RISKS RELATED TO OUR BUSINESS AND INDUSTRY

Our ability to continue as a going concern will depend on us being able to raise significant additional capital to fund our operations, which may be unavailable on attractive terms, if at all, and could dilute your investment.

Our recurring operating losses and our current operating plans raise substantial doubt about our ability to continue as a going concern for the next twelve months.  Our independent registered public accounting firm issued their audit report on our consolidated financial statements for the years ended December 31, 2022 and 2021, which included an explanatory paragraph as to our ability to continue as a going concern.  While we believe that our existing cash and cash equivalents will be sufficient to fund our current operating plans through the second quarter of 2023, we have based these estimates on assumptions that may prove to be wrong, and we could spend our available financial resources much faster than we currently expect and need to raise additional funds sooner than we anticipate.

Our ability to continue as a going concern will depend on us being able to raise additional capital and/or secure additional loans to fund our operations and achieve our business objectives.  Our cash balance stood at $4.3 million on December 31, 2022; however, we have recorded a net loss of $12.0 million for the year ended December 31, 2022, or approximately $1.0 million per month.  On February 28, 2023, we completed a private placement offering, raising gross proceeds of $9.2 million, including $5.0 million in an initial closing in late December 2022 and $4.2 million in January and February 2023.

Potentially, we could draw down additional funds under our existing loan facility with Spectrum Commercial Services Company, L.L.C. (“Spectrum”) (the “Spectrum Loan Facility”); however, our ability to do so is dependent upon the value of eligible accounts receivable assigned to Spectrum as security for advances under the Spectrum Loan Facility, which value fluctuates from time to time and is ultimately outside of our control.  We anticipate seeking permission from Salem Investment Partners V, Limited Partnership (“Salem”) to draw down up to an additional $3.0 million of our $8.0 million loan facility; however, Salem has the discretion to, and may, decline our request.  We are also pursuing additional funding opportunities, including planning for a further capital raise in the second quarter of 2023 in connection with our planned uplisting to the Nasdaq Capital Market or another national securities exchange.  The ongoing inflationary economic environment and related capital market effects caused by the lingering effects of the COVID-19 pandemic, including its impact on the supply chain, cannot be predicted with certainty and may make it more difficult or preclude us from raising additional capital, increase our costs of capital and otherwise adversely affect our business, results of operations, financial condition, and liquidity.  If we are unable to secure additional capital and/or loans when needed or on acceptable terms, we may not be able to do certain things, including but not limited to:

Our failure to do any of the aforementioned things could harm our business, financial condition and results of operations.  Ultimately, if we do not secure additional financing in a timely manner, we will be unable to fund ongoing operations and pay our obligations as they become due, affecting our ability to continue as a going concern.

We have incurred significant losses in the past and will likely experience losses in the future.

We have incurred significant losses in the past and recorded a net loss of $2.0$12.0 million for the year ended December 31, 2020,2022, and $921 thousand and $1.564$2.8 million for the nine monthsyear ended September 30, 2021, and September 30, 2020, respectively.December 31, 2021.  As of December 31, 2020,2022, we had an accumulated deficit of $12.2$27.1 million and $13.1$15.0 million at September 30,December 31, 2021. Our business and stock price may be adversely affected if we cannot consistentlymake consistent progress toward future profitability.

Our ability to be profitable in the future depends upon continued demand for our products from existing and new customers. Further salesFurthermore, further adoption of our products dependdepends upon our ability to sustainimprove the quality of our products, research and develop new products, and sustain and enhance customer satisfaction.products. In addition, our profitability will be affected by, among other things, our ability to execute on our business strategy, the timing and size of customer orders, the pricing and costs of our products, competitive offerings, macroeconomic conditions affecting the semiconductor industry, the COVID-19 pandemic, and the extent to which we invest in sales and marketing, research and development, and general and administrative resources.

Impact

Our ability to realize our deferred tax asset and deduct certain future losses could be limited if we experience an ownership change as defined in the U.S. Internal Revenue Code of COVID-191986, as amended(the “Code”).

Under the Code, a corporation is generally allowed a deduction for net operating losses (“NOLs”) carried over from prior taxable years.  As of December 31, 2022, we had approximately $28.9 million of gross federal and State NOLs and $0.6 million of other carryforwards available to reduce future federal taxable income.  Our ability to use our NOLs and other carryforwards will depend on our Business

The ultimate impactthe amount of taxable income generated in future periods.  A corporation’s ability to deduct its federal NOL carryforwards and to utilize certain other available tax attributes can be substantially constrained under the general annual limitation rules of Section 382 of the COVID-19 pandemicCode if it undergoes an “ownership change” as defined in Section 382 (generally, where cumulative stock ownership changes among material stockholders exceed 50% during a rolling three-year period).  Accordingly, if the Company were to undergo an "ownership change", our ability to utilize our NOLs and other carryforwards would be limited, and this could have a material effect on our business, financial condition, and results of operations.  The relevant calculations for Section 382 are technical and highly complex.  Whether an “ownership change” occurs is unknown. However, beginninglargely outside of our control, and there can be no assurance that such a change will not occur in the second quarter of 2020, we observed delays, declining demand, and price fluctuationsfuture.  If an “ownership change” occurs in the semiconductor industry. We also observedfuture it is possible that the limitations imposed could cause a substantial reductionnet increase in our automotive business.federal income tax liability and cause federal income taxes to be paid earlier than if such limitations were not in effect.  An ownership change could also eliminate a portion of the federal tax loss carryforward if the limitation is low and causes our NOLs to expire unutilized.  Any such “ownership change” could have a material adverse effect on our future business, results of operations, financial condition, and the value of our Common Stock.

Market and economic conditions may negatively impact our business, financial condition, and share price.

Concerns over inflation, energy costs, geopolitical issues, the U.S. mortgage market and a declining real estate market, unstable global credit markets and financial conditions, and volatile oil prices have led to periods of significant economic instability, diminished liquidity and credit availability, declines in consumer confidence and discretionary spending, diminished expectations for the global economy and expectations of slower global economic growth going forward, and increased credit defaults.  Our general business strategy may be adversely affected by any such economic downturns, volatile business environments and continued unstable or unpredictable economic and market conditions.  If these conditions continue to deteriorate or do not improve, it may make any necessary debt or equity financing more difficult to complete, more costly, and more dilutive.  Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance, and share price and could require us to delay or abandon development or commercialization plans.

We have identified a material weakness in our internal control over financial reporting.We had previously identified other material weaknesses that have since been remediated.The outstanding material weakness, or a reoccurrence of those recently remediated material weaknesses, could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. generally accepted accounting principles (“GAAP”).  Our management is likewise required, on a quarterly basis, to evaluate the effectiveness of our internal controls and to disclose any changes and material weaknesses identified through such evaluation in those internal controls.  A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

As described elsewhere in this prospectus, we have identified a material weakness in our internal control over financial reporting related to our accounting policy and documentation of management's contemplation of the accounting treatment over leases and significant unusual transactions. As a result of this material weakness, our management concluded that our internal control over financial reporting was ineffective as of December 31, 2022.

