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What changed in GSI TECHNOLOGY INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of GSI TECHNOLOGY INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+284 added−266 removedSource: 10-K (2025-06-18) vs 10-K (2024-06-13)

Top changes in GSI TECHNOLOGY INC's 2025 10-K

284 paragraphs added · 266 removed · 230 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

84 edited+22 added−12 removed75 unchanged
Biggest changeSales to foreign and domestic distributors accounted for 76.3%, 77.5% and 66.8% of our net revenues for fiscal 2024, 2023 and 2022, respectively. 10 Table of Contents The following direct customers accounted for 10% or more of our net revenues in one or more of the following periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ March 31, ​ ​ 2024 2023 2022 Contract manufacturers: ​ ​ ​ ​ ​ ​ ​ Flextronics Technology ​ 13.5 % 10.4 % 16.0 % Sanmina ​ 5.9 ​ 8.8 ​ 11.2 ​ Distributors: ​ ​ ​ ​ ​ ​ ​ Avnet Logistics ​ 50.6 ​ 48.1 ​ 38.0 ​ Nexcomm ​ 9.3 ​ 16.6 ​ 17.2 ​ ​ Nokia was our largest customer in fiscal 2024, 2023 and 2022.
Biggest changeThe following direct customers accounted for 10% or more of our net revenues in one or more of the following periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ March 31, ​ ​ 2025 2024 2023 Contract manufacturer: ​ ​ ​ ​ ​ ​ ​ Flextronics Technology ​ 2.7 % 13.5 % 10.4 % Distributors: ​ ​ ​ ​ ​ ​ ​ Avnet Logistics ​ 49.6 ​ 50.6 ​ 48.1 ​ Holystone ​ 22.6 ​ 2.5 ​ 2.4 ​ Nexcomm ​ 9.8 ​ 9.3 ​ 16.6 ​ ​ KYEC was our largest end user customer in fiscal 2025.
The single LEDA-S can be used without the need for a host PC in some applications so that, as an example, it can be packaged in a compact case for quad-copter use. It can also be used in small appliances for location recognition, object recognition, and GPS-denied alternate routing useful for drone product delivery or reconnaissance applications.
A single LEDA-S can be used without the need for a host PC in some applications so that, as an example, it can be packaged in a compact case for quad-copter use. It can also be used in small appliances for location recognition, object recognition, and GPS-denied alternate routing useful for drone product delivery or reconnaissance applications.
Our position in the synchronous SRAM market is well established and we have long-term supplier relationships with many of the leading original equipment manufacturer, or OEM, customers including Nokia. The revenue generated by these sales of high-speed synchronous SRAM products is being used to finance the development of our new in-place associative computing solutions and new types of SRAM products.
Our position in the synchronous SRAM market is well established and we have long-term supplier relationships with many of the leading original equipment manufacturer, or OEM, customers including KYEC and Nokia. The revenue generated by these sales of high-speed synchronous SRAM products is being used to finance the development of in-place associative computing solutions and new types of SRAM products.
We also serve the ongoing needs of the military/defense and aerospace markets by offering robust high-quality radiation-tolerant and radiation-hardened space grade SRAMs in addition to new in-place associative computing solutions for the military/defense and aerospace markets such as synthetic aperture radar (“SAR”) image processing.
We also serve the ongoing needs of the military/defense and aerospace markets by offering robust high-quality radiation-tolerant and radiation-hardened space grade SRAMs in addition to in-place associative computing solutions for the military/defense and aerospace markets such as synthetic aperture radar (“SAR”) image processing.
Our associative computing technology utilizes in-memory associative processor structures to address the bottlenecks that limit performance and increase power consumption in CPUs, GPUs, and Field Programable Gate Arrays (“FPGAs”) when processing large datasets.
Our associative computing technology utilizes in-memory associative processor structures to address the bottlenecks that limit performance and increase power consumption in CPUs, GPUs, and Field Programable Gate Arrays (“FPGAs”) accelerators when processing large datasets.
We intend to supplement our internal development activities by seeking additional opportunities to acquire other businesses, product lines or technologies, or enter into strategic partnerships, that would complement our current product lines, expand the breadth of our markets, enhance our technical capabilities, or otherwise provide growth opportunities. ​ Customers For our compute-in-memory associative computing solutions, we are focusing sales and marketing efforts in the markets for artificial intelligence and high-performance computing, with leading applications in natural language processing, computer vision and synthetic aperture radar.
We intend to supplement our internal development activities by seeking additional opportunities to acquire other businesses, product lines or technologies, or enter into strategic partnerships, that would complement our current product lines, expand the breadth of our markets, enhance our technical capabilities, or otherwise provide growth opportunities. ​ Customers For our compute-in-memory associative computing solutions, we are focusing sales and marketing efforts in the markets for artificial intelligence and high-performance computing, with leading applications in natural language 10 Table of Contents processing, computer vision and synthetic aperture radar.
We believe that our relationship with our U.S. distributors, Avnet, Mouser and Digi-Key, put us in a strong position to address the Very Fast SRAM memory market in the United States. We currently have regional sales offices located in China, Hong Kong, Israel and the United States.
We believe that our relationship with our U.S. distributors, Avnet, Mouser and Digi-Key, put us in a strong position to continue to address the Very Fast SRAM memory market in the United States. We currently have regional sales offices located in Hong Kong, Israel and the United States.
Our focus in this area being for similarity search acceleration in fast vector search applications and real-time mobile applications in aerospace and defense. With the SRAM market, we are focusing our sales on network/telecom OEMs and military/defense and aerospace with our radiation hardened and radiation tolerant product offerings.
Our focus in this area being for similarity search acceleration in fast vector search applications and real-time mobile applications in aerospace and defense. With the SRAM market, we are focusing our sales on network/telecom OEMs, test equipment and military/defense and aerospace with our radiation hardened and radiation tolerant product offerings.
Our radiation-hardened products are assembled and tested at Silicon Turnkey Solutions Inc., located near our Sunnyvale, California headquarters facility. Research and Development We have devoted substantial resources in the last eight years on the development of our APU products.
Our radiation-hardened products are assembled and tested at Silicon Turnkey Solutions Inc., located near our Sunnyvale, California headquarters facility. Research and Development We have devoted substantial resources in the last nine years on the development of our APU products.
Even as we expand our offering of in-place associative computing solutions, we continue to be committed to the synchronous SRAM market, by making available exceedingly high density performance memory products for incorporation into high-performance networking and telecommunications equipment, such as routers, switches, wide area network infrastructure equipment, wireless base stations and network access equipment.
Even as we expand our offering of in-place associative computing solutions, we continue to be committed to the synchronous SRAM market, by making available exceedingly high density performance memory products for incorporation into test and measurement applications and high-performance networking and telecommunications equipment, such as routers, switches, wide area network infrastructure equipment, wireless base stations and network access equipment.
The future growth and success of our company largely depends on our ability to attract, train and retain qualified professionals. As part of our effort to do so, we offer competitive compensation and benefit programs including a 401(k) Plan, stock options for all employees, flexible spending 14 Table of Contents accounts and paid time off.
The future growth and success of our company largely depends on our ability to attract, train and retain qualified professionals. As part of our effort to do so, we offer competitive compensation and benefit programs including a 401(k) Plan, stock options for all employees, flexible spending accounts and paid time off.
Unlike us, some of our principal competitors maintain their own semiconductor fabs, which may, at times, provide them with capacity, cost and technical advantages. Our principal competitors include NVIDIA Corporation and Intel Corporation for our in-place associative computing solutions and Infineon Technologies AG , Integrated Silicon Solution and REC for our SRAM products.
Unlike us, some of our principal competitors maintain their own semiconductor fabs, which may, at times, provide them with capacity, cost and technical advantages. Our principal competitors include NVIDIA Corporation and Intel Corporation for our in-place associative computing solutions and Infineon Technologies AG , Integrated Silicon Solution and Renesas Electronics Corporation for our SRAM products.
The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights, which have resulted in significant and often protracted and expensive litigation. We or our foundry from time to time are notified of claims that we may be infringing patents or other intellectual property rights owned by third parties.
The semiconductor industry is characterized by vigorous protection and pursuit of intellectual property rights, which have resulted in significant and often protracted and expensive litigation. We or our foundry from time to 14 Table of Contents time are notified of claims that we may be infringing patents or other intellectual property rights owned by third parties.
Akerib was the General Manager of NeoMagic Israel, a supplier of low-power audio and video integrated circuits for mobile use. Dr. Akerib has a PhD in applied mathematics and computer science from the Weizmann Institute of Science, Israel, and an MSc and BSc in electrical engineering from Tel Aviv University and Ben Gurion University, respectively. Dr.
Akerib was the General Manager of NeoMagic Israel, a supplier of low-power audio and video integrated circuits for mobile use. Dr. Akerib has a PhD in applied mathematics and computer science from the Weizmann Institute of Science, Israel, and an MSc and BSc in electrical engineering 16 Table of Contents from Tel Aviv University and Ben Gurion University, respectively. Dr.
Through the use of advanced architectures and design methodologies, we have developed high-performance SRAM products offering superior high speed performance capabilities and low power consumption, while our advanced silicon process technologies allow us to optimize yields, lower manufacturing costs and improve quality. ​ ● Product Innovation .
Through the use of advanced architectures and design methodologies, we have developed high-performance SRAM products offering superior high speed performance capabilities and low power consumption, while our advanced silicon process technologies allow us to optimize yields, lower manufacturing costs and improve quality. ​ 9 Table of Contents ● Product Innovation .
GSI has solutions to accelerate multimodal vector search as an on-prem or SaaS solution for OpenSearch and general Fast Vector Search, and for processing large area SAR images in real-time at high resolution. 6 Table of Contents Similarity search uses a technique called distance metric learning, in which learning algorithms measure how similar related objects are to each other.
GSI has solutions to accelerate multimodal vector search as an on-prem or SaaS solution for OpenSearch and general Fast Vector Search, and for processing large area SAR images in real-time at high resolution. Similarity search uses a technique called distance metric learning, in which learning algorithms measure how similar related objects are to each other.
To our knowledge, none of our other OEM customers accounted for more than 10% of our net revenues in any of these periods. Sales, Marketing and Technical Support We sell our products primarily through our worldwide network of independent sales representatives and distributors.
To our knowledge, none of our other OEM customers accounted for more than 10% of our net revenues in any of these periods. 11 Table of Contents Sales, Marketing and Technical Support We sell our products primarily through our worldwide network of independent sales representatives and distributors.
The market for networking memory products is competitive and is characterized by technological change, declining average selling prices and product obsolescence. Competition could increase in the future from existing competitors and from other companies that may enter our existing or future markets with solutions that may be less costly or provide higher performance or more desirable features than our products.
The market for networking memory products is competitive and is characterized by technological change and product obsolescence. Competition could increase in the future from existing competitors and from other companies that may enter our existing or future markets with solutions that may be less costly or provide higher performance or more desirable features than our products.
Our strategy includes the following key elements: ● Complete productization of our initial In-place Associative Computing product . Our principal operations objective is the completion of productization efforts for our initial in-place associative computing product. ​ ● Identifying and developing new long tail markets where the APU is differentiated .
Our strategy includes the following key elements: ● Complete productization of our In-place Associative Computing products . Our principal operations objective is the completion of productization efforts for our in-place associative computing products. ​ ● Identifying and developing new long tail markets where the APU is differentiated .
This award will be funded by the Small Business Innovation Research program, a competitive program funded by various U.S. government agencies, that encourages small businesses to engage in federal research and development with the potential for commercialization.
This award is funded by the Small Business Innovation Research program, a competitive program funded by various U.S. government agencies, that encourages small businesses to engage in federal research and development with the potential for commercialization.
Our APU has been demonstrated to outperform CPU’s and GPU’s in the market for AI search of large data collections by providing lower latency and increased capacity in a smaller form-factor and achieve such results with lower power consumption. In addition, our compute-in-place technology has wide application.
Our APU has been demonstrated to outperform CPUs and GPUs in the market for AI search of large data collections by providing lower latency and increased capacity in a smaller form-factor and achieve such results with lower power consumption. In addition, our compute-in-place technology has wide application.
As a result, we see demand for the APU in artificial intelligence applications, including approximate nearest neighbor searches, natural language processing, cryptography, and synthetic aperture radar as well as other fields whose processing in the datacenter can benefit from the APU’s smaller footprint, superior productivity, and low system power consumption.
As a result, we see applications for the APU in artificial intelligence applications, including approximate nearest neighbor searches, cryptography, and synthetic aperture radar as well as other fields whose processing can benefit from the APU’s smaller footprint, superior productivity, and low system power consumption.
We do not currently have a long-term supply contract with our foundry, and, therefore, TSMC is not obligated to manufacture products for us for any specified period, in any specified quantity or at any specified price, except as may be provided in a particular purchase order.
We do not currently have a long-term supply contract with our foundry, and, therefore, TSMC is not obligated to manufacture products for us for any specified period, in any specified quantity or at any specified 12 Table of Contents price, except as may be provided in a particular purchase order.
Our research and development staff includes engineering professionals with extensive experience in the areas of high- 12 Table of Contents speed circuit design, including APU design, as well as SRAM design and systems level networking and telecommunications equipment design.
Our research and development staff includes engineering professionals with extensive experience in the areas of high-speed circuit design, including APU design, as well as SRAM design and systems level networking and telecommunications equipment design.
Schirle was the Corporate Controller at Pericom Semiconductor Corporation, a provider of digital and mixed signal integrated circuits. From November 1996 to February 1997, Mr. Schirle was Vice President, Finance for Paradigm Technology, a manufacturer of SRAMs, and from December 1993 to October 1996, he was the Controller for Paradigm Technology. Mr.
Schirle was the Corporate Controller at Pericom Semiconductor Corporation, a provider of digital and mixed signal integrated circuits. From November 1996 to February 1997, Mr. Schirle was Vice President, Finance for Paradigm Technology, a manufacturer of SRAMs, and from December 1993 to October 1996, he was the Controller for Paradigm Technology. Mr. Schirle was formerly a certified public accountant.
APU SaaS Product We also offer commercialized APU as-a-service. This service offering runs on servers in a datacenter that have a direct connection to Amazon Web Services. Customers can access the APU via the AWS Cognito user identity and data synchronization service for GSI-packaged SaaS applications, or for customers’ own custom APU- 7 Table of Contents accelerated applications.
APU SaaS Product We also offer commercialized APU as-a-service. This service offering runs on servers in a datacenter that have a direct connection to Amazon Web Services. Customers can access the APU via the Amazon Web Services Cognito user identity and data synchronization service for GSI-packaged SaaS applications, or for customers’ own custom APU-accelerated applications.
Space force to swiftly detect, warn, analyze, attribute, and forecast potential and actual threats in space, ultimately bolstering the ability of the United States to maintain and leverage space superiority. The U.S.
These capabilities empower the U.S. Space force to swiftly detect, warn, analyze, attribute, and forecast potential and actual threats in space, ultimately bolstering the ability of the United States to maintain and leverage space superiority. The U.S.
We continue to aggressively target the military/defense and aerospace markets with our RadHard and RadTolerant devices. We plan to continue expansion into the military/defense and aerospace markets with our APU platform that has shown design robustness. ​ 9 Table of Contents ● Exploit opportunities to expand the market for our SRAM products .
We continue to aggressively target the military/defense and aerospace markets with our RadHard and RadTolerant devices. We plan to continue expansion into the military/defense and aerospace markets with our APU platform that has shown design robustness. ​ ● Exploit opportunities to expand the market for our SRAM products .
Under the terms of this Direct to Phase II award, we will develop an advanced non-Von-Neumann Associative Processing Unit-2, compute in-memory IC, and design and fabricate an APU2 Evaluation Board.
Under the terms of this Direct to Phase II award, we are developing an advanced non-Von-Neumann Associative Processing Unit-2, compute in-memory IC, and design and fabricate an APU2 Evaluation Board.
