurement products. Our Akron, Ohio office is used for product development and engineering for antennas and Industrial IoT devices.

Until January 2022, we manufactured antennas at a leased facility in Tianjin, China. We initiated a restructuring plan in 2019 to transition manufacturing from our Tianjin, China facility to contract manufacturers in China and to our Bloomingdale, Illinois facility due to uncertainties with our Tianjin facility lease and also to optimize the cost structure of the antenna product line and create flexibility in antenna manufacturing. The lease for the Tianjin, China facility expired on October 8, 2020 without extension. On October 16, 2020, the Wang Zhuang Village Committee issued a notice informing PCTEL Tianjin that the Chinese Party Central Committee and the State Council were accelerating the layout optimization and transformation of the industrial park in which the leased premises is located, and accordingly leases and lease extensions for all premises in the industrial park were suspended. Although the lease was not renewed, we were able to continue to occupy the Tianjin manufacturing facility. However, due to the uncertainty regarding the Tianjin lease renewal, we accelerated our plan to transition all manufacturing in Tianjin to contract manufacturers. In August 2017,November 2021, we entered into a new seven-yeartwo-year lease ending December 31, 2023 for 5,9771,694 square feet of office space in Akron, OhioTianjin, China for a small team of employees associated with sourcing, quality, and local customer support and recognized a present value of the right of use asset of $0.1 million for this new office lease. We completed the transition of antenna product development. The total lease obligation pursuantmanufacturing from our Tianjin, China facility to contract manufacturers and our Bloomingdale, Illinois facility during the first quarter of 2022 and, in April 2022, vacated the manufacturing facility and moved to the agreement was $0.7 million.  We assumed occupancy ofnew leased facility in Tianjin, China.

As a cost saving initiative, we terminated all 14 employees from our Beijing office in November 2021 and closed this office in March 2018.

the first quarter of 2022. In April 2017, we renewed the first-floor space of the Tianjin facility for 22,120 square feet of leased space. The total lease obligation pursuant to the agreement is $46 annually and expires on April 11, 2018. This lease will be renewed during the second quarter 2018.  We expect the lease term to be extended to the same date as the other facility lease in Tianjin.

In June 2016,2022, we entered into a two-year office lease ending April 30, 2024. Two former employees in Beijing are engaged through a third-party employment agency and provide sales and technical support from this new four-yearsmaller office.

As part of the acquisition of Smarteq on April 30, 2021, we assumed an office lease and two automotive leases. The office in Kista, Sweden has 4,080 square feet used for our Beijing Design Center,engineering, sales, and in January 2017 we signedadministration with a new lease for additional space atterm ending July 31, 2023. On the same location. With the expansion,acquisition date, the Company has 11,270 square feet in its Beijing Design Center. The total lease obligation for the Beijing Design Center isrecorded $0.2 million annually. The Beijing Design Center has an engineering department for antenna development as well as saleseach of the ROU assets and marketing for the China market.

Duringlease liabilities. In October 2022, the first quarter 2016, we vacated our Colorado office lease in order to consolidate facility space related to our Engineering Services reporting unit. In May 2017, was extended for 36 months ending July 31, 2026 and we recorded a $0.2 million adjustment for each of the Company signed a sublease with a term throughROU assets and the lease termination date.  The lease expires on October 31, 2020.  See Note 6 in the notes to the financial statements for more information on the Colorado lease.liabilities.

All properties are in good condition and are suitable for the purposes for which they are used. We believe that we have adequate space for our current needs.

Item 3: Legal Proceedings

We aremay, from time to time, be the subject of various pending or threatened legal actions in the ordinary course of our business. All such matters are subject to many uncertainties and outcomes that are not predictable with assurance. InTo our opinion,knowledge, as of December 31, 2017,

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2022, there were no claims or litigation pending against the Company that would be reasonably likely to have a material adverse effect on our consolidated financial position, results of operations or liquidity.

Item 4: Mine Safety Disclosures

Not applicable.

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PART II

Item 5: Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Price Range of Common Stock and DividendsMarket Information

PCTEL’s common stock has been traded on the NASDAQNasdaq Global Select Market under the symbol PCTI since our initial public offering on October 19, 1999. The following table shows the high and low closing prices of our common stock as reported by the NASDAQ Global Select Market for the periods indicated and the frequency and amounts of dividends declared on PCTEL’s common stock during those periods.

The closing sale price of our common stock as reported on the NASDAQ Global Select Market on March 15, 2018 was $6.90 per share.  As of that dateFebruary 28, 2023, there were 3630 holders of record of theour common stock. A substantially greater number of holders of theour common stock are in “street name” or beneficial holders, whose shares are held of record by banks, brokers, and other financial institutions.