We had previously identified material weaknesses in our internal control over financial reporting that have been remediated related to:  significant positions utilized for our tax provisions, our Chief Financial Officer’s (“CFO”) rights and access to post journal entries, and our financial reporting process. Our management has concluded these previously identified material weaknesses have been remediated as of December 31, 2022.

To remediate these material weaknesses, we have devoted significant effort and resources to improve our internal control over financial reporting. 

Our remediation steps have included:

• the retention of a public accounting firm to assist us with our tax accounting and tax provision calculations;

• the retention of an accounting advisory services consulting firm to assist us with evaluating and documenting the accounting treatment of significant unusual transactions;

• the enhancement of our procedures to evaluate and document the accounting treatment of significant unusual transactions, including the utilization of an accounting research tool we have implemented and subscribed;

• the enhancement of our segregation of duties through a review and revision of information technology access rights;

• the enhancement and formalization of our financial reporting scheduling and closing calendar; and,

• the enhancement of our secondary review process during our financial reporting process.

We can offer no assurance that these remediation steps will prevent any future deficiencies in our internal control over financial reporting.  Any failure to maintain adequate internal control over financial reporting could adversely impact our ability to report our financial position and results from operations on a timely and accurate basis.  Furthermore, we can give no assurance that the measures we have taken will remediate the outstanding material weakness, or will prevent any future material weaknesses, or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls.  In addition, our supply-chain management was adversely affected by factory shut-downsstrengthened controls and reductions in capacity as factories were requiredprocedures may not be adequate to adhere to stay-at-home ordersprevent or limitidentify irregularities or errors, which could affect the on-site staff to reduce the rate of infections.

To protect the health and safetyfair presentation of our employees, we have taken precautionary action and adopted social distancing measures and the implementation of staffing plans whereby employees can work remotely. Our efforts continue to evolve in response to new government measures and scientific knowledge regarding COVID-19. To contain COVID-19 or slow its spread, since early 2020, governments worldwide have enacted measures, including orders to close all businesses not deemed “essential,” isolating residents to their homes or places of residence, and implementing the practice of social distancing when engaging in essential activities. These measures have impacted the method and timing of certain business meetings and deliverables to specific customers and our ability to obtain certain suppliers’ materials, equipment, and services.consolidated financial statements.

We anticipate that these actions and the global health crisis caused by COVID-19 will continue to negatively impact business activity across the globe. When COVID-19 is demonstrably contained, we anticipate a rebound in economic activity, depending on the rate, pace, and effectiveness of the containment efforts deployed by various national, state, and local governments; however, the timing and extent of any such rebound is uncertain. We will continue to monitor the situation actively. We may take further actions altering the business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and stakeholders, or as required by federal, state, or local authorities. The potential effects of such alterations or modifications on our business are unclear, including our customers, employees, and prospects for our financial results.

We have a limited operating history upon which investors can evaluate our business and prospects.

We are an emerging commercial company that began commercial operations selling products in 2014.  Since we base our expectations of potential customers and future demand for our products on only limited experience, it is difficult for our management and investors to forecast and evaluate our prospects and revenues accurately.  Therefore, the proposed progression of our operations is subject to the risks inherent in light of the expenses, difficulties, complications, and delays frequently encountered in connection with the growth of any new business, as well as those risks that are specific to our Company in particular.  The risks include but are not limited to our reliance on third parties to complete some processes for the manufacturing and packaging of our products and the possibility that we will not be able to achieve design wins with our products.  In addition, to successfully introduce and market our products at a profit, we must establish brand name recognition and competitive advantages for our products.  There are no assurances that the Company can successfully address these challenges. If unsuccessful, the Company and its business, financial condition, and operating results will be materially and adversely affected.

Our R&D activity and resulting products could become obsolete or less competitive sooner than anticipated because of a faster than expectedfaster-than-expected change in one or more of the above-notedabove-noted factors.  Therefore, for our products to be competitive and achieve market acceptance, we need to keep pace with the rapid development of new process technologies, which requires us to:

•        respond effectively to technological advances by the timely introduction of new technologies and products;

Many of our current and potential competitors have entrenched market positions and customer relationships, established patents, and other IP and substantial technological capabilities.  Additionally, many of our competitors may have significant financial, technical, manufacturing, and marketing resources, which may allow them to implement new technologies and develop new products more quickly.

Due to the COVID-19 pandemic, some

Increased competition may result in lower prices and volumes, higher costs for resources, especially people, and lower profitability. We may not be able to supply customers with products that they deem superior and at competitive prices, and we may lose business to our competitors. Any inability to compete effectively would adversely affect our business, results of operations, and financial condition.

We may willrequire additional capital to support our business growth, and such capital may not be available.

We intend to continue to makemaking investments to support business growth.  We maywill require additional funds to respond to business challenges, including the need to design and developdeveloping new productssolutions or enhanceenhancing existing products, enhancesolutions, enhancing our operating infrastructure, expandexpanding our sales and marketing capabilities, and acquireacquiring complementary businesses, technologies, or assets.  Accordingly, we may needWe plan to engage in additional equity or debt financing to secure the necessary funds.  However, equity and debt financing might not be available when needed or, if available, might not be available on terms satisfactory to us.  If we raise additional funds through equity financing, our stockholders may experience dilution.  Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. If we are unable to obtain adequate financing or financing on terms satisfactory to us in the future, our ability to continue as a going concern, to support our business growth, and to respond to business challenges could be significantly limited as we may have to delay, reduce the scope of, or eliminate some or all of our initiatives, which could harm our operating results.

We are still developing many of our products, and they may not be accepted in the market or by significant customers.

Although we believe that our products provide advantages over existing MMIC products in the market, we cannot be sure that new products will achieve market acceptance.

The successful development and market acceptance of our MMIC products will be highly complex and will depend on the following principal competitive factors, including our ability to:

•        comply with industry standards and effectively compete against current products;

If we are unsuccessful in accomplishing these objectives, we may not compete successfully against current and potential competitors.  As a result, the market may not accept our future MMIC products.

In addition, Tier 1 manufacturers may be less receptive to adopting solutions from smaller companies such as the Company due to their desire to limit the expansion of their approved vendor lists.  The Company could also face pressure tofrom competitors who can provide more lucrative bundling options due to the breadth of itstheir overall portfolio.

We depend on a large distributor and several large customers in the automotive and wireless infrastructure market.

A substantial portion of our product revenue results from sales to large suppliers in the automotive industry, which requirerequires special performance and reliability requirements and stringent volume delivery demands.  In addition, we rely heavily on the wireless infrastructure market, which, similar to our automotive customers, requires we reliably meet high volumehigh-volume delivery schedules.  Therefore, our future operating results will be heavily affected by the success of large automotive and wireless infrastructure customers.

For fiscal years ended December 31, 2020 and 2019, our five largest customers and

Our three largest end customers collectively accounted for approximately 61%,45% and 49% of our revenues. Our three largest customersrevenue for 2022 and four largest customers comprised 54% and 70% of our revenues for the nine months ended September 30, 2021, and 2020, respectively.