Item 1. Business Overview GSI provides in-place associative computing solutions for applications in high growth markets such as artificial intelligence (“AI”) and high-performance computing (“HPC”), including natural language processing and computer vision. Our associative processing unit (“APU”) family of products are focused on applications using similarity search and very flexible Boolean processing.
Item 1. Business Overview GSI provides in-place associative computing solutions for applications in high growth markets such as artificial intelligence (“AI”) and high-performance computing (“HPC”), including natural language processing and computer vision. Our associative processing unit (“APU”) family of products are focused on applications using similarity search and Boolean processing. Similarity search is very efficient for large database search queries.
In the case of contract manufacturers, OEM customers typically provide a list of approved products to the contract manufacturer, which then has discretion whether or not to purchase our products from that list. Direct sales to contract manufacturers accounted for 20.5%, 19.8% and 31.0% of our net revenues for fiscal 2024, 2023 and 2022, respectively.
In the case of contract manufacturers, OEM customers typically provide a list of approved products to the contract manufacturer, which then has discretion whether or not to purchase our products from that list. Direct sales to contract manufacturers accounted for 7.9%, 20.5% and 19.8% of our net revenues for fiscal 2025, 2024 and 2023, respectively.
Of these employees, 50 are based in our Sunnyvale facility, 54 are based in our Taiwan facility and 30 are based in our Israel facility. We believe that our future success will depend in large part on our ability to attract and retain highly-skilled, engineering, managerial, sales and marketing personnel.
Of these employees, 40 are based in our Sunnyvale facility, 40 are based in our Taiwan facility and 33 are based in our Israel facility. We believe that our future success will depend in large part on our ability to attract and retain highly-skilled, engineering, managerial, sales and marketing personnel.
Realization of this goal will require additional development and marketing efforts in calendar 2024.
Realization of this goal will require additional development and marketing efforts in calendar 2025.
These practices are set forth in our Code of Business Conduct and Ethics, which is periodically reviewed by all of our employees and is available on our website under “Corporate Governance.” Health and safety ​ We are committed to maintain a safe and healthy workplace for our employees. Our policies and practices are intended to protect our employees.
These practices are set forth in our Code of Business Conduct and Ethics, which is periodically reviewed by all of our employees and is available on our website under “Corporate Governance.” 15 Table of Contents Health and safety ​ We are committed to maintain a safe and healthy workplace for our employees.
As of March 31, 2024, we employed 16 sales and marketing personnel, and were supported by over 200 independent sales representatives, which we believe will enable us to address an expanded customer base with the continuing introduction of our associative computing products in fiscal 2024.
As of March 31, 2025, we employed 15 sales and marketing personnel and were supported by over 200 independent sales representatives. We believe these independent sales representatives will enable us to address an expanded customer base with the continuing introduction of our associative computing products in fiscal 2026.
Nokia purchases products directly from us and through contract manufacturers and distributors. Based on information provided to us by its contract manufacturers and our distributors, purchases by Nokia represented approximately 21%, 17% and 29% of our net revenues in fiscal 2024, 2023 and 2022, respectively.
Nokia purchases products directly from us and through contract manufacturers and distributors. Based on information provided to us by Nokia’s contract manufacturers and our distributors, purchases by Nokia represented approximately 12%, 21% and 17% of our net revenues in fiscal 2025, 2024 and 2023, respectively.
Furthermore, GSI’s expertise in developing radiation-tolerant components creates new opportunities in the growing market for AI products that can be used in low earth orbit and space applications, where other AI products are not able to survive the harsh environment. Recent excitement relating to ChatGPT has brought the market for AI search to the forefront of consumer awareness.
Furthermore, GSI’s expertise in developing radiation-tolerant components creates new opportunities in the growing market for AI products that can be used in low earth orbit and space applications, where other AI products are not able to survive the harsh environment. 7 Table of Contents The expanding use of ChatGPT and its competitors has brought the market for AI search to the forefront of consumer awareness.
The APU is based on a memory line structure, which means that it can operate on legacy instruction widths of 8 or 16-bits, or just as seamlessly operate on instructions of arbitrary widths of 1 bit, 768-bits or 2048-bits.
The APU is based on a memory line structure, which means that it can operate on legacy instruction widths of 8 or 16-bits, or just as seamlessly operate on instructions of arbitrary widths of 1 bit, 768-bits or 2048-bits. APUs can operate on any word width at interim processing steps.
GSI has similarly determined that the Serviceable Available Market (“SAM”) for APU search applications is approximately $7.1 billion in 2024, and anticipated to grow at a CAGR of 16% to $12.8 billion by 2027. The search market segments included in GSI’s TAM and SAM analyses include vector search and HPC.
GSI has similarly determined that the Serviceable Available Market (“SAM”) for APU search applications is approximately $7.3 billion in 2025, and anticipated to grow at a CAGR of 18% to $12.4 billion by 2028. The search market segments included in GSI’s TAM and SAM analyses include vector search and HPC.
The following is a representative list of our OEM customers that directly or indirectly purchased more than $500,000 of our SRAM products in the fiscal year ended March 31, 2024: ​ ​ ​ ​ ​ BAE Systems Ciena General Dynamics Northrup Grumman Nokia Raytheon ​ ​ Rockwell ​ ​ ​ Many of our OEM customers use contract manufacturers to assemble their equipment.
The following is a representative list of our OEM customers that directly or indirectly purchased more than $480,000 of our SRAM products in the fiscal year ended March 31, 2025: ​ ​ ​ ​ ​ Airbus BAE Systems KYEC Lockheed Nokia Northrup Grumman ​ ​ Rockwell ​ ​ ​ Many of our OEM customers use contract manufacturers to assemble their equipment.
The total addressable market (“TAM”) for APU search applications, which is the market where GSI is focusing its commercialization efforts, has been determined by GSI to be approximately $232 billion in 2024, and growing at a compound annual growth rate (“CAGR”) of 13% to $380 billion by 2027.
The total addressable market (“TAM”) for APU search applications, which is the market where GSI is focusing its commercialization efforts, has been determined by GSI to be approximately $247 billion in 2025, and growing at a compound annual growth rate (“CAGR”) of 27% to $708 billion by 2028.
The APU has several benefits that are particularly useful to overcome the data processing challenges noted above. First, the APU does not have the word size limitation of traditional CPU and GPU processors.
The APU has several benefits that are particularly useful to overcome the high power challenges of GPUs. First, the APU does not have the word size limitation of traditional CPU and GPU processors.
We plan to consider a wide range of options including equity or debt financing, divestiture of assets, technology licensing or other strategic arrangements including the sale of the Company. As part of the strategic review process, we hired Needham & Company, LLC, as our strategic and financial advisor.
We are considering a wide range of options including 5 Table of Contents equity or debt financing, divestiture of assets, technology licensing or other strategic arrangements including the sale of GSI. As part of the strategic review process, we hired Needham & Company, LLC, as our strategic and financial advisor.
We believe that our ability to compete successfully in the rapidly evolving markets for “big data” and memory products for the networking and telecommunications markets depends on a number of factors, including: ● product performance, features, including low power consumption, quality, reliability and price; ● manufacturing flexibility, product availability and customer service throughout the lifetime of the product; ● the availability of software tools, such as compilers and libraries that enable customers to easily design products for their specific needs; ● the timing and success of new product introductions by us, our customers and our competitors; and ● our ability to anticipate and conform to new industry standards.
While some of our competitors offer a broader array of products and offer some of their products at lower prices than we do, we believe that our focus on performance leadership provides us with key competitive advantages. 13 Table of Contents We believe that our ability to compete successfully in the rapidly evolving markets for “big data” and memory products for the networking and telecommunications markets depends on a number of factors, including: ● product performance, features, including low power consumption, quality, reliability and price; ● manufacturing flexibility, product availability and customer service throughout the lifetime of the product; ● the availability of software tools, such as compilers and libraries that enable customers to easily design products for their specific needs; ● the timing and success of new product introductions by us, our customers and our competitors; and ● our ability to anticipate and conform to new industry standards.
He served in the same capacity from February 2004 to April 2006. From April 2006 to August 2006, Mr. Wu was Vice President of Operations at QPixel Technology, a semiconductor company. From July 1999 to January 2004, Mr. Wu served as our Director of Operations. From July 1997 to June 1999, Mr.
From April 2006 to August 2006, Mr. Wu was Vice President of Operations at QPixel Technology, a semiconductor company. From July 1999 to January 2004, Mr. Wu served as our Director of Operations. From July 1997 to June 1999, Mr. Wu served as Vice President of Operations at Scan Vision, a semiconductor manufacturer.
Human Capital Resources As of March 31, 2024, we had 148 full-time employees, including 101 engineers, of which 64 are engaged in research and development and 45 have PhD or MS degrees, 16 employees in sales and marketing, 10 employees in general and administrative capacities and 59 employees in manufacturing.
Human Capital Resources As of March 31, 2025, we had 121 full-time employees, including 82 engineers, of which 47 are engaged in research and development and 32 have PhD or MS degrees, 16 employees in sales and marketing, 10 employees in general and administrative capacities and 44 employees in manufacturing.
We seek to create and foster a healthy, balanced, and ethical work environment for everyone in our organization. To this end, we promote an ethical organizational culture and encourage all employees to raise questions or concerns about actual or potential ethical issues and company policies and to offer suggestions about how we can make our organization better.
To this end, we promote an ethical organizational culture and encourage all employees to raise questions or concerns about actual or potential ethical issues and company policies and to offer suggestions about how we can make our organization better.
As part of the sale, we agreed that we would enter into a lease agreement for all of the Sunnyvale property from the purchaser for an initial term of ten years from the closing of the sale transaction. We have the option to renew the term of the lease for two additional five-year periods.
Concurrent with the sale, we entered into a lease agreement (the “Lease”) to lease all of the Sunnyvale Property that we occupied from the purchaser for an initial term of ten years from the closing of the sale of the Sunnyvale Property. We have the option to renew the term of the Lease for two additional five-year periods.
Investor Information You can access financial and other information in the Investor Relations section of our website at www.gsitechnology.com .
Our policies and practices are intended to protect our employees. Investor Information You can access financial and other information in the Investor Relations section of our website at www.gsitechnology.com .
Second, the APU is also an associative machine, which means that data that is resident in the device can be applied to a function only if it is deemed associated (for example, with a meta-tag) to the processing.
This dynamic flexibility is a tremendous advantage for non-linear processing used in high performance compute workloads. Second, the APU is also an associative machine, which means that data that is resident in the device can be applied to a function only if it is deemed associated (for example, with a meta-tag) to the processing.
Because we have limited experience developing integrated circuit products other than Very Fast SRAMs, any efforts by us to introduce new products based on new technology, including our new in-place associative computing products, may not be successful and, as a result, our business may suffer. 13 Table of Contents Intellectual Property Our ability to compete successfully depends, in part, upon our ability to protect our proprietary technology and information.
Because we have limited experience developing integrated circuit products other than Very Fast SRAMs, any efforts by us to introduce new products based on new technology, including our new in-place associative computing products, may not be successful and, as a result, our business may suffer.
We are marketing specific differentiated applications and API’s as-a-Service adding Amazon Web Services (“AWS”), Azure, or Google Cloud Storage (“GCS”) users to our customer base along with those that want this hardware product. We support customers with prebuilt APIs and libraries to support their parallel programming of the Gemini-I.
Gemini-I is in full production. We are marketing specific differentiated applications and APIs as-a-Service adding Amazon Web Services, Azure, or Google Cloud Storage users to our customer base along with those that want on-prem or to build embedded edge products. We support customers with prebuilt APIs and libraries to support their parallel programming of the Gemini-I.
We currently hold 128 United States patents, including 60 memory patents and 68 associative computing patents, and have in excess of a dozen patent applications pending. We cannot assure you that any patents will be issued as a result of our pending applications.
We believe that it is important to maintain a large patent portfolio to protect our innovations. We currently hold 142 United States patents, including 60 memory patents and 82 associative computing patents, and have in excess of a dozen patent applications pending. We cannot assure you that any patents will be issued as a result of our pending applications.
This support includes in-depth product presentations, datasheets, application notes, simulation models, 11 Table of Contents sales tools, marketing communications, marketing research, trademark administration and other support functions. We also engage in various marketing activities to increase brand awareness.
Our marketing group also provides technical, strategic and tactical sales support to our direct sales personnel, sales representatives and distributors. This support includes in-depth product presentations, datasheets, application notes, simulation models, sales tools, marketing communications, marketing research, trademark administration and other support functions. We also engage in various marketing activities to increase brand awareness.
Schirle was formerly a certified public accountant. 16 Table of Contents Bor-Tay Wu has served as our Vice President, Taiwan Operations since January 1997. From January 1995 to December 1996, Mr. Wu was a design manager at Atalent, an IC design company in Taiwan. Ping Wu has served as our Vice President, U.S. Operations since September 2006.
Bor-Tay Wu has served as our Vice President, Taiwan Operations since January 1997. From January 1995 to December 1996, Mr. Wu was a design manager at Atalent, an IC design company in Taiwan. Ping Wu has served as our Vice President, U.S. Operations since September 2006. He served in the same capacity from February 2004 to April 2006.
We sell our products to defense contractors that manufacture products for military/defense and aerospace applications such as radar and guidance systems and satellites. We also sell our products to OEMs for test and measurement applications such as high-speed testers, high performance computing applications such as high volume trading, and for medical applications such as ultrasound and CAT scan equipment .
We also sell our products to OEMs for test and measurement applications such as burn-in chambers, high-speed testers, high performance computing applications such as high volume trading, and for medical applications such as ultrasound and CAT scan equipment .
Air Force Research Laboratory (“AFRL”) to leverage the compute-in-memory architecture of the Gemini® APU. This chip is designed for various AI applications to tackle key challenges in the Department of the Air Force, including in-aircraft search and rescue, object detection, moving target indication, change detection, and structural similarity index measure (“SSIM“) in GPS-absent situations.
This chip is designed for various AI applications to tackle key challenges in the Department of the Air Force, including in-aircraft search and rescue, object detection, moving target indication, change detection, and structural similarity index measure (“SSIM“) in GPS-absent situations. We are also developing algorithms using data from the U.S.
GSI’s fiscal year 2024 net revenue decreased by 27% compared to net revenue in fiscal year 2023, reflecting cautionary spending by our customers and purchases made as a result of supply chain constraints in the previous periods and the current economic environment, including the impact of rising interest rates, worldwide inflationary 3 Table of Contents pressures and the decline in the global economic environment, all of which resulted in a decline in demand for our SRAM products and delays in completing the productization of our APU products.
GSI’s fiscal year 2025 net revenue decreased by 6% compared to net revenue in fiscal year 2024, reflecting cautionary spending by our customers and fewer purchases made as a result of worldwide inflationary pressures, 3 Table of Contents higher interest rates, increasing geopolitical tensions and decline in the global economic environment, all of which resulted in reduced demand for our SRAM products.
GSI’s gross margin decreased by 5.3% compared to the prior fiscal year. The decrease in gross margin was primarily due to product mix and the effect of lower revenue on the fixed costs in our cost of revenues.
GSI’s gross margin decreased by 4.9% compared to the prior fiscal year primarily due to product mix and the effect of lower revenue on the fixed costs in our cost of revenues as well as severance related payments related to our August 2024 cost reduction initiative.
The SEC maintains an Internet site that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC at www.sec.gov . 15 Table of Contents Information About Our Executive Officers The following table sets forth certain information concerning our executive officers as of June 1, 2024: ​ ​ ​ ​ ​ ​ Name Age Title Lee-Lean Shu ​ 69 ​ ​ President, Chief Executive Officer and Chairman Avidan Akerib ​ 68 ​ ​ Vice President, Associative Computing Patrick Chuang ​ 74 ​ ​ Senior Vice President, Memory Design Didier Lasserre ​ 59 ​ ​ Vice President, Sales Douglas Schirle ​ 69 ​ ​ Chief Financial Officer Bor-Tay Wu ​ 72 ​ ​ Vice President, Taiwan Operations Ping Wu ​ 67 ​ ​ Vice President, U.S.