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Five-Year Cumulative Total Return Comparison

The following graph compares the annual percentage changeWe historically have paid a quarterly cash dividend on our common stock. We currently expect that comparable cash dividends will continue to be paid in the cumulative returnfuture. However, no assurances can be given that any dividends will be declared or paid on our common stock in the future, or, if declared and paid, the amount or frequency of those dividends. Our ability to our stockholders with the cumulative return of the NASDAQ Composite Indexpay dividends is restricted by certain laws and regulations, and the S&P Information Technology Index forpayment of dividends is within the period beginning December 31, 2012 and ending December 31, 2017.  Returns for the indices are weighted based on market capitalization at the beginningdiscretion of each measurement point.  Note that historic stock price performance is not necessarily indicativeour board of future stock price performance.directors.

Sales of Unregistered Equity Securities

None.

Issuer Purchases of Equity Securities

All share repurchase programs are authorized by our Board of Directors and are announced publicly.  publicly announced. Such purchases may be made from time to time at predetermined prices in the open market, by block purchases, in private transactions or otherwise. Repurchases are funded from cash on hand.

On April 20, 2015, ourNovember 4, 2020, the Board of Directors authorized an additionalapproved a share repurchase program for share repurchases up to $5.0 million of 500,000common stock through the end of 2021 (“2020 Repurchase Plan”). The 2020 Repurchase Plan became effective November 10, 2020 and was completed in September 2021. We did not repurchase any shares of common stock under an existing share repurchase program.  Additionally, on August 10, 2015, our Board of Directors authorized repurchase of an additional 1,300,000 shares under the existing share repurchase programs, for a total of 2,726,000 shares.  Under these repurchase programs, we repurchased 1,942,788 shares at an average price of $6.22 during the year ended December 31, 2015 and we repurchased 783,212 shares at an average price of $5.23 during the year ended December 31, 2016.  At December 31, 2017, the Company had no shares remaining that could be repurchased under previously approved programs.2022.

Item 6: Selected Consolidated Financial DataReserved

The following selected consolidated financial data should be read in conjunction with "Management's

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Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations" the Consolidated Financial Statements and related notes and other financial information appearing elsewhere in this Annual Report on Form 10-K.  The statement of operations data for the years ended

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December 31, 2017, 2016, and 2015 and the balance sheet data as of December 31, 2017 and 2016 are derived from audited financial statements included elsewhere in this Annual Report on Form 10-K.  The statement of operations data for the years ended December 31, 2014 and 2013 and the balance sheet data as of December 31, 2015, 2014, and 2013 are derived from audited financial statements not included in this Annual Report on Form 10-K.

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Item 7:  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following commentary presents a discussion and analysis of the Company’s financial condition and results of operations by its management. TheThis review highlights the principal factors affecting earnings and the significant changes in balance sheet items for the years 20172022 and 2016.2021. Financial information for prior years2021 is presented when appropriate.in the Company’s Form 10-K for the fiscal year ended December 31, 2021, which the Company filed with the SEC on March 15, 2022. The objective of this financial review is to enhance investor understanding of the accompanying tables and charts, the consolidated financial statements, notes to financial statements, and financial statistics appearing elsewhere in this Annual Report on Form 10-K. Where applicable, this discussion also reflects management’s insights with respect to known events and trends that have or may reasonably be expected to have a material effect on the Company’s operations and financial condition.

Introduction

PCTEL operatesYou should read this discussion of the Company’s financial condition and results of operations in two segments for reporting purposes, Connected Solutionsconjunction with, and RF Solutions.  Our chief operating decision maker uses operating profitswe qualify our discussion in its entirety by, the consolidated financial statements and identified assets fornotes thereto included elsewhere within this annual report, the Connected Solutionsmaterial contained under Part 1, Item 1. “Description of Business” and RF Solutions segments for resource allocations.  Each segment has its own segment manager as well as its own engineering, business development, salesPart I, Item 1A. “Risk Factors” of this annual report, and marketing, and operational general and administrative functions.  All of our accounting and finance, human resources, IT and legal functions are provided on a centralized basis through the corporate function. We manage our balance sheet and cash flows centrallycautionary disclosure about forward-looking statements at the corporate level, with the exceptionfront of trade accounts receivablePart I of this annual report.

Introduction

PCTEL is a leading global provider of wireless technology, including purpose-built Industrial IoT devices, antenna systems, and inventory which is managed at the segment level. Each of the segment managers reportstest & measurement solutions. We strive to solve complex wireless challenges to help organizations stay connected, transform, and maintains regular contact with the chief operating decision maker to discuss operating activities, financial results, forecasts, or plans for the segment.

grow. We have two businesses (antennas/Industrial IoT devices and test & measurement products). Our 2017 revenues increased by $6.4 million (7.6%), compared to 2016 because revenues increased 18.5% for RF Solutionsantennas and 4.3% for Connected Solutions.  We recorded operating income of $1.4 million in 2017, compared to an operating loss of $1.1 million in 2016 as the gross margin impact of higher revenues offset higher operating expenses. The increase in operating expenses during 2017 includes research and development investments for Connected Solutions and expenses for our short-term incentive plan.  