We often service end customers through our largest distributor, who will ship to and bill directly for product shipments.  The concentration of billings to this distributor as a portion of our total revenues were 60%was 81% and 42%76% for fiscal years 20202022 and 2019,2021, respectively.  It is possible that demand for their customers’ products decreases materially.

We depend on a limited number of third-party manufacturers to manufacture, assemble, and test the products we have designed and developed. If we cannot secure such services from them, or the services they provide are inadequate, our business and operating results could be harmed.

We depend on a limited number of third-party manufacturers, assemblers, and test suppliers in Taiwan, Singapore, Malaysia, and the Philippines for our business. Any interruption in our relationship with any of these third-parties could cause interruptions or delays in the delivery of our products to our customers, and this may force us to seek services from alternative sources, or develop such capabilities internally, which may not have the required specifications, or be available in time to meet demand or on commercially reasonable terms, if at all. In addition, any disruption in the ability of our third-party service providers to provide the requested services could disrupt our product sales and product offerings.

We have no control over the personnel employed and facilities used by our third-party service providers and any significant interruption in the operation of the facilities where they are employed, including an interruption caused by our failure to successfully procure services from them because of technological systems failures, or a failure of third-party service providers to handle higher volumes of services requested or train new personnel adequately, could reduce our ability to fulfill product sales orders, which could result in canceled sales, loss of revenues and damage to our brand and reputation. These facilities are vulnerable to damage or interruption from natural disasters, fires, power loss, telecommunications failures, and similar events. They are also subject to break-ins, computer viruses, sabotage, intentional acts of vandalism, and other misconduct. The occurrence of a natural disaster or an act of terrorism, a decision to close the facilities without adequate notice, or other unanticipated problems could result in lengthy interruptions, which would have a serious adverse impact on our business.

While we endeavor to ensure that our third-party service providers comply with all of our corporate policies and practices, including privacy and data security practices, we have a limited ability to monitor and ensure compliance. As a result, if a third-party service provider deviates from these policies, our reputation with our customers may be harmed, and we may incur liability from our customers or governmental agencies.

We depend heavily on third parties.

We partner with a limited number of external suppliers and rely on them to fulfill our customers’ orders.  These third-partythird-party suppliers perform complex manufacturing processes, including die processing, packaging, and test, tape and reel.  The semiconductor industry has experienced supply constraints for specific items, which the COVID-19COVID-19 pandemic has exacerbated.

If these third-partythird-party suppliers fail to deliver our products on time, we will be unable to satisfy our customers’ orders, which will negatively impact our financial results, cash flow, and our ability to fund further product development efforts.

Our key suppliers commit to being compliant with applicable ISO 9001 quality standards; however, should they experience quality and reliability issues, this may delay shipments to our customers and negatively affect our reputation directly with customers and our reputation in the market, which could negatively impact our financial results.

We sell to several large companies with considerable bargaining power, which may require us to agree to terms and conditions that could harm our business or ability to recognize revenues.

Large companies comprise a significant portion of our current and target customer base.  These customers generally have greater purchasing power than smaller entities and, accordingly, often demand more favorable terms from suppliers, including us.  As a result, as we seek to expand our sales to existing customers and acquire new customers, we may be required to agree to terms and conditions that are more favorable to our customers, and that may affect the timing of our ability to recognize revenue, increase our costs, and harm our business, financial condition, and results of operations.  Failure to satisfy such onerous terms may result in litigation, damages, additional costs, market share loss, and reputation loss.  Additionally, these large customers may require that we agree to most-favoredmost-favored customer or exclusivity provisions concerning specific products that restrict our ability to do business with other customers causing us to increasingly rely on such large customers.

We face risks related to sales through independent sales representatives and distributors.

We sell a significant portion of our products through third-partythird-party distributors.  We depend on these distributors to help us create end-customerend-customer demand, provide technical support and other value-addedvalue-added services to customers, fill customer orders, and stock our products.  As a result, a material change in our relationship with one or more of these distributors or their failure to perform as expected could negatively impact our financial results.

Our ability to add or replace distributors for some of our products may be limited because our end customersend-customers may be hesitant to accept the addition or replacement of a distributor due to advantages in the incumbent distributors’ technical support and favorable business terms related to payments, discounts, and stocking of acceptable inventory levels.

Using third parties for sales representation and distribution exposes us to many risks, including competitive pressure, concentration, credit risk, and compliance risks.  Other third parties may use one of our distributors or sales representatives to sell products that compete with our products.  We may need to provide financial and other incentives, such as higher commission rates, to encourage them to prioritize the sale of our products.  Our distributors may face financial difficulties, including bankruptcy, which could harm our collection of accounts receivable and financial results.

Violations of the Foreign Corrupt Practices Act of 1977FCPA or similar laws by our distributors or other third-partythird-party intermediaries could have a material impact on our business.

Failure to manage risks related to our use of distributors or other third-partythird-party intermediaries may reduce sales, increase expenses, and weaken our competitive position.

Information technology (“IT”) system failures or otherBusiness disruptions may impactcould harm our business and reputation.adversely affect our results of operations.

We may

Our business could be subject to IT systems failures and network disruptions. These may be causeddisrupted by natural disasters, industrial accidents, power disruptions,cybersecurity incidents, telecommunications failures, power or water shortages, extreme weather conditions, public health issues (including the COVID-19 pandemic), military actions, acts of terrorism, political or war, cybersecurity incidents, physicalregulatory issues, and other man-made disasters or electronic break-ins, or other events or disruptions. System redundancy may be ineffective or inadequate, and our disaster recovery planning may not be sufficient for all eventualities. Such failures or disruptions could prevent the delivery of our products, compromise our data or our customers’ data or result in delayed or canceled orders, as well as potentially expose us to third-party claims. System failures and disruptions could also impede our transactions processing services and financial reporting.catastrophic events.

A significant portion of our research and development activities, our corporate headquarters, our IT systems, and certain of our other critical business operations are concentrated in a few geographic areas. Therefore, in the event of business disruption in one or more of those areas, our ability to deliver products could suffer, and we could incur significant losses, require substantial recovery time, and experience significant expenditures to resume operations, which could materially and adversely impact our business, financial condition, and operating results.

We carry commercial property damage and business interruption insurance against various risks, with limits we deem adequate, for reimbursement for damage to our fixed assets and the resulting disruption of our operations.  However, this coverage likely would not wholly cover the negative impact toon our business for any lengthy interruption, which could harm our Company in an unanticipated way and result in significant losses, a decline in revenue, and an increase in our costs and expenses.  Disruptions from these events would likely require substantial recovery time and impact profits and cash flow in a significant manner.  In addition, such business disruptions would adversely impact our relationships with our customers.

If our customers independently experience similarcomparable business disruptions, they may reduce or cancel their orders, which may adversely affect our results of operations.

If we experience poor manufacturing yields, our operating results may suffer.