Information About Our Executive Officers The following table sets forth certain information concerning our executive officers as of June 1, 2025: ​ ​ ​ ​ ​ ​ Name Age Title Lee-Lean Shu ​ 70 ​ ​ President, Chief Executive Officer and Chairman Avidan Akerib ​ 69 ​ ​ Vice President, Associative Computing Patrick Chuang ​ 75 ​ ​ Senior Vice President, Memory Design Didier Lasserre ​ 60 ​ ​ Vice President, Sales Douglas Schirle ​ 70 ​ ​ Chief Financial Officer Bor-Tay Wu ​ 73 ​ ​ Vice President, Taiwan Operations Ping Wu ​ 68 ​ ​ Vice President, U.S.
In January 2024, we announced that GSI was selected by AFWERX the innovation arm of the U.S. Department of the Air Force for an SBIR Direct-to-Phase II contract in the amount of $1.1 million to demonstrate high-data computation use cases leveraging the distinct compute in-memory architecture of our APU2. We will create specialized algorithms for the U.S.
Department of the Air Force for an SBIR Direct-to-Phase II contract in the amount of $1.1 million to demonstrate high-data computation use cases leveraging the distinct compute in-memory architecture of our APU2. We are creating specialized algorithms for the U.S. Air Force Research Laboratory (“AFRL”) to leverage the compute-in-memory architecture of the Gemini® APU.
The software stack accelerates development by providing an integrated framework environment for the compute-in-memory as well as host and management code modules. In calendar 2023, we released an update to this compiler stack framework allowing customers to optimize their applications by editing APIs provided by GSI, or writing their own API’s.
The software stack accelerates development by providing an integrated framework environment for the compute-in-memory as well as host and management code modules. Our compiler stack framework allows customers to optimize their applications by editing APIs provided by GSI, or write their own APIs. In January 2024, we received first silicon for our second -generation Gemini-II chip.
APU Board Level Product The Gemini-I APU is currently in production as a full-size PCIe card and a 1U E1.L card. These are the Leda-E and Leda-S, respectively. The Leda-S E1.L form factor enables the use of market standard SSD rack enclosures to build a dense APU compute appliance unachievable by GPU cards that require specialized connectivity for expansion.
The Leda-S E1.L form factor enables the use of market standard SSD rack enclosures to build a dense APU compute appliance unachievable by GPU cards that require specialized connectivity for expansion.
Similarity search is used in search queries for ecommerce, computer vision, drug discovery, cyber security and service markets such as NoSQL, Elasticsearch, and OpenSearch. Our extensive historical experience in developing high speed synchronous static random access memory, or SRAM, facilitated our ability to transform the focus of our business to the development of reliable hardware AI products and solutions.
Our extensive historical experience in developing high speed synchronous static random access memory, or SRAM, facilitated our ability to transform the focus of our business to the development of reliable hardware AI products and solutions.
By changing the computational framework to parallel processing and having search functions conducted directly in a processing memory array, the APU can greatly expedite computation and response times in many “big data” applications. We are creating a new category of computing products that are expected to have substantial target markets and a large new customer base in those markets.
By changing the computational framework 6 Table of Contents to parallel processing and having search functions conducted directly in a processing memory array, the APU can greatly expedite computation and response times in many “big data” applications.
We have also expanded our product offerings to include 144 megabit, 72 megabit, and 32 megabit SyncBurst and NBT SRAMs RadTolerant products to enable the avionics and other space platforms that 8 Table of Contents have historically leveraged smaller asynchronous devices.
We have also expanded our product offerings to include 144 megabit, 72 megabit, and 32 megabit SyncBurst and NBT SRAMs RadTolerant products to enable the avionics and other space platforms that have historically leveraged smaller asynchronous devices. The RadHard products are offered in two package options: a hermetically-sealed ceramic column grid array package, and standard plastic packaging.
In June 2023, we announced the receipt of an award of a prototype agreement with the Space Development Agency (“SDA”) for the development of a Next-Generation Associative Processing Unit-2 (“APU2”) for Enhanced Space-Based Capabilities. Our next-generation non-Von-Neumann Associative Processing Unit compute in-memory integrated circuit (“IC”) offers unique capabilities to address the challenges faced by the U.S.
In June 2023, we announced the receipt of an award of a prototype agreement with the Space Development Agency for the development of a Next-Generation Associative Processing Unit-2 (“APU2”) for Enhanced Space-Based Capabilities.
Market applications in these segments include search and retrieval in various fields, synthetic aperture radar in research, aerospace and defense, and service markets such as OpenSearch and AWS. 5 Table of Contents The growth in demand for associative processing computing solutions is being driven by the increasing market adoption and usage of graphics processing unit (“GPU”) and CPU farms for AI processing of large data collections, including parallel computing in scientific research.
The growth in demand for associative processing computing solutions is being driven by the increasing market adoption and usage of graphics processing unit (“GPU”) and CPU farms for AI processing of large data collections, including parallel computing in scientific research.
We have responded with increased pricing to our customers. We typically provide a warranty of up to 36 months on our products. Liability for a stated warranty period is usually limited to replacement of defective products. Our marketing efforts are, first and foremost, focused on ensuring that the products we develop meet or exceed our customers’ needs.
Liability for a stated warranty period is usually limited to replacement of defective products. Our marketing efforts are, first and foremost, focused on ensuring that the products we develop meet or exceed our customers’ needs. Our marketing efforts are currently focused on marketing our in-place associative computing solutions and our radiation-tolerant and radiation-hardened space grade SRAMs.
If we fail to materially commercialize our APU products, we may not generate sufficient revenues to offset our development costs and other expenses, which will have an adverse impact on our business including a potential impairment of intangible assets and a negative impact on our market capitalization.
If we fail to materially commercialize our APU products, we may not generate sufficient revenues to offset our development costs and other expenses, which will have an adverse impact on our business including a potential impairment of intangible assets and a negative impact on our market capitalization. 8 Table of Contents High-Speed Synchronous SRAM Market Overview High-speed synchronous SRAMs are incorporated into networking and telecom equipment, military/defense and aerospace applications, audio/video processing, test and measurement applications, medical and automotive applications, and other miscellaneous applications.
We recruit the best people for the job regardless of gender, ethnicity or other protected traits and it is our policy to fully comply with all laws applicable to discrimination in the workplace. Our diversity, equity and inclusion principles are also reflected in our employee training and policies.
Inclusion and belonging We are committed to our continued efforts to foster an inclusive work environment that supports the global workforce and the communities we serve. We recruit the best people for the job regardless of gender, ethnicity or other protected traits and it is our policy to fully comply with all laws applicable to discrimination in the workplace.
Under the new lease, we are responsible for base rent initially at a rate of approximately $90,768 per month and the monthly operational expenses, such as maintenance, insurance, property taxes and utilities. The closing of the purchase and sale of the property, and entry into the lease, occurred in June 2024.
Pursuant to the Lease, we are responsible for base rent initially at a rate of approximately $90,768 per month and the monthly operational expenses, such as maintenance, insurance, property taxes and utilities. The rental rate will increase three percent (3%) per year beginning on the first anniversary of the closing.
We continue to enhance our diversity, equity and inclusion policies which are guided by our executive leadership team. Ethics & Corporate Responsibility ​ We are committed to ensuring ethical organizational governance, embracing diversity and inclusion in the board room and throughout the organization and are committed to observing fair, transparent, and accountable operating practices.
Ethics & Corporate Responsibility ​ We are committed to ensuring ethical organizational governance, embracing inclusion in the board room and throughout the organization and are committed to observing fair, transparent, and accountable operating practices. We seek to create and foster a healthy, balanced, and ethical work environment for everyone in our organization.
Because industry practice allows customers to reschedule or cancel orders on relatively short notice, these orders are not firm and hence we believe that backlog is not a good indicator of our future sales. We have experienced increased costs as a result of inflation and supply chain constraints for wafers and outsourced assembly, burn-in and test operations.
Because industry practice allows customers to reschedule or cancel orders on relatively short notice, these orders are not firm and hence we believe that backlog is not a good indicator of our future sales. We typically provide a warranty of up to 36 months on our products.
We changed our name to GSI Technology in December 2003 and reincorporated in Delaware in June 2004 under the name GSI Technology, Inc. Our principal executive offices are located at 1213 Elko Drive, Sunnyvale, California, 94089, and our telephone number is (408) 331-8800.
Our principal executive offices are located at 1213 Elko Drive, Sunnyvale, California, 94089, and our telephone number is (408) 331-8800.
We work closely with key customers to understand their roadmaps and to ensure that the products we develop meet their requirements (primary aspects of which include functionality, performance, electrical interfaces, power, and schedule). Our marketing group also provides technical, strategic and tactical sales support to our direct sales personnel, sales representatives and distributors.
Previously, those efforts were focused on defining our high-performance SRAM product roadmap. We work closely with key customers to understand their roadmaps and to ensure that the products we develop meet their requirements (primary aspects of which include functionality, performance, electrical interfaces, power, and schedule).
We rely on a combination of patents, copyrights, trademarks, trade secret laws, non-disclosure and other contractual arrangements and technical measures to protect our intellectual property. We believe that it is important to maintain a large patent portfolio to protect our innovations.
Intellectual Property Our ability to compete successfully depends, in part, upon our ability to protect our proprietary technology and information. We rely on a combination of patents, copyrights, trademarks, trade secret laws, non-disclosure and other contractual arrangements and technical measures to protect our intellectual property.
Our commercialization efforts for the APU product are focused on markets where the APU shows factors of improvement against CPU or GPU systems. The APU differentiates itself most for similarity search, multi-modal vector search, real-time very large database search, and several scientific high-performance computing-workloads processing sensor data.
The APU differentiates itself most for similarity search, multi-modal vector search, real-time very large database search, and several scientific high-performance computing-workloads processing sensor data. The APU’s improved performance over CPU or GPU systems provides a paradigm-shifting ability to process data in real-time.
Space Force in processing extensive sets of big data in space. Our overarching objective is to enable and enhance current and future mission capabilities through the deployment of compute in-memory integrated systems that can efficiently handle vast amounts of data in real-time at the edge.
Our overarching objective is to enable and enhance current and future mission capabilities through the deployment of compute in-memory integrated systems that can efficiently handle vast amounts of data in real-time at the edge. The APU, featuring a scalable format, compact footprint, and low power consumption, presents an ideal solution for edge applications where prompt and precise responses are crucial.
Pursuant to an agreed-upon schedule, we will receive milestone payments totaling an estimated $1.25 million upon the successful completion of predetermined milestones, of which $297,000 was received in the quarter ended September 30, 2023 and $138,000 was received in the quarter ended December 31, 2023.
Pursuant to an agreed-upon schedule, we are to receive milestone payments totaling an estimated $1.25 million upon the successful completion of predetermined milestones, of which $435,000 was received in fiscal 2024 and $318,000 was received in fiscal 2025. In January 2024, we announced that GSI was selected by AFWERX the innovation arm of the U.S.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf this customer, or any of our other major customers, reduces the amount they purchase, stops purchasing our products or fails to pay us, our financial position and operating results will suffer. ● We cannot assure you that our evaluation of strategic alternatives will result in any particular outcome, and the perceived uncertainties related to the Company could adversely affect our business and our shareholders. ● Higher interest rates, worldwide inflationary pressures, the evolving conflict in the Middle East, the military conflict in Ukraine, and the decline in the global economic environment may adversely affect our revenues, results of operations and financial condition. ● We have incurred significant losses and may incur losses in the future. ● If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected. ● If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our operating results. ● We depend upon the sale of our Very Fast SRAMs for most of our revenues while we transform the focus of our business to the sale of in-place associative computing products and services, and a downturn in demand for Very Fast SRAM products or we are unable to achieve our revenue goals for our new in-place associative computing products and services, may cause us to experience cash shortfalls that would harm our business and our future prospects. ● Our future success is substantially dependent on the successful introduction of new in-place associative computing products which entails significant risks. ● We are dependent on a number of single source suppliers. 17 Table of Contents ● If we do not successfully develop new products to respond to rapid market changes due to changing technology and evolving industry standards, particularly in the networking and telecommunications markets, our business will be harmed. ● If we are unable to offset increased wafer fabrication and assembly costs, our gross margins will suffer. ● We are subject to the highly cyclical nature of the networking and telecommunications markets. ● We rely heavily on distributors and our business will be negatively impacted if we are unable to develop and manage distribution channels and accurately forecast future sales through our distributors. ● The average selling prices of our products are expected to decline. ● We are substantially dependent on the continued services of our senior management and other key personnel.
Biggest changeIf these customers, or any of our other major customers, reduces the amount they purchase, stops purchasing our products or fails to pay us, our financial position and operating results will suffer. 17 Table of Contents ● We cannot assure you that our ongoing evaluation of strategic alternatives will result in any particular outcome, and the perceived uncertainties related to GSI Technology could adversely affect our business and our shareholders. ● We depend upon the sale of our Very Fast SRAMs for most of our revenues while we transform the focus of our business to the sale of in-place associative computing products and services, and a downturn in demand for Very Fast SRAM products or inability to achieve our revenue goals for our new in-place associative computing products and services may cause us to experience cash shortfalls that would harm our business and our future prospects. ● Our future success is substantially dependent on the successful introduction of new in-place associative computing products which entails significant risks. ● Higher interest rates, worldwide inflationary pressures, tariffs and trade disputes, increasing geopolitical tensions, the evolving conflict in Israel, the military conflict in Ukraine, and the decline in the global economic environment may adversely affect our revenues, results of operations and financial condition. ● We have incurred significant losses and may incur losses in the future. ● If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected. ● If we determine that our goodwill and intangible assets have become impaired, we may incur impairment charges, which would negatively impact our operating results. ● We are dependent on a number of single source suppliers. ● If we do not successfully develop new products to respond to rapid market changes due to changing technology and evolving industry standards, particularly in the networking and telecommunications markets, our business will be harmed. ● If we are unable to offset increased wafer fabrication and assembly costs, our gross margins will suffer. ● We are subject to the highly cyclical nature of the networking and telecommunications markets. ● We rely heavily on distributors and our business will be negatively impacted if we are unable to develop and manage distribution channels and accurately forecast future sales through our distributors. ● We are substantially dependent on the continued services of our senior management and other key personnel.
Conducting business outside of the United States subjects us to additional risks and challenges, including: ● potential political and economic instability in, or armed conflicts that involve or affect, the countries in which we, our customers and our suppliers are located; ● uncertainties regarding taxes, tariffs, quotas, export controls and license requirements, trade wars, policies that favor domestic companies over nondomestic companies, including government efforts to provide for the development and growth of local competitors, and other trade barriers; ● heightened price sensitivity from customers in emerging markets; ● compliance with a wide variety of foreign laws and regulations and unexpected changes in these laws and regulations; ● fluctuations in freight rates and transportation disruptions; ● difficulties and costs of staffing and managing personnel, distributors and representatives across different geographic areas and cultures, including assuring compliance with the U.S.
Conducting business outside of the United States subjects us to additional risks and challenges, including: ● uncertainties regarding taxes, tariffs, quotas, export controls and license requirements, trade wars, policies that favor domestic companies over nondomestic companies, including government efforts to provide for the development and growth of local competitors, and other trade barriers; ● potential political and economic instability in, or armed conflicts that involve or affect, the countries in which we, our customers and our suppliers are located; ● heightened price sensitivity from customers in emerging markets; ● compliance with a wide variety of foreign laws and regulations and unexpected changes in these laws and regulations; ● fluctuations in freight rates and transportation disruptions; ● difficulties and costs of staffing and managing personnel, distributors and representatives across different geographic areas and cultures, including assuring compliance with the U.S.