Connected Solutions Segment

PCTEL’s Connected Solutions segment designs and manufactures precision antennas. PCTELIndustrial IoT devices include antennas are deployed primarily in small cells, enterprise Wi-Fi access points, fleet management and transit systems, and in network equipment and devices for the Industrial Internet of Things (“IIoT”).IoT. We offer in-house design, testing, radio integration, and manufacturing capabilities forbelieve that our antenna customers.  Revenue growth in these markets is driven by the increased use of wireless communications and increased complexity trends occurring in these markets. PCTEL antennas are primarily sold to original equipment manufacturer (“OEM”) providers where they are designed into the customer’s solution.

Competition in the antenna markets addressed the Connected Solutions segment is fragmented. Competitors include Airgain, Amphenol, Laird, Pulse, and Taoglas.  We seek out product applications that command a premium for product performance and customer service and we avoid commodity markets.

PCTEL maintains expertise in several technology areas in order to be competitive in the antenna market.  These include radio frequency engineering, mobile antenna design and manufacturing, mechanical engineering, product quality and testing, and wireless network engineering.

RF Solutions Segment

PCTEL’s RF Solutions segment provides test tools that& measurement products improve the performance of wireless networks globally with a focus on LTE, public safety, and emerging 5G technologies.  Networkglobally. Mobile operators, neutral hosts, and network equipment manufacturers rely on our scanning receivers and testing solutionsproducts to analyze, design, and optimize theirnext generation wireless networks. Revenue growth is driven

COVID-19

The COVID-19 outbreak and associated counter-acting measures implemented by governments and businesses around the implementation and roll out of new wireless technology standards (i.e. 3G to 4G, 4G to 5G). PCTEL test equipment is sold directly to wireless carriers or to OEM providers who integrate our products into their solutions which are then sold to wireless carriers.

Competitors for PCTEL’s test tool products include OEMs suchworld, as Anritsu, Berkley Varitronics, Digital Receiver Technology, and Rohde and Schwarz.

PCTEL maintains expertisewell as subsequent recovery in several technology areas in order to be competitiveglobal business activity, have increased uncertainty in the test tool market. These include radio frequency engineering, digital signal processing (“DSP”) engineering, manufacturing, mechanical engineering, product qualityglobal business environment and testing,led to supply chain disruptions and wireless network engineering.shortages in global markets for commodities, logistics and labor, as well as input cost inflation.

During the quarter ended June 30, 2017, we approved a plan

Activity in most of the end markets we serve has improved since 2020. However, in 2022 we continue to sell our Network Engineering Service business (“Engineering Services”) and shift our focus toward research and development driven radio frequency (“RF”) products. On July 31, 2017, we soldface material cost inflation, labor availability issues and logistics costs increases. Some of our businesses have also been impacted by supplier component input availability issues. While we have seen some decreases in logistics and input costs, the public health situation, continued global response measures and corresponding impacts on various markets remain fluid and uncertain and may lead to sudden changes in our outlook.

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substantiallyalloftheassetsofourEngineeringServicesbusinesstoGabe’sConstructionCo.,Inc.(“Gabe’s”) for a purchase price of $1.45 million.The EngineeringServices business provideddesign,testing, commissioning, optimization, andconsulting services for cellular, Wi-Fi and publicsafetynetworkswasareportingunitwithintheRFSolutionssegment.WeclassifiedassetsoftheEngineeringServices reportingunitasheldforsaleatDecember31, 2016 and reportedthe resultsofits operations asdiscontinued operations forthe yearsendedDecember31,2017, 2016, and 2015, respectively.Thefinancialinformationpresentedinthis Form 10-K hasbeenrestatedto reflectthehistoricalresultsofEngineeringServicesasdiscontinuedoperations.SeeNote4inthenotestothefinancialstatementsfor moreinformationondiscontinuedoperations.

Results of Operations for Continuing OperationsFinancial Summary

Years ended December 31, 2017, 2016, and 2015

(All amounts in tables, other than percentages, are in thousands)

REVENUES BY SEGMENT

Revenues were approximately $91.4$99.4 million for the year ended December 31, 2017,2022, an increase of 7.6%13.2% from the prior year. RevenuesBy product line, revenues increased by $3.6$6.6 million (18.5%(10.5%) to $69.7 million for the RF Solutions segmentantennas & Industrial IoT devices and increased by $4.9 million (18.9%) to $30.6 million for test & measurement products. Gross profits of $45.7 million were higher by $5.3 million due to the additionimpact of new OEM partnershigher revenues. The gross profit percentage decreased by 0.1% in 2022 as a higher mix of test & measurement products was offset by a lower gross profit percentage for test & measurement products. Operating expenses were $43.7 million in 2022 and increased demandby $3.4 million with higher expenses for incentive compensation, stock compensation, and restructuring activities. Other income increased by $0.5 million as interest income increased by $0.2 million and a net improvement of $0.3 million from U.S. operators.  foreign exchange activity. The net impact of these changes resulted in income before tax of $2.5 million in 2022 compared to income before tax of $0.2 million in 2021.

REVENUES BY PRODUCT LINE