Our products are unique and fabricated using semiconductor process technologies that are highly complex.  In some cases, we assemble our products in customized packages.  Some of our products consist of multiple components in a single module and feature enhanced levels of integration and complexity.  Our customers insist that we design our products to meet their same quality, performance, and reliability specifications.  Our manufacturing yield is a combination of yields across the entire supply chain, including wafer fabrication, assembly, and test yields.  Due to the complexity of our products, we periodically experience difficulties in achieving acceptable yields, particularly for new products.

Our end-user customers test our products once they assemble them into their products.  The number of usable products that result from our subcontractor production process can fluctuate because of many factors, including:

•        design errors;

Although our supply chain partners and our engineering and quality groups constantly seek to improve our manufacturing yields, such efforts may encounter significant barriers to success resulting in less-than-optimalless-than-optimal yields or losses that would directly impact profits and increase costs and lower cash flows.  For example, costs of product defects and deviations from required specifications include the following:

•        disposal of inventory or financial write-offs of inventory;

These issues could negatively impact our market position and reputation with customers, resulting in long-termlong-term harm to our business and financial results.

We are subject to inventory risks and costs because we build our products based on anticipated customer orders and forecasts often before receiving purchase orders for the products.

To ensure the availability of our products for some of our largest endend-user customers, we start manufacturing certain products in advance of receiving purchase orders based on forecasts provided by these customers.  However, these forecasts do not represent binding purchase commitments, and we do not recognize sales for these products until they are shipped to our customers.  As a result, we incur significant inventory and manufacturing costs in advance of anticipated sales.  Because demand for our products may not materialize or may be lower than expected, manufacturing based on forecasts subjects us to heightened risks of higher inventory carrying costs, increased obsolescence, and higher operating costs.  In addition, if product demand decreases or we fail to forecast demand accurately, we could be required to write off inventory, which would negatively impact our gross margin and other operating results.

We operate in a very competitive industry and must continue to innovate.

We compete with several companies primarily to design, manufacture, and sell RF solutions and discrete integrated circuits and modules.  Increased competition from any source could adversely affect our operating results through lower prices for our products, reduced demand for our products, losses of existing design slots with critical customers, and a corresponding reduction in our ability to recover development, engineering, and manufacturing costs.

Many of our existing and potential competitors have entrenched market positions, historical affiliations with OEMs, considerable internal manufacturing capacity, established IP rights, and substantial technological capabilities.  The semiconductor industry has experienced increased industry consolidation over the last several years, a trend we expect to continue.  Many of our existing and potential competitors may have more significant financial, technical, manufacturing, or marketing resources than we do.  As a result, we cannot be sure that we will compete successfully with our competitors.

Unfavorable changes in interest rates, pricing of certain precious metals, utility rates, and foreign currency exchange rates may adversely affect our financial condition, liquidity, and results of operations.

Any of these macro conditions could negatively impact our supply chain partners and the industry as a whole, which could materially decrease our profits and cash flow.

To compete, we must attract, retain, and motivate key employees, and our failure to do so could harm our business and our results of operations.

We must hire and retain qualified employees, develop leaders for essential business functions, and train and motivate our employees.  Our future operating results and success depend on keeping critical technical personnel and management and expanding our sales and marketing, R&D, finance, and administration personnel.  We do not have employment agreements with the vast majority of our employees.

We must attract qualified personnel.  The competition for qualified personnel is intense, especially considering the size of our organization, which must compete with much larger companies for top talent.  The number of people with experience, particularly in RF engineering, software engineering, integrated circuit design, and technical marketing and support, is limited.  In addition, existing or new immigration laws, policies, or regulations in the U.S. may limit the pool of available talent.  For example, travel bans, difficulties obtaining visas, and other restrictions on international travel could make it more challenging to manage our international operations effectively, operate as a global company,

or service our international customer base.  Changes in the interpretation and application of employment-relatedemployment-related laws to our workforce practices may also result in increased operating costs and less flexibility in meeting our changing workforce needs.  As a result, we cannot be sure that we will be able to attract and retain skilled personnel in the future, which could harm our business and our results of operations.

Litigation or legal proceedings could expose us to significant liabilities, occupy a considerable amount of our management’smanagement’s time and attention, and damage our reputation.

We may, from time to time, be a party to various litigation claims and legal proceedings from time to time.proceedings.  We will evaluate these claims and proceedings to assess the likelihood of unfavorable outcomes and estimate, if possible, the amount of potential losses.  For example, our manufacturers’ failure to successfully manufacture products that conform to our design specifications and the U.S. Federal Communications Commission (FCC)Commission's (“FCC”) strict regulatory requirements may lead to product defects and substantial costs to repair or replace these parts or materials, significantly impacting our ability to develop and implement our technology and improve our products’ performance.  In addition, claims made or threatened by our suppliers, distributors, end-user customers, competitors, or current or former employees could adversely affect our relationships, damage our reputation, or otherwise adversely affect our business, financial condition, or results of operations.  The costs associated with defending legal claims and paying damages could be substantial.  Our reputation could also be adversely affected by such claims, whether or not successful.

We may establish reserves as appropriate based upon assessments and estimates under our accounting policies in accordance with U.S. GAAP.  We base our assessments, estimates, and disclosures on the information available to us at the time and rely on legal and management judgment.  Actual outcomes or losses may differ materially from assessments and estimates. Actual settlements, verdicts, or resolutions of these claims or proceedings may negatively affect our business and financial performance.  For example, a successful claim against us that is not covered by insurance or over our available insurance limits could require us to make significant damages payments and could materially adversely affect our financial condition, results of operations, and cash flows.

We may become subject to warranty claims, product recalls, and product liability claims that could materially and adversely affect our financial condition and results of operations.

We may become subject to warranty claims, product recalls, and product liability claims leadingthat could lead to a significant expense.expenses.  In addition, although we maintain reserves for reasonably estimable liabilities and purchase product liability insurance, we may elect to self-insureself-insure concerning some issues, and our reserves may be inadequate to cover the uninsured portion of such claims.

Product liability insurance is subject to significant deductibles, and such insurance may be unavailable or inadequate to protect against all claims.  If one of our end-user customers recalls a product containing one of our devices, we may incur material costs and expenses, including replacement costs, direct and indirect product recall-relatedrecall-related costs, diversion of technical and other resources, and reputational harm.  Our customer contracts typically contain warranty and indemnification provisions, and in some instances, may also have liquidated damages provisions relating to product quality issues.  The potential liabilities associated with such provisions are significant, and in some cases, are included in agreements with some of our largest end customers.  Any such liabilities may significantly exceed any revenue we receive from the sale of the relevant products.  Costs, payments, or damages incurred or paid by us in connection with warranty and product liability claims and product recalls could materially and adversely affect our financial condition and the results of operations.

We are subject to risks associated with environmental, health, and safety regulations and climate change risks.change.

