{"url_path":"/sec/sqns/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 Key Information","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-11","source_url":"https://www.sec.gov/Archives/edgar/data/1383395/0001383395-26-000082-index.html","accession_number":"0001383395-26-000082","cik":"0001383395","ticker":"SQNS","issuer_name":"SEQUANS COMMUNICATIONS","edgar_url":"https://www.sec.gov/Archives/edgar/data/1383395/0001383395-26-000082-index.html","primary_entity_key":"0001383395","primary_entity_name":"SEQUANS COMMUNICATIONS"},"word_count":26938,"has_tables":true,"body_markdown":"Item 3. Key Information\n\nA. Selected Financial Data\n\n[Reserved]\n\nB. Capitalization and Indebtedness\n\nNot applicable.\n\nC. Reasons for the Offer and Use of Proceeds\n\nNot applicable.\n\nD. Risk Factors\n\nOur business faces significant risks. You should carefully consider all of the information set forth in this annual report and in our other filings with the United States Securities and Exchange Commission (“SEC”), including the following risk factors which we face, and which are faced by our industry. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. This report also contains forward-looking statements that involve risks and uncertainties. Our results could materially differ from those anticipated in these forward-looking statements, as a result of certain factors including the risks described below and elsewhere in this report and our other SEC filings. See “Special Note Regarding Forward-Looking Statements” on page 1.\n\nRisk Factor Summary\n\nRisks Related to Our Business and Industry\n\n•We have a history of losses and may not achieve or sustain profitability in the future.\n\n•Our industry is subject to rapid technological change.\n\n•If we are unable to effectively manage our business through periods of economic or market slow-down and any subsequent future growth, we may not be able to execute our business plan.\n\n•If we fail to successfully develop, commercialize, produce and sell our module product line, our business, revenue and operating results may be harmed.\n\n•We depend on a small number of customers for a significant portion of our revenue.\n\n•Our customers may cancel their orders, change production quantities or delay production, and if we fail to forecast demand for our products accurately, we may incur product shortages, delays in product shipments or excess or insufficient product inventory, which could harm our business.\n\n•If customers do not design our semiconductor solutions into their product offerings, our business would be harmed.\n\n•If we are unable to compete effectively, we may not increase or maintain our revenue or market share.\n\n•We have significant ongoing capital requirements.\n\n•The semiconductor and communications industries have historically experienced significant fluctuations with prolonged downturns.\n\n•We are subject to risks inherent in our international operations.\n\n•Our business may be impacted by political events, war, terrorism, business interruptions and other geopolitical events and uncertainties beyond our control, including the Russian-Ukraine conflict and the Middle East conflicts.\n\n3\n\n•We depend on the commercial deployment of 4G LTE narrow band variants and 5G communications equipment, products and services to grow our business.\n\n•Rapidly changing standards could make our semiconductor solutions obsolete.\n\n•The average selling prices of our semiconductor solutions have historically decreased over time and will likely do so in the future.\n\n•Fluctuations in foreign exchange rates may harm our financial results.\n\n•Our global operations are subject to risks for which we may not be adequately insured.\n\n•The complexity of our semiconductor solutions could result in unforeseen delays or expenses from undetected defects or design errors in hardware or software, which could reduce the market acceptance for our semiconductor solutions, damage our reputation with current or prospective customers and increase our costs.\n\nRisks Related to the Manufacture of Our Products\n\n•Global supply chain shortages may negatively affect our business.\n\n•Certain natural disasters may negatively impact our business.\n\n•We depend on one independent foundry to manufacture our semiconductor wafers and do not have a long-term agreement with such foundry.\n\n•If our foundry vendor does not achieve satisfactory yields or quality, our reputation and customer relationships could be harmed.\n\n•Any increase in the manufacturing cost of our products would reduce our gross margins and operating profit.\n\n•We outsource our assembly, testing, warehousing and shipping operations to third parties.\n\n•If we fail to obtain or maintain an Approved or Authorized IC Designer role under U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) rules, exports of our advanced IC designs or related components could be prohibited.\n\n•We may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration.\n\nRisks Related to Our Bitcoin Treasury Strategy and Holdings\n\n•Our Bitcoin strategy exposes us to various risks associated with Bitcoin.\n\n•Bitcoin is a highly volatile asset, and fluctuations in the price of Bitcoin are expected to influence our financial results and the market price of our ADSs.\n\n•Our operating results are dependent on the price of digital assets and Bitcoin. If such price declines, our business, operating results, and financial condition would be adversely affected.\n\n•Our Bitcoin strategy subjects us to enhanced regulatory oversight.\n\n•Due to the unregulated nature and lack of transparency surrounding the operations of many Bitcoin trading venues, Bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in Bitcoin trading venues and adversely affect the value of our Bitcoin.\n\n•The concentration of our Bitcoin holdings could enhance the risks inherent in our Bitcoin strategy.