If we fail to continue to sell to our key OEM customers, distributors or contract manufacturers in sufficient quantities, our business could be harmed. We cannot assure you that our evaluation of strategic alternatives will result in any particular outcome, and the perceived uncertainties related to the Company could adversely affect our business and our stockholders.
If we fail to continue to sell to our key OEM customers, distributors or contract manufacturers in sufficient quantities, our business could be harmed. We cannot assure you that our ongoing evaluation of strategic alternatives will result in any particular outcome, and the perceived uncertainties related to the Company could adversely affect our business and our stockholders.
We expect that future direct and indirect sales to Nokia and our other key OEM customers will continue to fluctuate significantly on a quarterly basis and that such fluctuations may substantially affect our operating results in future periods.
We expect that future direct and indirect sales to KYEC and Nokia and our other key OEM customers will continue to fluctuate significantly on a quarterly basis and that such fluctuations may substantially affect our operating results in future periods.
The trading price of our common stock may fluctuate significantly in response to a number of factors, some of which are beyond our control, including: ● the establishment of a market for our new associative computing products; ● actual or anticipated declines in operating results; ● changes in financial estimates or recommendations by securities analysts; ● the institution of legal proceedings against us or significant developments in such proceedings; 33 Table of Contents ● announcements by us or our competitors of financial results, new products, significant technological innovations, contracts, acquisitions, strategic relationships, joint ventures, capital commitments or other events; ● changes in industry estimates of demand for Very Fast SRAM, RadHard and RadTolerant products; ● the gain or loss of significant orders or customers; ● recruitment or departure of key personnel; and ● market conditions in our industry, the industries of our customers and the economy as a whole.
The trading price of our common stock may fluctuate significantly in response to a number of factors, some of which are beyond our control, including: ● the establishment of a market for our new associative computing products; ● announcements by us or our competitors of financial results, new products, significant technological innovations, contracts, acquisitions, strategic relationships, joint ventures, capital commitments or other events; ● actual or anticipated declines in operating results; ● the institution of legal proceedings against us or significant developments in such proceedings; ● changes in industry estimates of demand for Very Fast SRAM, RadHard and RadTolerant products; ● the gain or loss of significant orders or customers; ● recruitment or departure of key personnel; ● changes in financial estimates or recommendations by securities analysts; and ● market conditions in our industry, the industries of our customers and the economy as a whole.
In addition, in connection with any future acquisitions or investments we may make, we face numerous other risks, including: ● difficulties in integrating operations, technologies, products and personnel; ● diversion of financial and managerial resources from existing operations; ● risk of overpaying for or misjudging the strategic fit of an acquired company, asset or technology; ● problems or liabilities stemming from defects of an acquired product or intellectual property litigation that may result from offering the acquired product in our markets; 28 Table of Contents ● challenges in retaining key employees to maximize the value of the acquisition or investment; ● inability to generate sufficient return on investment; ● incurrence of significant one-time write-offs; and ● delays in customer purchases due to uncertainty.
In addition, in connection with any future acquisitions or investments we may make, we face numerous other risks, including: ● difficulties in integrating operations, technologies, products and personnel; ● diversion of financial and managerial resources from existing operations; ● risk of overpaying for or misjudging the strategic fit of an acquired company, asset or technology; ● problems or liabilities stemming from defects of an acquired product or intellectual property litigation that may result from offering the acquired product in our markets; ● challenges in retaining key employees to maximize the value of the acquisition or investment; ● inability to generate sufficient return on investment; ● incurrence of significant one-time write-offs; and ● delays in customer purchases due to uncertainty.
Other challenges that we face include: ● our products may become obsolete upon the introduction of alternative technologies; ● we may incur substantial costs if we need to modify our products to respond to these alternative technologies; ● we may not have sufficient resources to develop or acquire new technologies or to introduce new products capable of competing with future technologies; ● new products that we develop may not successfully integrate with our end-users’ products into which they are incorporated; ● we may be unable to develop new products that incorporate emerging industry standards; ● we may be unable to develop or acquire the rights to use the intellectual property necessary to implement new technologies; and ● when introducing new or enhanced products, we may be unable to effectively manage the transition from older products.
Other challenges that we face include: ● our products may become obsolete upon the introduction of alternative technologies; ● we may incur substantial costs if we need to modify our products to respond to these alternative technologies; 24 Table of Contents ● we may not have sufficient resources to develop or acquire new technologies or to introduce new products capable of competing with future technologies; ● new products that we develop may not successfully integrate with our end-users’ products into which they are incorporated; ● we may be unable to develop new products that incorporate emerging industry standards; ● we may be unable to develop or acquire the rights to use the intellectual property necessary to implement new technologies; and ● when introducing new or enhanced products, we may be unable to effectively manage the transition from older products.
For example, political instability or restrictions on transportation logistics for our products resulting from changes in the relationship among the United States, Taiwan and the People’s Republic of China could negatively impact our 31 Table of Contents business. Any significant armed conflict related to this matter would be expected to materially and adversely damage our business.
For example, 32 Table of Contents political instability or restrictions on transportation logistics for our products resulting from changes in the relationship among the United States, Taiwan and the People’s Republic of China could negatively impact our business. Any significant armed conflict related to this matter would be expected to materially and adversely damage our business.
Our Very Fast SRAM products are incorporated into routers, switches, wireless local area network infrastructure equipment, wireless base stations and network access equipment used in the highly cyclical networking and telecommunications markets. We expect that the networking and telecommunications markets will 24 Table of Contents continue to be highly cyclical, characterized by periods of rapid growth and contraction.
Our Very Fast SRAM products are incorporated into routers, switches, wireless local area network infrastructure equipment, wireless base stations and network access equipment used in the highly cyclical networking and telecommunications markets. We expect that the networking and telecommunications markets will continue to be highly cyclical, characterized by periods of rapid growth and contraction.
Activist stockholders or others may create perceived uncertainties as to the future direction of our business or strategy which may be exploited by our competitors and may make it more difficult to attract and retain qualified personnel and potential customers, and may affect our relationships with current customers, vendors, investors, and other third parties.
Activist stockholders or others may create perceived uncertainties as to the future direction of our business or strategy which may be exploited by our competitors and may make it more difficult to attract and retain qualified 28 Table of Contents personnel and potential customers, and may affect our relationships with current customers, vendors, investors, and other third parties.
We are dependent on our relationships with TSMC to transition successfully to smaller geometry process 30 Table of Contents technologies and to more advanced manufacturing processes. If we or TSMC experience significant delays in this transition or fail to implement these transitions, our business, financial condition and results of operations could be materially and adversely affected.
We are dependent on our relationships with TSMC to transition successfully to smaller geometry process technologies and to more advanced manufacturing processes. If we or TSMC experience significant delays in this transition or fail to implement these transitions, our business, financial condition and results of operations could be materially and adversely affected.
We therefore believe that period-to-period comparisons of our operating results are not a good indication of our future performance, and you should not rely on them to predict our future performance or the future performance of our stock price. Furthermore, if our operating expenses exceed our expectations, our financial performance could be adversely affected.
We therefore believe that period-to-period comparisons of our operating results are not a good indication of our future performance, and you should not rely on them to predict our future performance or the 19 Table of Contents future performance of our stock price. Furthermore, if our operating expenses exceed our expectations, our financial performance could be adversely affected.
We do not have long-term contracts with Nokia or any of our other major OEM customers, distributors or contract manufacturers that obligate them to purchase our products.
We do not have long-term contracts with KYEC and Nokia or any of our other major OEM customers, distributors or contract manufacturers that obligate them to purchase our products.
Our ability to increase our net revenues and maintain our gross 25 Table of Contents margins despite a decline in the average selling prices of our products will depend on a variety of factors, including our ability to introduce lower cost versions of our existing products, increase unit sales volumes of these products, and introduce new products with higher prices and greater margins.
Our ability to increase our net revenues and maintain our gross margins despite a decline in the average selling prices of our products will depend on a variety of factors, including our ability to introduce lower cost versions of our existing products, increase unit sales volumes of these products, and introduce new products with higher prices and greater margins.
Our sales cycle can take up to 24 months to complete, 27 Table of Contents and because of this lengthy sales cycle, we may experience a delay between increasing expenses for research and development and our sales and marketing efforts and the generation of volume production revenues, if any, from these expenditures.
Our sales cycle can take up to 24 months to complete, and because of this lengthy sales cycle, we may experience a delay between increasing expenses for research and development and our sales and marketing efforts and the generation of volume production revenues, if any, from these expenditures.
In addition, if we issue equity securities, our stockholders may experience dilution or the new equity securities may have rights, preferences or privileges senior to those of our common stock. Our executive officers, directors and entities affiliated with them hold a substantial percentage of our common stock.
In addition, if we issue equity securities, our stockholders may experience dilution or the new equity securities may have rights, preferences or privileges senior to those of our common stock. 35 Table of Contents Our executive officers, directors and entities affiliated with them hold a substantial percentage of our common stock.
We may not be able to adjust our spending quickly if our revenues fall short of our 19 Table of Contents expectations. If this were to occur, our operating results would be harmed. If our operating results in future quarters fall below the expectations of market analysts and investors, the price of our common stock could fall.
We may not be able to adjust our spending quickly if our revenues fall short of our expectations. If this were to occur, our operating results would be harmed. If our operating results in future quarters fall below the expectations of market analysts and investors, the price of our common stock could fall.
If any of these customers do not pay us, our financial position and operating results will be harmed. Generally, we do not require collateral from our customers. Demand for our products may decrease if our OEM customers experience difficulty manufacturing, marketing or selling their products.
If any of these customers do not pay us, our financial position and operating results will be harmed. Generally, we do not require collateral from our customers. 27 Table of Contents Demand for our products may decrease if our OEM customers experience difficulty manufacturing, marketing or selling their products.
As a result, the market price of our common stock and the voting and other rights of our 34 Table of Contents stockholders might be adversely affected. The issuance of preferred stock might result in the loss of voting control to other stockholders. We have no current plans to issue any shares of preferred stock.
As a result, the market price of our common stock and the voting and other rights of our stockholders might be adversely affected. The issuance of preferred stock might result in the loss of voting control to other stockholders. We have no current plans to issue any shares of preferred stock.
There can be no assurance that our Very Fast SRAMs will continue to receive broad market acceptance, that our new product development initiatives will be successful or that we will be able to achieve sustained revenue growth or profitability. We identified a material weakness in our internal control over financial reporting in the past.
There can be no assurance that our Very Fast SRAMs will continue to receive 22 Table of Contents broad market acceptance, that our new product development initiatives will be successful or that we will be able to achieve sustained revenue growth or profitability. We identified a material weakness in our internal control over financial reporting in the past.
The occurrence of an earthquake, typhoon or other natural disaster near the fabrication facilities of TSMC or our other independent suppliers could result in damage, power outages and other disruptions that impair their production and assembly 32 Table of Contents capacity.
The occurrence of an earthquake, typhoon or other natural disaster near the fabrication facilities of TSMC or our other independent suppliers could result in damage, power outages and other disruptions that impair their production and assembly capacity.
We expect that our operating results in any given period will continue to depend significantly on orders from our key OEM customers, particularly Nokia, and our future success is dependent to a large degree on the business success of this customer over which we have no control.
We expect that our operating results in any given period will continue to depend significantly on orders from our key OEM customers, particularly KYEC and Nokia, and our future success is dependent to a large degree on the business success of these customers over which we have no control.
The failure to recruit and retain necessary technical, managerial, sales, marketing and administrative personnel could harm our business and our ability to obtain new customers and develop new products. Claims that we infringe third party intellectual property rights could seriously harm our business and require us to incur significant costs.
The failure to recruit and retain necessary technical, managerial, sales, marketing and administrative personnel could harm our business and our ability to obtain new customers and develop new products. 29 Table of Contents Claims that we infringe third party intellectual property rights could seriously harm our business and require us to incur significant costs.
However, there can be no assurance that remedial measures will continue to operate or that they will prevent other control deficiencies or material weaknesses in our control over financial reporting in the future. 21 Table of Contents We are a non-accelerated filer.
However, there can be no assurance that remedial measures will continue to operate or that they will prevent other control deficiencies or material weaknesses in our control over financial reporting in the future. We are a non-accelerated filer.
This ongoing project involves the commercialization of new, cutting-edge technology, will require a continuing substantial effort during fiscal 2025 and will be subject to significant risks.
This ongoing project involves the commercialization of new, cutting-edge technology, will require a continuing substantial effort during fiscal 2026 and beyond and will be subject to significant risks.
As of March 31, 2023 and 2024, we had a goodwill balance of $8.0 million and intangible assets of $1.8 million and $1.6 million at March 31, 2023 and 2024, respectively, from the MikaMonu acquisition.
As of March 31, 2024 and 2025, we had a goodwill balance of $8.0 million and intangible assets of $1.6 million and $1.3 million at March 31, 2024 and March 31, 2025, respectively, from the MikaMonu acquisition.
Higher interest rates, worldwide inflationary pressures, the evolving conflict in Israel, the military conflict in Ukraine, and the decline in the global economic environment have caused increased stock market volatility and uncertainty in customer demand and the worldwide economy in general, and we may continue to experience decreased sales and revenues in the future.
Higher interest rates, worldwide inflationary pressures, tariffs and trade disputes, increasing geopolitical tensions, the evolving conflict in Israel, the military conflict in Ukraine, and the decline in the global economic environment have caused increased stock market volatility and uncertainty in customer demand and the worldwide economy in general, and we may continue to experience decreased sales and revenues in the future.
If we are unable to recruit or retain qualified personnel, our business could be harmed. ● Cyber-attacks and systems integration issues could disrupt our operations or the operations of our partners and result in reduced revenue, increased costs, liability claims, reputational harm. ● Demand for our products may decrease if our OEM customers experience difficulty manufacturing, marketing or selling their products. ● Our products have lengthy sales cycles that make it difficult to plan our expenses and forecast results. ● Our business could be negatively affected as a result of actions of activist stockholders or others. ● Our acquisition of companies or technologies could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our operating results. ● Our business will suffer if we are unable to protect our intellectual property or if there are claims that we infringe third party intellectual property rights. ● Any significant order cancellations or order deferrals could adversely affect our operating results. ● If our business grows, such growth may place a significant strain on our management and operations.
If we are unable to recruit or retain qualified personnel, our business could be harmed. ● Systems issues, data protection and cyber-attacks could disrupt our internal operations or the operations of our business partners, and any such disruption could harm our business. ● Demand for our products may decrease if our OEM customers experience difficulty manufacturing, marketing or selling their products. ● Our products have lengthy sales cycles that make it difficult to plan our expenses and forecast results. ● Our business could be negatively affected as a result of actions of activist stockholders or others. ● Our acquisition of companies or technologies could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our operating results. ● Our business will suffer if we are unable to protect our intellectual property or if there are claims that we infringe third party intellectual property rights. ● Any significant order cancellations or order deferrals could adversely affect our operating results. 18 Table of Contents ● If our business grows, such growth may place a significant strain on our management and operations.
These provisions could also have the effect of discouraging others from making tender offers for our common stock. As a result, these provisions might prevent the market price of our common stock from increasing substantially in response to actual or rumored takeover attempts. These provisions might also prevent changes in our management.
These provisions could also have the effect of discouraging others from making tender offers for our common stock. As a result, these provisions might prevent the market price of our common stock from increasing substantially in response to actual or rumored takeover attempts. These provisions might also prevent changes in our management. Item 1B. Unresolved Staff Comments None.
Our products are used as components in our OEM customers’ products, including routers, switches and other networking and telecommunications products.
Our products are used as components in our OEM customers’ products, including test and measurement equipment, routers, switches and other networking and telecommunications products.