We are subject to many U.S. and foreign environmental, health, and safety laws and regulations. These laws and regulations include those related to the use, transportation, storage, handling, emission, discharge, and recycling or disposal of hazardous materials.  Our failure to comply with any of these existing or future laws or regulations could result in:

•        regulatory penalties and fines;

•        legal liabilities, including financial responsibility for remedial measures if our properties are contaminated;

•        expenses to secure required permits and governmental approvals;

•        reputational damage; and,

•        suspension or curtailment of third-party

	●	regulatory penalties and fines;
	●	legal liabilities, including financial responsibility for remedial measures if our properties are contaminated;
	●	expenses to secure required permits and governmental approvals;
	●	reputational damage; and,
	●	suspension or curtailment of third-party manufacturing, assembly, and test processes.

Existing and future environmental laws and regulations could also impact our product designs and limit or restrict the materials or components included in our products.

New climate change laws and regulations could require changes to manufacturing processes and increase our costs. In addition, new restrictions on carbon dioxide emissions or other greenhouse gases could result in increased costs for us and our suppliers.  Various jurisdictions are developing different climate change-basedchange-based regulations that may increase expenses and adversely affect our operating results.  We expect increased worldwide regulatory activity relating to climate change in the future.  Future compliance with these laws and regulations may adversely affect our business and the results of operations.

Impact of Product Demand on our Business

Our revenue, earnings, margins, and other operating results have fluctuated significantly and may fluctuate considerably in the future.  If demand for our products weakens as a result of economic conditions or for other reasons, our revenue and profitability will be impacted.  Our future operating results will depend on many factors, including business, political and macroeconomic changes such as trade restrictions and recession or slowing growth in the semiconductor industry and the overall global economy.

If demand for our products slows, our financial and operating results will be negatively impacted, thus impeding our ability to fund future product development efforts and, in extreme cases, negatively impacting our ability to finance normal operations without acquiring funds through credit or equity raises.

In addition, if our end customers experience spikes in demand far more than anticipated, our ability to respond effectively to such demand might be impacted.  This type of demand surge could negatively impact cash flow (e.g., supply chain inventory requirements) in the short term and potential loss of credibility with the industry in the long term if we do not meet demands reasonably.

We are subject to high degrees of product demand variability.  Even if we achieve a design win, our customers can delay or cancel a program without advanced warning, creating risk for inventory obsolescence, ineffective use of cash, and resources channeled to less than optimalless-than-optimal business opportunities.  The loss of a design win and failure to add new design wins to replace lost revenue and weakened customer demand would have a material adverse effect on our business, financial condition, and the results of operations.

Unauthorized

We rely on our intellectual property portfolio and may not be able to successfully protect against the use of our proprietary technology and intellectual property could adversely affect our business and results of operations.by third parties.

Our success and competitive position largely depend on our ability to obtain and maintain intellectual property rights protecting our products.

We rely on a combination of patents, copyrights, trademarks, service marks, trade secrets,secret laws, confidentiality provisions,procedures, and licensing arrangements to establish and protect our intellectual property and proprietary rights.  Unauthorized partiesWe cannot be sure that patents will be issued from any pending applications or that patents will be issued in all countries where we can sell our products.  Further, we cannot be sure that any claims allowed from pending applications will be of sufficient scope or strength to provide meaningful protection against our competitors.  Our competitors may attemptalso be able to copydesign around our patents.

The laws of some countries in which we develop, manufacture, or discover aspects ofsell our products may not protect our products or intellectual property rights to obtain, license, sell,the same extent as U.S. laws.  This risk increases the possibility of misappropriation or otherwise use information that we regard as proprietary. Policing unauthorized useinfringement of our products is difficult,technology and products.  Although we intend to defend our intellectual property rights vigorously, we may not be able to protectprevent the misappropriation of our technology from unauthorized use.technology.  Additionally, our competitors may independently develop productsnon-infringing technologies that are substantially the sameequivalent or superior to our products and do not infringe our rights. In these cases, we would be unableours.

We may need to prevent our competitors from sellingengage in legal actions to enforce or licensing these similar or superior products. In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as the laws of the U.S. As a result, litigation may be necessary to enforcedefend our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity. Regardless of the outcome,rights.  Generally, intellectual property litigation can be veryis both expensive and unpredictable.  Our involvement in intellectual property litigation could divert the attention of our management focus and efforts.technical personnel and have a material, adverse effect on our business.

We may be subject to claims of infringement of third-party intellectual property rights.

Our operating results may be adversely affected if third parties claim that our products infringed their patent, copyright, or other intellectual property rights.  Such assertions could lead to expensive and unpredictable litigation, diverting the attention of management and technical personnel.  An unsuccessful result in such litigation could adversely affect

our business, including injunctions, exclusion orders, and royalty payments to third parties.  In addition, if one of our customers or a supplier to one of our customers is found to have infringed on third-partythird-party intellectual property rights, such a finding could adversely affect the demand for our products.

We are subject to various state and federal, and foreign laws and regulations, including data protection and privacy laws and regulations, that may impact our business and subject us to significant fines and penalties or other negative consequences.

Our operations may be directly or indirectly subject to various state and federal laws. Many states and foreign jurisdictions have similar laws and regulations related to, including but not limited to, things such as anti-bribery and corruption and privacy and data protection, to which we are currently and may in the future, be subject. For instance, the U.S. Foreign Corrupt Practices Act (“FCPA”) prohibits companies and individuals from engaging in specified activities to obtain or retain business or influence a person working in an official capacity. Under the FCPA, it is illegal to pay, offer to pay, or authorize the payment of anything of value to any foreign government official, governmental staff members, political party, or political candidate in an attempt to obtain or retain business or to influence otherwise a person working in an official capacity. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the corporation’s transactions and devise and maintain an adequate system of internal accounting controls. Although we take our obligation to maintain our compliance with these various laws and regulations seriously and our evolving compliance program is designed to prevent the violation of these laws and regulations, we cannot guarantee that our compliance program will be sufficient or effective, that we will be able to integrate the operations of any acquired businesses into our compliance program on a timely basis, that our employees will comply with our policies and that our employees will notify us of any violation of our policies, that we will have the ability to take appropriate and timely corrective action in response to any such violation, or that we will make decisions and take actions that will necessarily limit or avoid liability for whistleblower claims that individuals, such as employees or former employees, may bring against us or that governmental authorities may prosecute against us based on information provided by individuals. If we are found to be in violation of any of the laws and regulations described above or other applicable state and federal laws, we may be subject to penalties, including civil, criminal, and administrative penalties, damages, fines, disgorgement, contractual damages, reputational harm, imprisonment, diminished profits and future earnings, additional reporting requirements, and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could have a material adverse effect on our business, results of operations and growth prospects. Any action against us for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. Moreover, achieving and sustaining compliance with applicable federal, state, and foreign laws could be costly and time-consuming for our management.

We also may be bound by contractual obligations and other obligations relating to privacy, data protection, and information security that are more stringent than applicable laws and regulations. The costs of compliance and other burdens imposed by laws, regulations, standards, and other obligations relating to privacy, data protection, and information security could be significant. Some companies, particularly larger or global enterprises, often will not contract with vendors that do not meet these rigorous standards and often seek contract terms to ensure we are financially liable for any breach of laws or regulations. Accordingly, our failure, or perceived inability, to comply with these laws, regulations, standards, and other obligations may limit the use and adoption of our products, reduce overall demand for our products, lead to regulatory investigations, breach of contract claims, litigation, and significant fines, penalties, or liabilities for actual or alleged noncompliance or slow the pace at which we close sales transactions, any of which could harm our business.

The effects of regulation may materially and adversely impact our business. For example, the FCC’s regulatory policies relating to radio frequency emissions, consumer protection laws of the U.S. Federal Trade Commission, product safety regulatory activities of the U.S. Consumer Products Safety Commission, and environmental regulatory actions of the U.S. Environmental Protection Agency could impede sales of our products in the United States. In addition, our customers and we are also subject to various import and export laws and regulations. Should we fail to comply with these regulations, we may be unable to produce and deliver these products to specific customers, and we may become subject to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, or injunctions.

Our product or manufacturing standards could also be impacted by new or revised environmental rules and regulations or other social initiatives. Those rules, or similar rules adopted in other jurisdictions, could adversely affect our costs, the availability of minerals used in our products, and our relationships with customers and suppliers.

We may incur substantial expenses related to regulatory requirements, and any regulatory compliance failure could cause our business to suffer.

The wireless communications industry is subject to ongoing regulatory obligations and reviews. Maintaining compliance with these requirements may result in significant additional expense to us, and any failure to maintain such compliance could cause our business to suffer.

Noncompliance with applicable regulations or requirements could also subject us to investigations, sanctions, mandatory product recalls, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, or injunctions. An adverse outcome in such litigation could require paying contractual damages, compensatory damages, punitive damages, attorneys’ fees, and other costs. These enforcement actions could harm our business, financial condition, and results of operations. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, financial condition, and results of operations could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and increased professional fees.

Our international customer base and third-party service providers subject us to additional risks that can adversely affect our business operations and financial condition.

We currently have a considerable international customer base. Additionally, as of September 30, 2021, approximately 55% of our product sales were to international end customers. Our international third-party service providers are significant to our operations. They are in emerging markets such as Taiwan, the Philippines, and Malaysia. We continue to expand our international customer base as part of our growth strategy.

Our strategy to diversify geographical risk by using several third-party service providers located throughout Asia and grow our international end customer base may fail due to our inability to navigate the challenge of international business. Conducting business in global markets, and particularly South Asia, requires significant management attention and could subject us to regulatory, economic, and political risks and competition that are different from those in the U.S. We cannot assure you that our international efforts will be successful or that returns on such efforts will be sustained or grow in the future. In addition, our international business efforts may fail to succeed due to other risks inherent in conducting businesses internationally, including:

•        difficulties and costs associated with staffing and managing foreign business activities;

•        anti-bribery or corruption compliance by our third-party service providers or us;

•        the potential diversion of management’s attention to oversee and direct business activities that are geographically distant from our U.S. headquarters;

•        compliance with multiple, conflicting and changing governmental laws and regulations, including employment, tax, privacy, antitrust and competition, environment, health, safety, and data protection laws and regulations;

•        labor market conditions and workers’ rights affecting our manufacturing operations or those of our customers or suppliers;

•        legal systems in which our ability to enforce and protect our rights may be different or less effective than in the U.S. and in which the ultimate result of dispute resolution is more difficult to predict;

•        differences in workplace cultures;

•        disruptions in capital and securities and commodities trading markets;

•        unexpected changes in regulatory requirements including the formal or informal imposition of export, import, or doing-business regulations, including trade sanctions, tariffs, and other related restrictions;

•        currency controls and fluctuations;

•        occurrences of geopolitical crises such as terrorist activity, armed conflict, civil or military unrest or political instability, which may disrupt manufacturing, assembly, logistics, security, and communications and result in reduced demand for our products;

•        pandemics and similar major health concerns, including COVID-19, could adversely affect our business and customer order patterns;

•        our ability to manage our third-party service providers compliance with differing technical and certification requirements outside the U.S.;

•        more limited protection for intellectual property rights in some countries; and

•        new and different sources of competition.

Our failure to manage these risks successfully could harm our existing and future international business operations and seriously impair our overall business.

Approximately 6% of our 2020 sales were attributable to customers located in China. We expect that revenue from international sales to China and other markets will continue to be a significant part of our total revenue. Any weakness in these economies could decrease demand for products that contain our products, which could materially and adversely affect our business. The imposition by the U.S. of tariffs on goods imported from China and potentially other countries, countermeasures imposed by China in response, U.S. export restrictions on sales of products to China, and other government actions that restrict or otherwise adversely affect our ability to sell our products to Chinese customers may have a material impact on our business, including our ability to sell products and to manufacture or source components.

As a company with significant sales outside of the U.S., our results may be affected by movements in currency exchange rates. In addition, our exposure may increase or decrease over time as our foreign business levels fluctuate in the countries where we may have sales or operations. These changes could have a material impact on our financial results. The functional currency for our current operations and international sales is the U.S. dollar; however, that may expand to other currencies as we grow.

Economic regulation in China and other countries where we sell products could adversely impact our business and the results of operations.

A significant portion of our potential customer base is located in China and other countries outside of the U.S. For many years, the Chinese economy has experienced periods of rapid growth and wide fluctuations in inflation. In response to these factors, the Chinese government has, from time to time, adopted measures to regulate growth and to contain inflation, including currency controls and measures designed to restrict credit, control prices, or set currency exchange rates. Such actions in the future, as well as other changes in Chinese or other non-U.S. laws and regulations, including efforts in furtherance of reducing dependence on foreign semiconductor manufacturers, could increase the cost of doing business in other countries, foster the emergence of foreign competitors, decrease the demand for our products in those countries, or reduce the supply of necessary materials for our products, which could have a material adverse effect on our business and results of operations.

Changes in government trade policies, including the imposition of tariffs and export restrictions, have limited and could continue to limit our ability to sell or provide our products and other items to specific customers and suppliers, which may materially adversely affect our sales and results of operations.

The U.S. and foreign governments have taken and may continue to take administrative, legislative, or regulatory action that could materially interfere with our ability to export, re-export, and transfer products and other items in certain countries, particularly in China. For example, the imposition of tariffs has not had a direct, material adverse impact on our business; however, the direct and indirect effects of tariffs and other restrictive trade actions are difficult to measure and are only one part of economic and trade policy.

Furthermore, we have experienced and may continue to experience restrictions on our ability to export, re-export, and transfer our products and other items to specific foreign customers and suppliers where exports, re-exports, or transfers of products require export licenses or are prohibited by government action. As an example, the U.S. government has in the past imposed export restrictions that effectively banned American companies from exporting, re-exporting, and transferring products to DJI Technology Company and Huawei Technologies Co., Ltd.

Even if such restrictions are lifted, any financial or other penalties or continuing export restrictions imposed on our customers could have a continuing negative impact on our future revenue and results of operations. In addition, other foreign customers or suppliers affected by future U.S. government sanctions or threats of sanctions may respond by developing new solutions to replace our products or by adopting our foreign competitors’ solutions.