As of May 31, 2024 , our executive officers, directors and entities affiliated with them beneficially owned approximately 33% of our outstanding common stock.
As of May 31, 2025 , our executive officers, directors and entities affiliated with them beneficially owned approximately 26% of our outstanding common stock.
Disruptions in the capital and financial markets as a result of higher interest rates, worldwide inflationary pressures, the evolving conflict in the Middle East, the military conflict in Ukraine, and the decline in the global economic environment may also adversely affect our ability to obtain additional liquidity should the impacts of a decline in the global economic environment continue for a prolonged period.
Disruptions in the capital and financial markets as a result of higher interest rates, tariffs and trade disputes, worldwide inflationary pressures, increasing geopolitical tensions, the evolving conflict in Israel, the military conflict in Ukraine, and the decline in the global economic environment may also adversely affect our ability to obtain additional liquidity should the impacts of a decline in the global economic environment continue for a prolonged period.
These risks include, but are not limited to: Risks Related to Our Business and Financial Condition ● Unpredictable fluctuations in our operating results could cause our stock price to decline. ● Our largest OEM customer accounts for a significant percentage of our net revenues.
These risks include, but are not limited to: Risks Related to Our Business and Financial Condition ● Unpredictable fluctuations in our operating results could cause our stock price to decline. ● KYEC and Nokia account for a significant percentage of our net revenues.
If a successful claim is made against us or any of our customers and a license is not made available to us on commercially reasonable terms or we are required to pay substantial damages or awards, our business, financial condition and results of operations would be materially adversely affected. 29 Table of Contents Our business will suffer if we are unable to protect our intellectual property.
If a successful claim is made against us or any of our customers and a license is not made available to us on commercially reasonable terms or we are required to pay substantial damages or awards, our business, financial condition and results of operations would be materially adversely affected.
For example, in the twelve fiscal quarters ended March 31, 2024, we recorded net revenues of as much as $9.0 million and as little as $5.2 million, and operating losses from $2.9 million to $6.7 million.
For example, in the twelve fiscal quarters ended March 31, 2025, we recorded net revenues of as much as $9.0 million and as little as $4.6 million, and in eleven of those quarters, operating losses from $2.3 million to $6.7 million.
If a customer refuses to accept shipped products or does not pay for these products, we could miss future revenue projections or incur significant charges against our income, which could materially and adversely affect our operating results.
We generally recognize revenue upon shipment of products to a customer. 30 Table of Contents If a customer refuses to accept shipped products or does not pay for these products, we could miss future revenue projections or incur significant charges against our income, which could materially and adversely affect our operating results.
Any significant cancellations or deferrals in the future could materially and adversely affect our business, financial condition and results of operations. Cancellations or deferrals could cause us to hold excess inventory, which could reduce our profit margins, increase product obsolescence and restrict our ability to fund our operations. We generally recognize revenue upon shipment of products to a customer.
Any significant cancellations or deferrals in the future could materially and adversely affect our business, financial condition and results of operations. Cancellations or deferrals could cause us to hold excess inventory, which could reduce our profit margins, increase product obsolescence and restrict our ability to fund our operations.
A small number of customers generally account for a significant portion of our accounts receivable in any period, and if any one of them fails to pay us, our financial position and operating results will suffer. At March 31, 2024, three customers accounted for 46%, 18% and 14% of our accounts receivable, respectively.
A small number of customers generally account for a significant portion of our accounts receivable in any period, and if any one of them fails to pay us, our financial position and operating results will suffer. At March 31, 2025, two customers accounted for 56% and 29% of our accounts receivable, respectively.
Our business is expected to be materially adversely affected by higher interest rates, worldwide inflationary pressures, the evolving conflict in the Middle East and the military conflict in Ukraine, all of which are contributing to a decline in the global economic environment.
Our business is expected to be materially adversely affected by higher interest rates, tariffs and trade disputes, worldwide inflationary pressures, increasing geopolitical tensions, the evolving conflict in Israel and the military conflict in Ukraine, all of which are contributing to a decline in the global economic environment.
We have incurred significant losses and may incur losses in the future. We have incurred significant losses. We incurred net losses of $20.1 million, $16.0 million and $16.4 million during fiscal 2024, 2023 and 2022, respectively.
We have incurred significant losses and may incur losses in the future. We have incurred significant losses. We incurred net losses of $10.6 million, $20.1 million and $16.0 million during fiscal 2025, 2024 and 2023.
Our largest OEM customer accounts for a significant percentage of our net revenues. If this customer, or any of our other major customers, reduces the amount they purchase or stop purchasing our products, our operating results will suffer. Nokia, our largest customer, purchases our products directly from us and through contract manufacturers and distributors.
KYEC and Nokia account for a significant percentage of our net revenues. If these customers, or any of our other major customers, reduces the amount they purchase or stop purchasing our products, our operating results will suffer. KYEC purchases products through contract manufacturers and distributors.
We expect that a continued rise in interest rates, continued inflationary pressures, the evolving conflict in the Middle East , continued uncertainties in the business climate caused by the military conflict in Ukraine and related fluctuations in energy prices will adversely impact demand for new and existing products, and to impact the mindset of potential commercial partners to launch new products using GSI’s technology.
We expect that a continued rise in interest rates, tariffs and trade disputes, continued inflationary pressures, increasing geopolitical tensions, the evolving conflict in Israel , continued uncertainties in the business climate caused by the military conflict in Ukraine will adversely impact demand for new and existing products, and to impact the mindset of potential commercial partners to launch new products using our technology.
Any decrease in revenues from sales of our Very Fast SRAM products or failure to achieve the revenue goals for our in-place associative computing products and services could result in revenue shortfalls that would leave our business with inadequate cash to finance operations. 22 Table of Contents Our future success is substantially dependent on the successful introduction of new in-place associative computing products which entails significant risks.
Any decrease in revenues from sales of our Very Fast SRAM products or failure to achieve the revenue goals for our 21 Table of Contents in-place associative computing products and services could result in revenue shortfalls that would leave our business with inadequate cash to finance operations.
At this time, the impact on GSI Technology is uncertain and subject to change given the volatile nature of the situation, but adverse changes in the military conditions in Israel could harm our business and our stock price could decline. Changes in Taiwan’s political, social and economic environment may affect our business performance.
At this time, the impact on GSI Technology is uncertain and subject to change given the volatile nature of the situation, but adverse changes in the military conditions in Israel could harm our business and our stock price could decline. Our international business exposes us to additional risks.
Our ability to compete successfully in this market depends on factors both within and outside of our control, including: ● real or perceived imbalances in supply and demand of Very Fast SRAMs; ● the rate at which OEMs incorporate our products into their systems; ● the success of our customers’ products; ● the price of our competitors’ products relative to the price of our products; ● our ability to develop and market new products; and ● the supply and cost of wafers.
Our ability to compete successfully in this market depends on factors both within and outside of our control, including: ● real or perceived imbalances in supply and demand of Very Fast SRAMs; ● the rate at which OEMs incorporate our products into their systems; ● the success of our customers’ products; ● the price of our competitors’ products relative to the price of our products; ● our ability to develop and market new products; and ● the supply and cost of wafers. 25 Table of Contents In fiscal 2022 and 2023 we experienced increases of 20% and 6%, respectively, in wafer fabrication costs due to supply chain constraints, which resulted in us increasing the cost of our products.
System security risks, data protection, cyber-attacks and systems integration issues could disrupt our internal operations or the operations of our business partners, and any such disruption could harm our reputation or cause a reduction in our expected revenue, increase our expenses, negatively impact our results of operation or otherwise adversely affect our stock price.
We do not have employment contracts with, nor maintain key person insurance on, any of our executive officers or other key employees. 26 Table of Contents System security risks, data protection, cyber-attacks and systems integration issues could disrupt our internal operations or the operations of our business partners, and any such disruption could harm our reputation or cause a reduction in our expected revenue, increase our expenses, negatively impact our results of operation or otherwise adversely affect our stock price.
Since we sell through multiple channels and distribution networks, we may have to resolve potential conflicts between these channels. For example, these conflicts may result from the different discount levels offered by multiple channel distributors to their customers or, potentially, from our direct sales force targeting the same equipment manufacturer accounts as our indirect channel distributors.
For example, these conflicts may result from the different discount levels offered by multiple channel distributors to their customers or, potentially, from our direct sales force targeting the same equipment manufacturer accounts as our indirect channel distributors. These conflicts may harm our business or reputation.
Since 2015, our principal strategic objective has been the development of our first in-place associative computing product. We have devoted, and will continue to devote, substantial efforts and resources to the development of our new family of in-place associative computing products.
Our future success is substantially dependent on the successful introduction of new in-place associative computing products which entails significant risks. Since 2015, our principal strategic objective has been the development of our in-place associative computing products. We have devoted, and will continue to devote, substantial efforts and resources to the development of our new family of in-place associative computing products.
Our quarterly revenues have been flat and trended downward in the past year due to the decline in the global economic environment that has resulted in less demand for GSI’s products.
Our quarterly revenues have been flat and other than the quarters ended December 31, 2024 and March 31, 2025, have trended downward due to the decline in the global economic environment that has resulted in less demand for our products.
We are closely monitoring developments in the evolving military conflict with Hamas that began on October 7, 2023 including potential impacts to our business, customers, employees and operations in Israel.
Proof of concept customers for our SAR imagine processing acceleration system are also based in Israel. We are closely monitoring the evolving military conflict in Israel that began on October 7, 2023, including potential impacts to our business, customers, employees and operations in Israel.
Our success and ability to compete depends in large part upon protecting our proprietary technology. We rely on a combination of patent, trade secret, copyright and trademark laws and non-disclosure and other contractual agreements to protect our proprietary rights. These agreements and measures may not be sufficient to protect our technology from third-party infringement.
Our business will suffer if we are unable to protect our intellectual property. Our success and ability to compete depends in large part upon protecting our proprietary technology. We rely on a combination of patent, trade secret, copyright and trademark laws and non-disclosure and other contractual agreements to protect our proprietary rights.
Domestic budget considerations may also adversely affect our operating results. For example, if governmental appropriations for military purchases of electronic devices that include our products are reduced, our revenues will likely decline. Risks Relating to Our Common Stock and the Securities Market The trading price of our common stock is subject to fluctuation and is likely to be volatile.
Domestic budget considerations may also adversely affect our operating results. For example, if governmental appropriations for military purchases of electronic devices that include our products are reduced, our revenues will likely decline.
Since the manufacturing of wafers and other components is extremely complex, the process of qualifying new foundries and suppliers is a lengthy process and there is no assurance that we would be able to find and qualify another supplier without materially adversely affecting our business, financial condition and results of operations. 23 Table of Contents If we do not successfully develop new products to respond to rapid market changes due to changing technology and evolving industry standards, particularly in the networking and telecommunications markets, our business will be harmed.
Since the manufacturing of wafers and other components is extremely complex, the process of qualifying new foundries and suppliers is a lengthy process and there is no assurance that we would be able to find and qualify another supplier without materially adversely affecting our business, financial condition and results of operations.
Our Vice President, Associative Computing, along with a team of software development experts are based in our Israel facility. This team is needed for the development of the various levels of software required in the use of our APU product offering. Proof of concept customers for our SAR imagine processing acceleration system are also based in Israel.
Our software development and certain regional sales activities for our APU product offerings occur in Israel. Our Vice President, Associative Computing, along with a team of software development experts are based in our Israel facility. This team is needed for the development of software required in the use of our APU product offering.
This could result in distributors returning unsold inventory to us, or in us not having sufficient inventory to meet the demand for our products. If we are not able to accurately forecast sales through our distributors or effectively manage our relationships with our distributors, our business and financial results will suffer.
If we are not able to accurately forecast sales through our distributors or effectively manage our relationships with our distributors, our business and financial results will suffer.
However, a portion of our cost of revenues and our operating expenses is denominated in currencies other than the U.S. dollar, primarily the New Taiwanese dollar and Israeli Shekel. As a result, appreciation or depreciation of other currencies in relation to the U.S. dollar could result in transaction gains or losses that could impact our operating results.
However, a portion of our cost of revenues and our operating expenses is denominated in currencies other than the U.S. dollar, primarily the New Taiwanese dollar and 33 Table of Contents Israeli Shekel.
We are dependent on a number of single source suppliers, and if we fail to obtain adequate supplies, our business will be harmed and our prospects for growth will be curtailed. We currently purchase several key components used in the manufacture of our products from single sources and are dependent upon supply from these sources to meet our needs.
We currently purchase several key components used in the manufacture of our products from single sources and are dependent upon supply from these sources to meet our needs.
We may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptive and resource-intensive than originally anticipated.
We may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptive and resource-intensive than originally anticipated. Such disruptions could adversely impact our ability to attract and retain customers, fulfill orders and interrupt other processes and could adversely affect our business, financial results, stock price and reputation.
We will incur similar expenses in the future as we continue to transition our products to smaller geometry processes. The costs inherent in the transition to new manufacturing process technologies will adversely affect our operating results and our gross margin.
We will incur similar expenses in the future as we continue to transition our products to smaller geometry processes.
These conflicts may harm our business or reputation. The average selling prices of our products are expected to decline, and if we are unable to offset these declines, our operating results will suffer. Historically, the average unit selling prices of our products have declined substantially over the lives of the products, and we expect this trend to continue.
The average selling prices of our products could decline, and if we are unable to offset these declines, our operating results will suffer. Historically, the average unit selling prices of our products have declined substantially over the lives of the products. A reduction in overall average selling prices of our products could result in reduced revenues and lower gross margins.
Risks Related to Our International Business and Operations The software development for our associative computing products occurs in Israel, and therefore our business performance and operations may be adversely affected by military conflict in Israel. Our software development and certain regional sales activities for our APU product offerings occur in Israel.
If any of these changes were to occur, our business could be harmed, and our stock price could decline. The software development for our associative computing products occurs in Israel, and therefore our business performance and operations may be adversely affected by military conflict in Israel.
Our products are complex to design and manufacture and could contain defects, which could reduce revenues or result in claims against us. We develop complex products. Despite testing by us and our OEM customers, design or manufacturing errors may be found in existing or new products.
Despite testing by us and our OEM customers, design or manufacturing errors may be found in existing or new products. These defects could result in a delay in recognition or loss of revenues, loss of market share or failure to achieve market acceptance.
Risks Related to Our International Business and Operations ● The international political, social and economic environment, including the risks for escalating military conflicts, particularly relating to Israel and Taiwan, may affect our business performance. ● Certain of our independent suppliers and OEM customers have operations in the Pacific Rim, an area subject to significant risk of natural disasters and outbreak of contagious diseases. ● The United States could materially modify certain international trade agreements, or change tax provisions related to the global manufacturing and sales of our products. ● Some of our products are incorporated into advanced military electronics, and changes in international geopolitical circumstances and domestic budget considerations may hurt our business. 18 Table of Contents Risks Relating to Our Common Stock and the Securities Market ● The trading price of our common stock is subject to fluctuation and is likely to be volatile. ● We may need to raise additional capital in the future, which may not be available on favorable terms or at all, and which may cause dilution to existing stockholders. ● Our executive officers, directors and their affiliates hold a substantial percentage of our common stock. ● The provisions of our charter documents might inhibit potential acquisition bids that a stockholder might believe are desirable, and the market price of our common stock could be lower as a result.
Risks Relating to Our Common Stock and the Securities Market ● The trading price of our common stock is subject to fluctuation and is likely to be volatile. ● We may need to raise additional capital in the future, which may not be available on favorable terms or at all, and which may cause dilution to existing stockholders. ● Our executive officers, directors and their affiliates hold a substantial percentage of our common stock. ● The provisions of our charter documents might inhibit potential acquisition bids that a stockholder might believe are desirable, and the market price of our common stock could be lower as a result.
This process involves the exercise of judgment and use of assumptions as to future uncertainties, including end user demand. Inventory levels of our products held by our distributors may exceed or fall below the levels we consider desirable on a going-forward basis.