We cannot predict what further actions may ultimately be taken concerning tariffs or other trade measures between the U.S. and China or other countries, what products or entities may be subject to such actions, or what steps may be taken by other countries in response. The loss of foreign customers or suppliers or the imposition of restrictions on our ability to sell or transfer products to such customers or suppliers due to tariffs, export restrictions, or other U.S. regulatory actions could materially and adversely affect our sales and business and results of operations.

If our products contribute to a data security breach, we may lose current or future customers, our reputation and business may be harmed, and we may incur liabilities.

Our end-user customers use our products in a wide variety of ways.  Although we do not control security features surrounding the use of our products by our end-user customers, our end-user customers’ security measures may not detect or prevent hacker interceptions, break-ins,break-ins, security breaches, the introduction of viruses or malicious code, such as “ransomware,” and other disruptions that may jeopardize the security of information transmitted through an electronic pathway using our products.  In addition, cyber-attackscyber-attacks and other malicious Internet-basedInternet-based activity continue to increase generally.  They may be directed at either the electronic transmission pathway within which our end-user customers use our products or even our own our corporate information technology software and infrastructure.

Because techniques used to obtain unauthorized access, exploit vulnerabilities, or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques, patch vulnerabilities, or implement adequate preventative measures as we research and develop our products.  In addition, certain of our end-user customers may have a greater sensitivity to security defects or breaches in electronic pathways using our products.  As a result, any actual or perceived security breach or theft of the business-criticalbusiness-critical data of one or more of our end-user customers, regardless of whether the breach is attributable to the electronic transmission through one of our products, may adversely affect the market’s perception of our products.  There can be no assurance that limitation of liability, indemnification, or other protective provisions in our contracts would be applicable, enforceable, or adequate in connection with a security breach, or would otherwise protect us from any such liabilities or damages concerning any particular claim.  We also cannot be sure that our existing general liability insurance coverage and coverage for errors or omissions will continue to be available on acceptable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not deny coverage as to any future claim.  As a result, one or more large claims may be asserted against us that exceed our available insurance coverage, or changes in our insurance policies may occur, including premium increases or the imposition of large deductible or co-insuranceco-insurance requirements.  Furthermore, because some of our employees and third-partythird-party service provider personnel have shifted to some degree of remote work due to the COVID-19COVID-19 pandemic, our ability to safeguard our own systems may be adversely impacted, and we may be more susceptible to data security breaches.

Furthermore, a party that can circumvent security measures or exploit any vulnerabilities in end-user customer systems using our products could misappropriate our end-user customers’ proprietary or confidential information, cause an interruption in their operations, damage or misuse their computer systems, misuse any information that they misappropriate, cause termination of our sales with those end-user customers, subject us to notification and indemnity obligations, litigation, and regulatory investigation or governmental sanctions, cause us to lose existing customers, and harm our ability to attract future customers.  Any such breach could cause harm to our reputation, business, financial condition, and results of operations, and we may incur significant liability.  As a result, our business and financial position may be harmed.

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

We rely on trade secrets, technical know-how,know-how, and other unpatented proprietary information relating to our product development and manufacturing activities to provide us with competitive advantages.  We protect this information by entering into confidentiality agreements with our employees, consultants, strategic partners, and other third parties.  We also design our computer systems and networks and implement various procedures to restrict unauthorized access to the dissemination of our proprietary information.

We face internal and external data security threats.  For example, current, departing, or former employees or third parties could attempt to improperly use or access our computer systems and networks to copy, obtain, or misappropriate our proprietary information or otherwise interrupt our business.  Like others, we are also subject to significant system or network disruptions from numerous causes, including computer viruses and other cyber-attacks,cyber-attacks, facility access issues, new system implementations, and energy blackouts.

Security breaches, computer malware, phishing, spoofing, and other cyber-attackscyber-attacks have become more prevalent and sophisticated in recent years.  While we defend against these threats daily, we do not believe that such attacks have caused us any material damage to date.  Because the techniques used by computer hackers and others to access or sabotage networks constantly evolve and generally are not recognized until launched against a target, we may be unable to anticipate, counter, or ameliorate all these techniques.  As a result, our and our customers’ proprietary information may be misappropriated, and we cannot predict the impact of any future incident.  Any loss of such information could harm our competitive position, result in a loss of customer confidence in the adequacy of our threat mitigation and detection processes and procedures, cause us to incur significant costs to remedy the damages caused by the incident, and divert management and other resources.  We routinely implement improvements to our network security safeguards, and we are devoting increasing resources to the security of our information technology systems.  However, we cannot assure you that such system improvements will be sufficient to prevent or limit the damage from any future cyber-attackcyber-attacks or network disruptions.

The costs related to cyber-attackscyber-attacks or other security threats, or computer systems disruptions typically would not be fully insured or indemnified by others.  As a result, the occurrence of any of the events described above could result in the loss of competitive advantages derived from our R&D efforts or our IP.  Moreover, these events may result in the early obsolescence of our products, product development delays, or diversion of the attention of management and critical information technology and other resources, or otherwise, adversely affect our internal operations and reputation or degrade our financial results and stock price.

We may be subject to theft, loss, or misuse

In the ordinary course of our business, we have access to sensitive, confidential, or personal data or information regarding our employees and others that is subject to privacy and security laws and regulations. Therefore, the theft, loss, or misuse of personal data collected, used, stored, or transferred by us to run our business, or by our third-party service providers, including business process software applications providers and other vendors that have access to sensitive data, could result in damage to our reputation, disruption of our business activities, significantly increased business and security costs or costs related to defending legal claims.

Global privacy legislation, enforcement, and policy activity in this area are rapidly expanding and creating a complex regulatory compliance environment. For example, the European Union has adopted the General Data Protection Regulation (“GDPR”), which requires companies to comply with rules regarding the handling of personal data, including its use, protection, and the ability of persons whose data is stored to correct or delete such data about themselves. Failure to meet GDPR requirements could result in penalties of up to 4% of worldwide revenue. In addition, the interpretation and application of consumer and data protection laws in the U.S., Europe, and elsewhere are often uncertain and fluid and may be interpreted and applied in a manner that is inconsistent with our data practices. As a result, complying with these changing laws has caused, and could continue to cause, us to incur substantial costs, which could harm our business and results of operations. Further, failure to comply with existing or new rules may result in significant penalties or orders to stop the alleged noncompliant activity. Finally, even our inadvertent failure to comply with federal, state, or international privacy-related or data protection laws and regulations could result in audits, regulatory inquiries, or proceedings against us by governmental entities or others.

Our sales have been concentrated in a small number of industry sectorend-user customers.

Our revenues have been concentrated in a relatively small number of large end-user customers, and we have historically derived a significant percentage of our total product revenues from a few end-user customers.  For fiscal years ended December 31, 20202022, and 2019,2021, our five largest customers and three largestend-user customers accounted for approximately 61%,59% and 67% of our revenues. Our three largest customers and four largest customers comprised 54% and 70% of ourtotal product revenues, for the nine months

ended September 30, 2021 and 2020, respectively.  If one of our large end-user customers ceases or significantly reduces its product orders from us, or if we fail to generate additional product sales with these or similarly significant end-user customers, there could be a material adverse effect on our business, financial condition or results of operations.

We expect that we will continue to depend upon a relatively small number of industry sectorend-user customers for a significant portion of our total revenues for the foreseeable future.  Therefore, the loss of any of these end-user customers or industry sector groups of end-user customers for any reason or a change of relationship with any of our key end-user customers could cause a material decrease in our total revenues.

Additionally, mergers or consolidations among our end-user customers could reduce the number of our end-user customers and could adversely affect our revenues and sales.  In particular, if our end-user customers are acquired by entities that are not also our end-user customers, that do not use our products or purchase products from one of our competitors, and choose to discontinue, reduce or change the volume of product purchases from us, our business and operating results could be materially and adversely affected.

Currently, those employed by our third-party service providers may be forced to work from home due to ongoing shelter-in-place orders due to the COVID-19 pandemic. As a result, the productivity of our third-party service providers may suffer as they adapt to these new environments, and our ability to ensure compliance with our privacy and data security policies is more limited. These circumstances may also force us to modify our product manufacturing process.

We depend on many technology providers, and if we cannot source solutions from them, our business and operating results could be harmed.

Our product design and development processes incorporate multiple software components obtained from licensors on a non-exclusivenon-exclusive basis.  Our license agreements can be terminated for cause.  In many cases, these license agreements specify a limited term and are only renewable beyond that term with the licensor’s consent.  If a licensor terminates a license agreement for cause, objects to its renewal or conditions renewal on modified terms and conditions, we may be unable to obtain licenses for equivalent software components on reasonable terms and conditions, including licensing fees, warranties, or protection from infringement claims.  In addition, some licensors may discontinue licensing their software to us or support the software version used in our product design and development processes.  In such circumstances, we may need to redesign our processes with substantial cost and time investment to incorporate alternative software components or be subject to higher technology costs. Any of these circumstances could adversely affect the cost and efficiency of our product research and development.

Due to the COVID-19 pandemic, we have taken certain precautions to keep our employees safe that could harm our business.

In light of the uncertain and evolving situation relating to the spread of COVID-19 and in compliance with applicable government executive orders, we have taken measures intended to help minimize the risk of transmitting the virus to our employees, our customers, and the communities in which we participate, which could negatively impact our business. These measures include allowing our employees to work remotely, suspending all non-essential travel worldwide, canceling, postponing, or holding virtually company-sponsored events when practical to do so, and discouraging employee attendance at industry events and unessential in-person work-related meetings. While we have a distributed workforce and our employees are accustomed to working remotely or with other remote employees, our workforce is not fully remote. Further, some of our employees have shifted to flexible remote work, which may have an adverse impact on our business due to decreased morale among employees, increased strain on IT systems, increased difficulty in ensuring compliance with our data security and compliance policies, and increased difficulty in the training, development, and recruitment of new employees. Although we continue to monitor the situation and may adjust our current policies as more information and guidance become available, temporarily suspending unnecessary travel and in-person business could negatively impact our marketing efforts, our ability to enter into customer relationships in a timely manner, our international expansion efforts, our ability to recruit employees across the organization and in sales and marketing, in particular, which could have longer-term effects on our sales pipeline or create operational or other challenges as we incorporate flexible remote work for the duration of the COVID-19 pandemic, any of which could harm our business. The extent to which the COVID-19 pandemic and our precautionary measures may impact our business will depend on future developments, which are highly uncertain and cannot be predicted at this time.

We may not be able to keep pace with changes in technology or provide timely enhancements to our products.

The market for our products is characterized by rapid technological advancements, changes in customer requirements, frequent new product introductions and enhancements, and changing industry standards.  To maintain our growth strategy, we must adapt and respond to our end-user customers’ technological advances and technological requirements.  Our future success will depend on our ability to: enhance our current products; introduce new products to keep pace with products offered by our competitors; increase the performance of our internal systems, particularly our research and development systems that meet our end-user customers’ changing requirements; and adapt to technological advancements and changing industry and regulatory standards.  We continue to make significant investments in the research and development of new products.  If our products become outdated, it may negatively impact our ability to meet performance expectations related to quality, time to market, cost, and innovation relative to our competitors.  In addition, the failure to achieve product performance requirements of our new and existing end-user customers and sustain good customer satisfaction may adversely impact our business and operating results.

Any failure to offer high-quality customer support for our products may adversely affect our relationships with our customers and harm our financial results.

Once our products are sold, our customers use our support organization to resolve technical issues relating to our products.  In addition, we also believe that our success in selling our products is highly dependent on our business reputation and favorable recommendations from our existing customers.  Therefore, any failure to maintain high-qualityhigh-quality customer support, or a market perception that we do not maintain high-qualityhigh-quality support, could harm our reputation, adversely affect our ability to maintain existing customers or sell our products to existing and prospective customers, and harm our business, operating results, and financial condition.

If we cannot attract and retain key personnel, our business could be harmed.

We must attract and retain highly qualified personnel to execute our business strategy.  If any of our key employees were to leave, we could face substantial difficulty hiring qualified successors.  We could experience a loss in productivity while any successor obtains the necessary training and experience.  Although we have arrangements with some of our executive officers designed to promote retention, our employment relationships are generally at-will,at-will, and we have had key employees leave in the past.  We cannot assure you that one or more key employees will not leave in the future.  In particular, we compete with many other companies for semiconductor developers and other skilled engineering, marketing, sales, and operations professionals, and we may not be successful in attracting and retaining the professionals we need.  We have, from time to time in the past, experienced, and we expect to continue to experience in the future, difficulty in hiring and difficulty in retaining highly skilled employees with appropriate qualifications.  In particular, we have experienced a competitive hiring environment in the Greater Triad Area, where we are headquartered in North Carolina.  Many of the companies with which we compete for experienced personnel have greater resources than we do.  In addition, in making employment decisions, job candidates often consider the value of the equity incentives they are to receive in connection with their employment.  If we and our third-partythird-party service providers experience difficulty recruiting and retaining qualified personnel, our business may be adversely affected.  If the price of our stock declines or experiences significant volatility, our ability to attract or retain key employees will be adversely affected.  We intend to continue to hire additional highly qualified personnel, including research and development and operational personnel.  Still, we may not be able to attract, assimilate, or retain qualified personnel in the future. Any failure to attract, integrate, motivate, and retain these employees could harm our business.

Our revenues and operating results have fluctuated and are likely to continue to fluctuate, making our quarterly results difficult to predict, which may cause us to miss analyst expectations and may cause the price of our common stockCommon Stock to decline.

Our operating results have been and may continue to be difficult to predict, even in the near term, and are likely to fluctuate due to various factors, many of which are outside of our control.

Comparisons of our revenues and operating results on a period-to-periodperiod-to-period basis may not be meaningful.  You should not rely on our past results to indicate our future performance.  Each of the following factors, among others, could cause our operating results to fluctuate from quarter to quarter:

•        the financial health of our customers;

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