Inventory levels of our products held by our distributors may exceed or fall below the levels we consider desirable on a going-forward basis. This could result in distributors returning unsold inventory to us, or in us not having sufficient inventory to meet the demand for our products.
Our financial results, quarterly product sales, trends and comparisons are affected by fluctuations in the buying patterns of the OEMs that purchase our products from our distributors. While we attempt to assist our distributors in maintaining targeted stocking levels of our products, we may not consistently be accurate or successful.
We may be unable to accurately forecast future sales through our distributors, which could harm our ability to efficiently manage our resources to match market demand. Our financial results, quarterly product sales, trends and comparisons are affected by fluctuations in the buying patterns of the OEMs that purchase our products from our distributors.
Moreover, a substantial portion of our products is manufactured and tested in Taiwan, and the software development for our associative computing products occurs in Israel where there is an evolving military conflict with Hamas. We intend to continue expanding our international business in the future.
Products shipped to destinations outside of the United States accounted for 60.3%, 47.3% and 51.4% of our net revenues in fiscal 2025, 2024 and 2023, respectively. Moreover, a substantial portion of our products is manufactured and tested in Taiwan, and the software development for our associative computing products occurs in Israel where there is an evolving military conflict.
We do not maintain sufficient business interruption and other insurance policies to compensate us for all losses that may occur. Any losses or damages incurred by us as a result of a catastrophic event or any other significant uninsured loss in excess of our insurance policy limits could have a material adverse effect on our business.
Any losses or damages incurred by us as a result of a catastrophic event or any other significant uninsured loss in excess of our insurance policy limits could have a material adverse effect on our business. 34 Table of Contents Risks Relating to Our Common Stock and the Securities Market The trading price of our common stock is subject to fluctuation and is likely to be volatile.
Purchases by Nokia represented approximately 21%, 17% and 29% of our net revenues in fiscal 2024, 2023 and 2022, respectively.
Based on information provided to us by Nokia’s contract manufacturers and distributors, purchases by Nokia represented approximately 12%, 21% and 17% of our net 20 Table of Contents revenues in fiscal 2025, 2024 and 2023, respectively.
Our customers may decide to purchase products from our competitors rather than accept these price increases and our business may suffer. There can be no assurance that we will be able to compete successfully in the future. Our failure to compete successfully in these or other areas could harm our business.
There can be no assurance that we will be able to compete successfully in the future. Our failure to compete successfully in these or other areas could harm our business. We rely heavily on distributors and our success depends on our ability to develop and manage our indirect distribution channels.
We do not currently engage in currency hedging activities to reduce the risk of financial exposure from fluctuations in foreign exchange rates.
As a result, appreciation or depreciation of other currencies in relation to the U.S. dollar could result in transaction gains or losses that could impact our operating results. We do not currently engage in currency hedging activities to reduce the risk of financial exposure from fluctuations in foreign exchange rates.
In fiscal 2022 and 2023 we experienced increases of 20% and 6%, respectively, in wafer fabrication costs due to supply chain constraints, which resulted in us increasing the cost of our products. Inflationary pressures are expected to result in additional increases in our wafer fabrication costs, which may require us to further increase the cost of our products.
Inflationary pressures are expected to result in additional increases in our wafer fabrication costs, which may require us to further increase the cost of our products. Our customers may decide to purchase products from our competitors rather than accept these price increases and our business may suffer.
Speculation regarding any developments associated with our review of strategic alternatives and any perceived uncertainties related to the Company or its business could cause the price of our shares to fluctuate significantly. 20 Table of Contents Higher interest rates, worldwide inflationary pressures, the evolving conflict in the Middle East, the military conflict in Ukraine, and the resulting decline in the global economic environment are expected to adversely affect our revenues, results of operations and financial condition.
Higher interest rates, tariffs and trade disputes, worldwide inflationary pressures, increasing geopolitical tensions, the evolving conflict in Israel, the military conflict in Ukraine, and the resulting decline in the global economic environment are expected to adversely affect our revenues, results of operations and financial condition.
For example, in fiscal 2024, 2023 and 2022, our largest distributor Avnet Logistics accounted for 50.6%, 48.1% and 38.0%, respectively, of our net revenues. Avnet Logistics and our other existing distributors may choose to devote greater resources to marketing and supporting the products of other companies.
A significant percentage of our sales are made to distributors and to contract manufacturers who incorporate our products into end products for OEMs. For example, in fiscal 2025, 2024 and 2023, our largest distributor Avnet Logistics accounted for 49.6%, 50.6% and 48.1%, respectively, of our net revenues.
We may ultimately determine that no transaction is in the best interest of our stockholders.
We may ultimately determine that no transaction is in the best interest of our stockholders. Speculation regarding any developments associated with our review of strategic alternatives and any perceived uncertainties related to the Company or its business could cause the price of our shares to fluctuate significantly.
Removed
In the fiscal year ended March 31, 2023, we identified sustained declines in our stock price that resulted in our market capitalization being below the carrying value of our stockholders’ equity. We concluded the sustained declines in our stock price were triggering events and proceeded with quantitative goodwill impairment assessments.
Added
Risks Related to Our International Business and Operations ● The international political, social and economic environment, including the imposition of tariffs and resulting consequences and the risks for escalating military conflicts, particularly relating to Israel and Taiwan, may affect our business performance. ● Governmental export and import controls could impair our ability to compete in international markets or subject us to liability if we violate the controls. ● Global trade policy changes, including the imposition of tariffs and the resulting consequences, may adversely impact our business, results of operations and financial condition. ● Certain of our independent suppliers and OEM customers have operations in the Pacific Rim, an area subject to significant risk of natural disasters and outbreak of contagious diseases. ● The United States could materially modify certain international trade agreements, or change tax provisions related to the global manufacturing and sales of our products. ● Some of our products are incorporated into advanced military electronics, and changes in international geopolitical circumstances and domestic budget considerations may hurt our business.
Removed
The results of the quantitative goodwill impairment assessments that we performed indicated the fair value of our sole reporting unit exceeded its carrying value as of December 31, 2022, February 28, 2023 and March 31, 2023 .
Added
Based on information provided to us by KYEC’s contract manufacturers and distributors, purchases by KYEC represented approximately 23%, 3% and 2% of our net revenues in fiscal 2025, 2024 and 2023, respectively. Nokia purchases our products directly from us and through contract manufacturers and distributors.
Removed
We rely heavily on distributors and our success depends on our ability to develop and manage our indirect distribution channels. A significant percentage of our sales are made to distributors and to contract manufacturers who incorporate our products into end products for OEMs.
Added
There were no impairment indicators at March 31, 2024 or 2025. 23 Table of Contents We are dependent on a number of single source suppliers, and if we fail to obtain adequate supplies, our business will be harmed and our prospects for growth will be curtailed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe employ a range of tools and services, including regular network and endpoint monitoring and vulnerability assessments to inform our professionals’ risk identification and assessment. We manage these known risks by using internal security controls designed to align with standards set the International Organization for Standardization (“ISO”).
Biggest changeWe employ a range of tools and services, including regular network and endpoint monitoring and vulnerability assessments to inform our professionals’ risk identification and assessment. 36 Table of Contents We manage these known risks by using internal security controls designed to align with standards set the International Organization for Standardization (“ISO”).
The Board as a whole and through the various Board committees oversees the Company’s management 36 Table of Contents of material enterprise level risk, focusing on four areas of risk: strategic, compliance, operational, and financial. To fulfill its oversight responsibility, the Board also regularly reviews, consults, and discusses with management on strategic direction, challenges, and risks faced by the Company.
The Board as a whole and through the various Board committees oversees the Company’s management of material enterprise level risk, focusing on four areas of risk: strategic, compliance, operational, and financial. To fulfill its oversight responsibility, the Board also regularly reviews, consults, and discusses with management on strategic direction, challenges, and risks faced by the Company.
As discussed below, members of management report to the Audit Committee which reports to the entire Board about cybersecurity threat risks, among other cybersecurity related matters, at least annually. In support of the Board's oversight of the Company's cybersecurity risk management program, the Audit Committee receives quarterly cybersecurity updates from members of management.
As 37 Table of Contents discussed below, members of management report to the Audit Committee which reports to the entire Board about cybersecurity threat risks, among other cybersecurity related matters, at least annually. In support of the Board's oversight of the Company's cybersecurity risk management program, the Audit Committee receives quarterly cybersecurity updates from members of management.
These risks include, among other things, internal operational risks; system security risks; data protection; risks to proprietary business information; intellectual property theft; fraud; extortion; harm to employees, partners, or customers; violation of privacy or 35 Table of Contents security laws and other litigation and legal risk; and reputational risks.
These risks include, among other things, internal operational risks; system security risks; data protection; risks to proprietary business information; intellectual property theft; fraud; extortion; harm to employees, partners, or customers; violation of privacy or security laws and other litigation and legal risk; and reputational risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also lease space in the United States in the states of Georgia and Texas and in Israel. The aggregate annual gross rent for our leased facilities was approximately $734,000 in fiscal 2024. Item 3. Legal Proceedings None. Item 4. Mine Safety Disclosures Not applicable. 37 Table of Contents PART II
Biggest changeWe also lease space in the United States in the states of Georgia and Texas and in Israel. The aggregate annual gross rent for our leased facilities was approximately $1.8 million in fiscal 2025. Item 3. Legal Proceedings None. Item 4. Mine Safety Disclosures Not applicable. PART II
Item 2. Properties Our executive offices, our principal administration, marketing and sales operations and a portion of our research and development operations are located in a 44,277 square foot facility in Sunnyvale, California, which we purchased in fiscal 2010.
Item 2. Properties Our executive offices, our principal administration, marketing and sales operations and a portion of our research and development operations are located in a 44,277 square foot facility in Sunnyvale, California under a lease expiring in May 2034.
Removed
In April 2024, we entered into an agreement to sell the Sunnyvale facility and, in connection with such sale, agreed that we would enter into a new lease agreement to lease back the applicable property from the purchaser. The closing of the purchase and sale of the Sunnyvale property, and entry into the lease, occurred on June 6, 2024.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 37 ​ ​ ​ PART II ​ 38 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 38 Item 6. Reserved 38 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39
Biggest changeItem 4. Mine Safety Disclosures 38 ​ ​ ​ PART II ​ 38 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 38 Item 6. Reserved 39 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 40

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnder the repurchase program, we may repurchase shares from time to time on the open market or in private transactions. The specific timing and amount of the repurchases will be dependent on market conditions, securities law limitations and other factors. The repurchase program may be suspended or terminated at any time without prior notice.
Biggest changeUnder the repurchase program, we may repurchase shares from time to time on the open market or in private transactions. The specific timing and amount of the repurchases will be dependent on market conditions, securities law limitations and other factors. The repurchase program may be suspended or terminated at any time without prior 38 Table of Contents notice.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information, Holders of Common Stock and Dividends Our common stock is traded on the Nasdaq Global Market under the symbol “GSIT”. On May 31, 2024, there were approximately 21 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information, Holders of Common Stock and Dividends Our common stock is traded on the Nasdaq Global Market under the symbol “GSIT”. On May 31, 2025, there were approximately 17 holders of record of our common stock.
During the quarter ended March 31, 2024, we did not repurchase any of our shares under the repurchase program.
During the quarter ended March 31, 2025, we did not repurchase any of our shares under the repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe also design, develop and market static random access memories, or SRAMs (our current primary revenue source), that operate at speeds of less than 10 nanoseconds, which we refer to as Very Fast SRAMs, primarily for the networking and telecommunications and the military/defense and aerospace markets.
Biggest changeOur revenue is currently generated from the design, development and marketing of static random access memories, or SRAMs, that operate at speeds of less than 10 nanoseconds, which we refer to as Very Fast SRAMs, primarily for the networking and telecommunications, test equipment and the military/defense and aerospace markets We are subject to the highly cyclical nature of the semiconductor industry, which has experienced significant fluctuations, often in connection with fluctuations in demand for the products in which semiconductor devices are used.
Our revenues have been substantially impacted by significant fluctuations in sales to Nokia, and we expect that future direct and indirect sales to Nokia will continue to fluctuate substantially on a quarterly basis and that such fluctuations may significantly affect our operating results in future periods.
Our revenues have been substantially impacted by significant fluctuations in sales to Nokia and KYEC, and we expect that future direct and indirect sales to Nokia and KYEC will continue to fluctuate substantially on a quarterly basis and that such fluctuations may significantly affect our operating results in future periods.
Our Annual Report on Form 10-K for the fiscal year ended March 31, 2023 includes year-over-year comparisons versus the fiscal year ended March 31, 2022 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” ​ Overview We are a provider of high-performance semiconductor memory solutions for in-place associative computing applications in high growth markets such as artificial intelligence and high-performance computing, including natural language processing and computer vision.
Our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 includes year-over-year comparisons versus the fiscal year ended March 31, 2023 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” ​ Overview We are a provider of high-performance semiconductor memory solutions for in-place associative computing applications in high growth markets such as artificial intelligence and high-performance computing, including natural language processing and computer vision.
However, we charge costs related to pre-production mask sets, which are not used in production, to research and development expenses at the time they are incurred. These charges often arise as we transition to new process technologies and, accordingly, 41 Table of Contents can cause research and development expenses to fluctuate on a quarterly basis.
However, we charge 42 Table of Contents costs related to pre-production mask sets, which are not used in production, to research and development expenses at the time they are incurred. These charges often arise as we transition to new process technologies and, accordingly, can cause research and development expenses to fluctuate on a quarterly basis.
We have experienced increased costs as a result of supply chain constraints for wafers and outsourced assembly, burn-in and test operations. We review our manufacturing costs on a regular basis and pass on any cost increases to our customers when it makes sense to do so.
In recent years we have experienced increased costs as a result of supply chain constraints for wafers and outsourced assembly, burn-in and test operations. We review our manufacturing costs on a regular basis and pass on any cost increases to our customers when it makes sense to do so.
The following discussion should be read together with our consolidated financial statements and the related notes included elsewhere in this report. This discussion and analysis generally covers our financial condition and results of operations for the fiscal year ended March 31, 2024, including year-over-year comparisons versus the fiscal year ended March 31, 2023.
The following discussion should be read together with our consolidated financial statements and the related notes included elsewhere in this report. This discussion and analysis generally covers our financial condition and results of operations for the fiscal year ended March 31, 2025, including year-over-year comparisons versus the fiscal year ended March 31, 2024.
Our ability to increase net revenues, therefore, is dependent upon our ability to increase unit sales volumes of existing products and to introduce and sell new products with higher average selling prices in quantities sufficient to compensate for the anticipated declines in selling prices of our more mature products.
If prices decline, our ability to increase net revenues, therefore, is dependent upon our ability to increase unit sales volumes of existing products and to introduce and sell new products with higher average selling prices in quantities sufficient to compensate for the anticipated declines in selling prices of our more mature products.
As of March 31, 2024, none of the revenue targets have been achieved and no revenue based earnout payments have been paid to the former MikaMonu shareholders. The maximum amount of the remaining potential earnout payments totals approximately $30.0 million at March 31, 2024.
As of March 31, 2025, none of the revenue targets have been achieved and no revenue based earnout payments have been paid to the former MikaMonu shareholders. The maximum amount of the remaining potential earnout payments totals approximately $30.0 million at March 31, 2025.
Additional capital may also be required for the consummation of any acquisition of businesses, products or technologies that we may undertake. On June 28, 2023, we filed a registration statement on Form S-3, which was declared effective by the SEC on July 19, 2023.
Additional capital may also be required for the consummation of any acquisition of businesses, products or technologies that we may undertake. On June 28, 46 Table of Contents 2023, we filed a registration statement on Form S-3, which was declared effective by the SEC on July 19, 2023.
Recent Accounting Pronouncements Please refer to Note 1 to our consolidated financial statements appearing under Part II, Item 8 for a discussion of recent accounting pronouncements that may impact the Company. 46 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk Foreign Currency Exchange Risk.
Recent Accounting Pronouncements Please refer to Note 1 to our consolidated financial statements appearing under Part II, Item 8 for a discussion of recent accounting pronouncements that may impact the Company. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Foreign Currency Exchange Risk.
To our knowledge, none of our other OEM customers accounted for more than 10% of our net revenues in fiscal 2024, 2023 or 2022. Cost of Revenues.
To our knowledge, none of our other OEM customers accounted for more than 10% of our net revenues in fiscal 2025, 2024 or 2023. Cost of Revenues.
We had cash and cash equivalents totaling $14.4 million at March 31, 2024. These amounts were invested primarily in money market funds. The cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes.
We had cash and cash equivalents totaling $13.4 million at March 31, 2025. These amounts were invested primarily in money market funds. The cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes.
This decrease was primarily due to the changes in net revenues, gross profit and operating expenses discussed above. Liquidity and Capital Resources As of March 31, 2024, our principal sources of liquidity were cash and cash equivalents of $14.4 million compared to $30.6 million of cash, cash equivalents and short-term investments as of March 31, 2023.
This decrease was primarily due to the changes in net revenues, gross profit and operating expenses discussed above. Liquidity and Capital Resources As of March 31, 2025, our principal sources of liquidity were cash and cash equivalents of $13.4 million compared to $14.4 million of cash, cash equivalents and short-term investments as of March 31, 2024.
Nokia purchases products directly from us and through contract manufacturers and distributors. Based on information provided to us by its contract manufacturers and our distributors, purchases by Nokia represented approximately 21%, 17% and 29% of our net revenues in fiscal 2024, 2023 and 2022, respectively.
Nokia purchases products directly from us and through contract manufacturers and distributors. Based on information provided to us by its contract manufacturers and our distributors, purchases by Nokia represented approximately 12%, 21% and 17% of our net revenues in fiscal 2025, 2024 and 2023, respectively.
Contingent Consideration. The fair value of the contingent consideration liability potentially payable in connection with our acquisition of MikaMonu was initially determined as of the acquisition date using unobservable inputs.
Contingent Consideration. The fair value of the contingent consideration liability potentially payable in connection with our acquisition of MikaMonu was initially determined as of the acquisition date using unobservable 47 Table of Contents inputs.
Due to revisions to the amount of expected revenue, the timing of revenue to be recognized prior to the end of the earnout period and the probability of achievement of the APU revenue forecast, the contingent consideration liability decreased by $892,000 from March 31, 2023 to March 31, 2024.
Due to revisions to the amount of expected revenue, the timing of revenue to be recognized prior to the end of the earnout period and the probability of achievement of the APU revenue forecast, the contingent consideration liability decreased by $160,000 from March 31, 2024 to March 31, 2025.
Declines in interest rates, however, will reduce future investment income. ​ 47 Table of Contents
Declines in interest rates, however, will reduce future investment income. ​ 48 Table of Contents
As of March 31, 2024, we had $2.2 million in purchase obligations for facility leases, wafers and software and test purchase obligations that are binding commitments, of which $1.2 million are payable in the next twelve months and $1.0 million are committed in the long term. ​ In connection with the acquisition of MikaMonu on November 23, 2015, we are required to make contingent consideration payments to the former MikaMonu shareholders conditioned upon the achievement of certain revenue 45 Table of Contents targets for products based on the MikaMonu technology.
As of March 31, 2025, we had $15.1 million in purchase obligations for facility leases, wafers and software and test purchase obligations that are binding commitments, of which $2.9 million are payable in the next twelve months and $12.2 million are committed in the long term. ​ In connection with the acquisition of MikaMonu on November 23, 2015, we are required to make contingent consideration payments to the former MikaMonu shareholders conditioned upon the achievement of certain revenue targets for products based on the MikaMonu technology.
Cash provided by financing activities was $1.8 million and $402,000 in fiscal 2024 and fiscal 2023, respectively and consisted of the net proceeds from the sale of common stock pursuant to our employee stock plans.
Cash provided by financing activities was $633,000 million and $1.8 million in fiscal 2025 and fiscal 2024, respectively and primarily consisted of the net proceeds from the sale of common stock pursuant to our employee stock plans.
Because we recorded a cumulative three-year loss on a U.S. tax basis for the year ended March 31, 2024 and the realization of our deferred tax assets is questionable, we recorded a tax provision reflecting a valuation allowance of $20.2 million in net deferred tax assets in fiscal 2024.
Because we recorded a cumulative three-year loss on a U.S. tax basis for the year ended March 31, 2025 and the realization of our deferred tax assets is questionable, we recorded a tax provision reflecting a valuation allowance of $22.8 million in net deferred tax assets in fiscal 2025.
In fiscal 2024, the value of contingent consideration liability resulting from the MikaMonu acquisition decreased by $892,000 compared to a decrease of $1.7 million in fiscal 2023 as a result of re-measurement of contingent consideration liability in each year.
In fiscal 2025, the value of contingent consideration liability resulting from the MikaMonu acquisition decreased by $160,000 compared to a decrease of $892,000 million in fiscal 2024 as a result of re-measurement of contingent consideration liability in each year.
In addition, a significant portion of our sales are 40 Table of Contents made to foreign and domestic distributors who resell our products to OEMs, as well as their contract manufacturers. Direct sales to contract manufacturers accounted for 20.5%, 19.8% and 31.0% of our net revenues for fiscal 2024, 2023 and 2022, respectively.
In addition, a significant portion of our sales are made to foreign and domestic distributors who resell our products to OEMs, as well as their contract manufacturers. 41 Table of Contents Direct sales to contract manufacturers accounted for 7.9%, 20.5% and 19.8% of our net revenues for fiscal 2025, 2024 and 2023, respectively.
The exchange loss in each period was primarily related to our Taiwan branch operations and operations in Israel. Provision (benefit) for Income Taxes. The provision for income taxes decreased from $372,000 in fiscal 2023 to $70,000 in fiscal 2024.
The exchange loss in each period was primarily related to our Taiwan branch operations and operations in Israel. Provision (benefit) for Income Taxes. The provision for income taxes increased from $70,000 in fiscal 2024 to $130,000 in fiscal 2025.
Cash and cash equivalents totaling $9.4 million were held in foreign locations as of March 31, 2024. Net cash used in operating activities was $17.4 million and $16.8 million for fiscal 2024 and fiscal 2023, respectively.
Cash and cash equivalents totaling $8.8 million were held in foreign locations as of March 31, 2025. Net cash used in operating activities was $13.0 million and $17.4 million for fiscal 2025 and fiscal 2024, respectively.
Re-measurement of the contingent consideration liability during the fiscal year ended March 31, 2024 resulted in a decrease of the contingent consideration liability of $0.9 million. 42 Table of Contents The allocation of the purchase price to acquired identifiable intangible assets and goodwill was based on their estimated fair values at the date of acquisition.
Re-measurement of the contingent consideration liability during the fiscal year ended March 31, 2025 resulted in a decrease of the contingent consideration liability of $160,000. The allocation of the purchase price to acquired identifiable intangible assets and goodwill was based on their estimated fair values at the date of acquisition.
The decrease in research and development spending was primarily related to decreases of $2.2 million in payroll related expenses and $1.4 million in outside consulting expenses for the development of our APU-2 product. The decrease in research and development spending was partially offset by an increase in pre-production mask costs of $2.4 million related to our APU-2 product.
The decrease in research and development spending was primarily related to a decrease in pre-production mask costs of $2.4 million related to our APU2 product and a decrease of $2.2 million in payroll related expenses, partially offset by a lesser increase in outside consulting expenses.
Net revenues decreased by 26.7% from $29.7 million in fiscal 2023 to $21.8 million in fiscal 2024. The overall average selling price of all units shipped in fiscal 2024 increased by 20.8% in fiscal 2024 compared to the prior fiscal year.
Net revenues decreased by 5.7% from $21.8 million in fiscal 2024 to $20.5 million in fiscal 2025. The overall average selling price of all units shipped in fiscal 2025 increased by 0.7% in fiscal 2025 compared to the prior fiscal year. Units shipped decreased by 6.4% in fiscal 2025 compared to fiscal 2024.
Results of Operations The following table sets forth statement of operations data as a percentage of net revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ ​ 2024 ​ ​ 2023 ​ Net revenues ​ 100.0 % ​ 100.0 % Cost of revenues ​ 45.7 ​ ​ 40.4 ​ Gross profit ​ 54.3 ​ ​ 59.6 ​ Operating expenses: ​ ​ ​ ​ ​ ​ Research and development ​ 99.7 ​ ​ 79.3 ​ Selling, general and administrative ​ 48.5 ​ ​ 33.5 ​ Total operating expenses ​ 148.2 ​ ​ 112.8 ​ Loss from operations ​ (93.9) ​ ​ (53.2) ​ Interest and other income, net ​ 1.9 ​ ​ 0.7 ​ Loss before income taxes ​ (92.0) ​ ​ (52.5) ​ Provision for income taxes ​ 0.3 ​ ​ 1.3 ​ Net loss ​ (92.3) ​ ​ (53.8) ​ ​ Fiscal Year Ended March 31, 2024 Compared to Fiscal Year Ended March 31, 2023 Net Revenues.
Results of Operations The following table sets forth statement of operations data as a percentage of net revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ 2025 ​ 2024 ​ Net revenues ​ 100.0 % 100.0 % Cost of revenues ​ 50.6 ​ 45.7 ​ Gross profit ​ 49.4 ​ 54.3 ​ Operating expenses: ​ ​ ​ ​ ​ Research and development ​ 78.0 ​ 99.7 ​ Selling, general and administrative ​ 52.5 ​ 48.5 ​ Gain from sale and leaseback transaction ​ (28.2) ​ — ​ Total operating expenses ​ 102.3 ​ 148.2 ​ Loss from operations ​ (52.9) ​ (93.9) ​ Interest and other income, net ​ 1.6 ​ 1.9 ​ Loss before income taxes ​ (51.3) ​ (92.0) ​ Provision for income taxes ​ 0.6 ​ 0.3 ​ Net loss ​ (51.9) ​ (92.3) ​ ​ Fiscal Year Ended March 31, 2025 Compared to Fiscal Year Ended March 31, 2024 Net Revenues.
Sales to foreign and domestic distributors accounted for 76.4%, 77.5% and 66.8% of our net revenues for fiscal 2024, 2023 and 2022, respectively.
Sales to foreign and domestic distributors accounted for 91.7%, 76.4% and 77.5% of our net revenues for fiscal 2025, 2024 and 2023, respectively.
Investment activities in fiscal 2023 primarily consisted of the maturity of certificates of deposit and agency bonds of $7.0 million partially offset by the purchase of property and equipment of $316,000.
Investment activities in fiscal 2024 primarily consisted of the maturity of certificates of deposit and agency bonds of $3.4 million partially offset by the purchase of property and equipment of $645,000.
Historically, a small number of OEM customers have accounted for a substantial portion of our net revenues, and we expect that significant customer concentration will continue for the foreseeable future. Many of our OEMs use contract manufacturers to manufacture their equipment. Accordingly, a significant percentage of our net revenues is derived from sales to these contract manufacturers.
Thus, we will recognize revenue upon shipment of the product for direct sales and sales to our distributors. Historically, a small number of OEM customers have accounted for a substantial portion of our net revenues, and we expect that significant customer concentration will continue for the foreseeable future. Many of our OEMs use contract manufacturers to manufacture their equipment.
The following direct customers accounted for 10% or more of our net revenues in one or more of the following periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ March 31, ​ ​ 2024 2023 2022 Contract manufacturers: ​ ​ ​ ​ ​ ​ ​ Flextronics Technology ​ 13.5 % 10.4 % 16.0 % Sanmina ​ 5.9 ​ 8.8 ​ 11.2 ​ Distributors: ​ ​ ​ ​ ​ ​ ​ Avnet Logistics ​ 50.6 ​ 48.1 ​ 38.0 ​ Nexcomm ​ 9.3 ​ 16.6 ​ 17.2 ​ Nokia was our largest customer in fiscal 2024, 2023 and 2022.
The following direct customers accounted for 10% or more of our net revenues in one or more of the following periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year Ended ​ ​ ​ March 31, ​ ​ 2025 2024 2023 Contract manufacturer: ​ ​ ​ ​ ​ ​ ​ Flextronics Technology ​ 2.7 % 13.5 % 10.4 % Distributors: ​ ​ ​ ​ ​ ​ ​ Avnet Logistics ​ 49.6 ​ 50.6 ​ 48.1 ​ Holystone ​ 22.6 ​ 2.5 ​ 2.4 ​ Nexcomm ​ 9.8 ​ 9.3 ​ 16.6 ​ KYEC was our largest end user customer in fiscal 2025.
We have a team in-place with tremendous depth and breadth of experience and knowledge, with a legacy business that is providing an ongoing source of funding for the development of new product lines.
As of March 31, 2025, we had cash and cash equivalents of $13.4 million, with no debt. We have a team in-place with tremendous depth and breadth of experience and knowledge, with a legacy business that is providing an ongoing source of funding for the development of new product lines.
As of March 31, 2024, the accrual for potential payment of contingent consideration was $160,000.
As of March 31, 2025, the accrual for potential payment of contingent consideration was $0.
While higher interest rates, worldwide inflationary pressures and the decline in the global economic environment have created significant uncertainty as to general economic and capital market conditions for the remainder of calendar 2024 and beyond, we believe that our existing balances of cash and cash equivalents, and cash flow expected to be generated from our future operations and the net proceeds of approximately $11.2 million from the sale of our headquarters building in Sunnyvale, CA which closed on June 6, 2024 will be sufficient to meet our cash needs for working capital and capital expenditures for at least the next 12 months.
While higher interest rates, worldwide inflationary pressures, tariffs and trade disputes, increasing geopolitical tensions and the decline in the global economic environment have created significant uncertainty as to general economic and capital market conditions for the remainder of calendar 2025 and beyond, we believe that our existing balances of cash and cash equivalents, and cash flow expected to be generated from our future operations will be sufficient to meet our cash needs for working capital and capital expenditures for at least the next 12 months.
We expect that future direct and indirect sales to Nokia will continue to fluctuate significantly on a quarterly basis. The networking and telecommunications market has accounted for a significant portion of our net revenues in the past and has declined during the past several years and is expected to continue to decline.
The networking and telecommunications market has accounted for a significant portion of our net revenues in the past and has declined during the past several years and is expected to continue to decline.
Furthermore, our customers may delay scheduled delivery dates and/or cancel orders within specified timeframes without significant penalty. We sell our products through our direct sales force, international and domestic sales representatives and distributors.
Furthermore, our customers may delay scheduled delivery dates and/or cancel orders within specified timeframes without significant penalty. We sell our products through our direct sales force, international and domestic sales representatives and distributors. Our customer contracts, which may be in the form of purchase orders, contracts or purchase agreements, contain performance obligations for delivery of agreed upon products.
Reductions in uncertain tax benefits due to lapses in the statute of limitations were not significant in the years ended March 31, 2024 and 2023. Net Loss. Net loss was ($16.0) million in fiscal 2023 compared to a net loss of ($20.1) million in fiscal 2024.
Reductions in uncertain tax benefits due to lapses in the statute of limitations were $767,000 in fiscal 2025 and were not significant in fiscal 2024. 45 Table of Contents Net Loss. Net loss was ($20.1) million in fiscal 2024 compared to a net loss of ($10.6) million in fiscal 2025.
Decreases of $554,000 in payroll related expenses and $196,000 in outside sales representative commissions were partially offset by increases of $284,000 in outside consultants and $234,000 in professional fees. Selling, general and administrative expenses included stock-based compensation expense of $1.2 million and $951,000 in fiscal 2024 and fiscal 2023, respectively. Interest Income and Other (Expense), Net.
Decreases of $267,000 in outside sales representative commissions and $187,000 in payroll related expense were partially offset by an increase of $133,000 in professional fees. Selling, general and administrative expenses included stock-based compensation expense of $1.1 million and $1.2 million in fiscal 2025 and fiscal 2024, respectively. Gain from Sale of Assets .
The primary uses of cash in fiscal 2024 were the net loss of $20.1 million and a decrease of $1.6 million in accrued expenses and other liabilities. The reduction in accrued expenses and other liabilities was primarily related to decreases in compensation related accruals, income taxes payable and deferred revenue.
The reduction in accrued expenses and other liabilities was primarily related to decreases in compensation related accruals, income taxes payable and deferred revenue. The uses of cash in fiscal 2024 were less than the net loss due to non-cash items including stock-based compensation of $2.8 million and depreciation and amortization expenses of $927,000.
Shipments to Nokia will continue to fluctuate on a quarterly basis as a result of demand and shipments to its end customers. While recent customer order patterns have been particularly variable, these fluctuations are related to economic and external factors, which include worldwide inflationary pressures, higher interest rates and the decline in the global economic environment .
While recent customer order patterns have been particularly variable, these fluctuations are related to economic and external factors, which include worldwide inflationary pressures, higher interest rates, tariffs and trade disputes, increasing geopolitical tensions and the decline in the global economic environment.
The uses of cash in fiscal 2024 were less than the net loss due to non-cash items including stock-based compensation of 44 Table of Contents $2.8 million and depreciation and amortization expenses of $927,000. The primary source of cash in fiscal 2024 was a decrease in inventories of $1.3 million.
The uses of cash in fiscal 2025 were offset by non-cash items including stock-based compensation of $2.3 million and depreciation and amortization expenses of $665,000. The primary uses of cash in fiscal 2024 were the net loss of $20.1 million and a decrease of $1.6 million in accrued expenses and other liabilities.
The change in gross profit is primarily related to the change in net revenues discussed above. The decrease in gross margin was primarily related to change in the mix of products and customers and also reflects the impact of fixed overhead on lower shipment levels compared to the prior year. 43 Table of Contents Research and Development Expenses.
The decrease in gross margin was primarily related to change in the mix of products and customers and also reflects the impact of fixed overhead on lower shipment levels compared to the prior year. Gross margin in fiscal 2025 was also impacted by the severance related payments related to our August 2024 cost reduction initiative discussed above.
Our level of cash equivalents has historically been sufficient to meet our current and 39 Table of Contents longer term operating and capital needs. We believe that during the next 12 months, continued inflationary pressures and higher interest rates will continue to negatively impact general economic activity and demand in our end markets.
We believe that during the next 12 months, continued inflationary pressures, tariffs and trade disputes, higher interest rates and increasing geopolitical tensions will continue to negatively impact general economic activity and demand in our end markets.
Substantially all of our revenues are derived from sales of our Very Fast SRAM products. Sales to networking and telecommunications OEMs accounted for 32% to 49% of our net revenues during our last three fiscal years.
We incurred approximately $668,000 in cash expenditures for termination costs, including the payout of accrued vacation, in the quarter ended September 30, 2024. Revenues. Substantially all of our revenues are derived from sales of our Very Fast SRAM products. Sales to networking and telecommunications OEMs accounted for 19% to 34% of our net revenues during our last three fiscal years.
As is typical in the semiconductor industry, the selling prices of our products generally decline over the life of the product.
The average selling price of our products has increased or remained unchanged in recent years. However, as is typical in the semiconductor industry, the selling prices of our products has historically declined over the life of the product.
At March 31, 2024, we had total minimum lease obligations of approximately $1.6 million from April 1, 2023 through April 30, 2027, under non-cancelable operating leases for our facilities.
Net cash provided by financing activities in fiscal 2024 also included proceeds from the sale of common stock pursuant to an At-the-Market offering of $153,000. At March 31, 2025, we had total minimum lease obligations of approximately $12.6 million from April 1, 2025 through May 30, 2034, under non-cancelable operating leases for our facilities.
The contingent consideration liability is included in contingent consideration, non-current on the Consolidated Balance Sheet at March 31, 2023 and 2024 in the amount of $1.1 million and $160,000, respectively At each reporting period, the contingent consideration liability is re-measured at then current fair value with changes recorded in the Consolidated Statements of Operations.
We determined that the fair value of this contingent consideration liability was $5.8 million at the acquisition date. The contingent consideration liability is included in contingent consideration, non-current on the Consolidated Balance Sheets at March 31, 2024 and 2025 in the amount of $160,000 and $0, respectively.
The networking and telecommunications markets represented 34% and 32% of shipments in fiscal 2024 and in fiscal 2023, respectively. Direct and indirect sales to Nokia, currently our largest customer, decreased by $500,000 from $5.0 million in fiscal 2023 to $4.5 million fiscal 2024.
KYEC, which is a leading provider in the test and measurement market, was our largest end user customer in fiscal 2025. Direct and indirect sales to KYEC increased by $4.1 million from $544,000 in fiscal 2024 to $4.6 million fiscal 2025. The networking and telecommunications markets represented 19% and 34% of shipments in fiscal 2025 and in fiscal 2024, respectively.
Interest income and other (expense), net increased from income of $202,000 in fiscal 2023 to income of $414,000 in fiscal 2024. Interest income increased by $232,000 due to higher interest rates received on cash and short-term investments. The foreign currency exchange loss increased from ($121,000) in fiscal 2023 to ($127,000) in fiscal 2024.
Interest Income and Other (Expense), Net. Interest income and other (expense), net decreased from income of $414,000 in fiscal 2024 to income of $326,000 in fiscal 2025. Interest income decreased by $96,000 primarily due to lower cash balances invested in money market funds. The foreign currency exchange loss decreased from ($127,000) in fiscal 2024 to ($119,000) in fiscal 2025.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased 6.3% from $9.9 million in fiscal 2023 to $10.6 million in fiscal 2024.
Research and development expenses included stock-based compensation expense of $1.0 million and $1.4 million in fiscal 2025 and fiscal 2024, respectively. Selling, General and Administrative Expenses. Selling, general and administrative expenses increased 1.9% from $10.6 million in fiscal 2024 to $10.8 million in fiscal 2025.
Although it is difficult to estimate the length or gravity of the continued inflationary pressures and higher interest rates, the evolving conflict in the Middle East and the decline in the global economic environment, are expected to have an adverse effect on our results of operations, financial position, including potential impairments, and liquidity into fiscal 2025. Revenues.
Although it is difficult to estimate the length or gravity of the continued inflationary pressures, tariffs and trade disputes, higher interest rates, increasing geopolitical tensions and the decline in the global economic environment, are expected to have an adverse effect on our results of operations, financial position, including potential impairments, and liquidity into fiscal 2026. 40 Table of Contents In August 2024, we initiated measures to reduce our operating expenses by approximately $3.5 million on an annualized basis, primarily from salary reductions related to reduced headcount, as well as targeted reductions in research and development spending.
Our balance sheet and liquidity position has been strengthened by the recent sale of our Sunnyvale, California property, which we anticipate will provide further financial flexibility and security in the current environment of economic uncertainty. Generally, our primary source of liquidity is cash equivalents.
Our balance sheet and liquidity position was strengthened by the sale of our Sunnyvale, California property in June 2024. Generally, our primary source of liquidity is cash equivalents. Our level of cash equivalents has historically been sufficient to meet our current and longer term operating and capital needs.
Cost of revenues decreased as a result of the lower volume of units shipped in fiscal 2024 compared to fiscal 2023 as discussed above. Cost of revenues included a provision for excess and obsolete inventories of $180,000 in fiscal 2024 compared to $226,000 in fiscal 2023.
The increase in cost of revenues was primarily related to changes in the mix of products and customers. Cost of revenues included a provision for excess and obsolete inventories of $305,000 in fiscal 2025 compared to $180,000 in fiscal 2024.
We sold 133,000 shares pursuant to the offering at an average price of $4.20 for proceeds of $542,000, less offering costs of $389,000 during the quarter ended September 30, 2023. We cannot assure that additional equity or debt financing, if required, will be available on terms that are acceptable or at all.
We sold 133,000 shares pursuant to the Offering at an average price of $4.20 for proceeds of $542,000, less offering costs of $389,000 during the quarter ended September 30, 2023. In May and June 2025, we sold 3,380,773 shares pursuant to the Offering at an average price of $3.32 for proceeds of $11.2 million, less offering costs of $411,000.
Transfer of control occurs at the time of shipment, title and the risks and rewards of ownership have passed to the customer, and we have a right to payment. Thus, we will recognize revenue upon shipment of the product for direct sales and sales to our distributors.
Delivery of all performance obligations contained within a contract with a customer typically occurs at the same time (or within the same accounting period). Transfer of control occurs at the time of shipment, title and the risks and rewards of ownership have passed to the customer, and we have a right to payment.
The primary uses of cash in fiscal 2023 were the net loss of $16.0 million, a reduction in accrued expenses and other liabilities of $2.3 million and an increase in inventories of $2.0 million. The reduction in accrued expenses and other liabilities was primarily related to the payment of fiscal 2022 year-end accruals for incentive compensation.
The primary uses of cash in fiscal 2025 were the net loss of $10.6 million and an increase of $1.1 million in prepaid expenses and other assets. The increase in prepaid expenses and other assets was primarily related to a production mask set for our APU2.
Changes in any of the inputs may result in significant adjustments to the recorded fair value.
At each reporting period, the contingent consideration liability is re-measured at then current fair value with changes recorded in the Consolidated Statements of Operations. Changes in any of the inputs may result in 43 Table of Contents significant adjustments to the recorded fair value.
Net cash provided by investing activities was $2.8 million and $6.7 million in fiscal 2024 and 2023, respectively. Investment activities in fiscal 2024 primarily consisted of the maturity of certificates of deposit and agency bonds of $3.4 million partially offset by the purchase of property and equipment of $645,000.
The primary source of cash in fiscal 2024 was a decrease in inventories of $1.3 million. Net cash provided by investing activities was $11.4 million and $2.8 million in fiscal 2025 and 2024, respectively.
Research and development expenses in fiscal 2024 were also offset by $435,000 of funding received under the Direct to Phase II award for the development of a Next-Generation Associative Processing Unit-2 for Enhanced Space-Based Capabilities. Research and development expenses included stock-based compensation expense of $1.4 million and $1.3 million in fiscal 2024 and fiscal 2023, respectively.
The decrease in payroll related expenses was related to the cost reduction measures implemented in August 2024. Research and development expenses in fiscal 2025 and fiscal 2024 were also offset by $1.2 million and $435,000, respectively, of funding received under the government contracts discussed above.
Cost of revenues included stock-based compensation expense of $228,000 and $202,000, respectively, in fiscal 2024 and fiscal 2023. Gross Profit. Gross profit decreased by 33.1% from $17.7 million in fiscal 2023 to $11.8 million in fiscal 2024. Gross margin decreased from 59.6% in fiscal 2023 to 54.3% in fiscal 2024.
Cost of revenues included stock-based compensation expense of $199,000 and $228,000, 44 Table of Contents respectively, in fiscal 2025 and fiscal 2024. Cost of revenues in fiscal 2025 includes $204,000 in severance related payments related to our August 2024 cost reduction initiative. Gross Profit.
Research and development expenses decreased 7.9% from $23.6 million in fiscal 2023 to $21.7 million in fiscal 2024. The reduction in research and development spending in fiscal 2024 reflects the impact of cost reduction measures implemented in the quarter ended December 31, 2022.
Research and Development Expenses. Research and development expenses decreased 26.2% from $21.7 million in fiscal 2024 to $16.0 million in fiscal 2025.
Removed
We are subject to the highly cyclical nature of the semiconductor industry, which has experienced significant fluctuations, often in connection with fluctuations in demand for the products in which semiconductor devices are used. Our revenues have been substantially impacted by significant fluctuations in sales to our largest customer, Nokia.
Added
Our revenues have been substantially impacted by significant fluctuations in sales to our largest end user customers, Nokia and KYEC. We expect that future direct and indirect sales to Nokia and KYEC will continue to fluctuate significantly on a quarterly basis.
Removed
Our revenues in recent years were impacted by changes in customer buying patterns and communication limitations related to COVID-19 restrictions that required a significant number of our customer contacts to work from home.
Added
These strategic cost reduction measures enabled us to better focus on our operational resources on advancing our proprietary APU technology. None of the Gemini-II chip development and core APU software development, including the APU compiler, will be affected by the reduction in R&D spending. The APU marketing, sales, and APU engineering efforts will retain priority in the budget.
Removed
While the COVID-19 pandemic has ended, worldwide inflationary pressures, higher interest rates and decline in the global economic environment have had, and may continue to have, an adverse impact on our business and financial condition.
Added
The planned spending reductions will not impact the launch of Gemini-I and Gemini-II in target markets, including SAR and search. The cost reduction initiative was completed in August 2024 and resulted in an approximate 16% decrease in our global workforce.
Removed
Furthermore, the easing of supply chain shortages and prior buffer stock purchases from significant customers led to a decrease in revenues in the second half of fiscal 2023 and during fiscal 2024. As of March 31, 2024, we had cash and cash equivalents of $14.4 million, with no debt.
Added
Accordingly, a significant percentage of our net revenues is derived from sales to these contract manufacturers.
Removed
Although we expect the average selling prices of individual products to decline over time, we believe that, over the next several quarters, our overall average selling prices will increase due to a continuing shift in product mix to a higher percentage of higher price, higher density products, and to a lesser extent, recent price increases to our customers due to supply constraints.
Added
Nokia was our largest end user customer in fiscal 2024 and 2023. KYEC purchases product through contract manufacturers and distributors. Based on information provided to us by KYEC’s contract manufacturers and distributors, purchases by KYEC represented approximately 23%, 3% and 2% of our net revenues in fiscal 2025, 2024 and 2023, respectively.
Removed
Our revenues have been and are expected to continue to be impacted by changes in customer buying patterns and communication limitations related to changes in working habits that have resulted in a significant number of our customer contacts working from home.
Added
Direct and indirect sales to Nokia decreased by $2.0 million from $4.5 million in fiscal 2024 to $2.5 million fiscal 2025. Shipments to Nokia will continue to fluctuate on a quarterly basis as a result of demand and shipments to its end customers.
Removed
Our customer contracts, which may be in the form of purchase orders, contracts or purchase agreements, contain performance obligations for delivery of agreed upon products. Delivery of all performance obligations contained within a contract with a customer typically occurs at the same time (or within the same accounting period).
Added
In addition, during the second half of fiscal 2025, we have seen early indications of an improvement in our SRAM business. Existing customers are depleting their channel inventory, and we anticipate they will resume ordering in the upcoming quarters. Cost of Revenues. Cost of revenues increased by 4.8% from $9.9 million in fiscal 2024 to $10.4 million in fiscal 2025.
Removed
We determined that the fair value of this contingent consideration liability was $5.8 million at the acquisition date.
Added
Gross profit decreased by 14.2% from $11.8 million in fiscal 2024 to $10.1 million in fiscal 2025. Gross margin decreased from 54.3% in fiscal 2024 to 49.4% in fiscal 2025. The change in gross profit is primarily related to the change in net revenues discussed above.
Removed
The decrease in net revenues is related to the current economic environment which has led to cautionary spending by our customers and purchases made as a result of supply chain constraints in the previous periods. Units shipped decreased by 39.3% in fiscal 2024 compared to fiscal 2023.
Added
Gain from sale of assets includes the gain from the sale of our headquarters building located at 1213 Elko Drive in Sunnyvale, California. The sale and leaseback transaction was completed on June 6, 2024. For further discussion of the sale and leaseback transaction, see Note - 8 Leases to the consolidated financial statements contained elsewhere in this report.

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