\n\n•Our Bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.\n\n•If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our Bitcoin, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our Bitcoin and our financial condition and results of operations could be materially adversely affected.\n\n•We face risks relating to the use of third-party advisors connection with the execution of our Bitcoin strategy.\n\n•We face risks relating to the custody of our Bitcoin, including the loss or destruction of private keys required to access our Bitcoin and cyberattacks or other data loss relating to our Bitcoin.\n\n•Regulatory change reclassifying Bitcoin as a security could lead to our classification as an “investment company” under the Investment Company Act of 1940 and could adversely affect the market price of Bitcoin and the market price of our ADSs.\n\n•Our Bitcoin strategy exposes us to risk of non-performance by counterparties.\n\n•Our potential loss of foreign private issuer status will increase our regulatory and compliance costs.\n\nRisks Related to our Secured Convertible Debentures and Potential Future Indebtedness\n\n•Our previously announced plan to redeem the balance of our Secured Convertible Debentures is dependent upon the value of our Bitcoin treasury.\n\n4\n\n•Our level and terms of indebtedness could adversely affect our ability to raise additional capital to fund other operations, and take advantage of new business opportunities.\n\n•We may not have the ability to raise the funds necessary to repurchase the Secured Convertible Debentures for cash upon a fundamental change or other event which could necessitate repayment of the Secured Convertible Debentures, including the mandatory repayment of the Secured Convertible Debentures required at maturity, and any future debt may contain limitations on our ability to engage in repurchases of the Secured Convertible Debentures.\n\n•The optional conversion feature of the Secured Convertible Debentures, if elected by the holders thereof, may adversely affect our financial condition.\n\n•Conversion of the Secured Convertible Debentures will dilute the ownership interest of existing shareholders or may otherwise depress the price of our ADSs and ordinary shares.\n\n•Fair value accounting for embedded derivatives in our debt instruments could generate significant earnings volatility and adversely affect investor perception, our stock price, and compliance with financial covenants.\n\nRisks Related to Intellectual Property Rights\n\n•Our business substantially depends on intellectual property licensed from Qualcomm, and we may be unable to successfully grow our business due to the covenants under the Qualcomm asset purchase agreement and license agreement.\n\n•We or our customers may be required to obtain licenses for certain so-called “standard essential patents” in order to comply with applicable standards.\n\n•We may not be able to obtain, or may choose not to obtain, sufficient intellectual property rights to provide us with meaningful protection or commercial advantage.\n\n•Assertions by third parties of infringement by us or our customers of their intellectual property rights could result in significant costs and cause our operating results to suffer.\n\n•Any potential dispute involving our patents or other intellectual property could also include our industry partners and customers, which could trigger our indemnification obligations to them and result in substantial expense to us.\n\n•Our failure to comply with obligations under open source licenses could require us to release our source code to the public or cease distribution of our products.\n\nRisks Related to Our Internal Control Over Financial Reporting\n\n•We identified material weaknesses in our internal control over financial reporting during 2024 and 2025 and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements or otherwise adversely affect the accuracy, reliability or timeliness of our financial statements.\n\nRisks Related to Ownership of Our Shares and ADSs\n\n•Our failure to maintain compliance with the Continued Listing Criteria of the New York Stock Exchange (NYSE) may result in the delisting of our ADSs.\n\n•Fluctuations in our operating results on a quarterly or annual basis and difficulty predicting our quarterly operating results could cause the market price of the ADSs to decline.\n\n•If securities or industry analysts cease to publish research reports about us or our industry, or if they adversely change their recommendations regarding the ADSs, the market price for the ADSs and trading volume could decline.\n\n•If we raise additional capital in the future, your ownership in us could be diluted.\n\n•We have no present intention to pay dividends on our ordinary shares in the foreseeable future.\n\n•You may not be able to exercise your right to vote the ordinary shares underlying your ADSs.\n\n•As a foreign private issuer, we are exempt from certain rules under the U.S. securities laws and are permitted to file less information with the SEC than a U.S. company, which may limit the information available to holders of the ADSs.\n\n•As a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from NYSE corporate governance listing standards.\n\n•U.S. holders of the ADSs may suffer adverse tax consequences from our characterization as a Passive Foreign Investment Company.\n\n•We may be subject to legal actions that could distract our management and increase costs.\n\n•You may be unable to recover in civil proceedings for U.S. securities laws violations.\n\n•ADSs holders may not be entitled to a jury trial with respect to claims arising under the deposit agreement.\n\n•The rights of shareholders in companies subject to French corporate law differ in material respects from the rights of shareholders of corporations incorporated in the United States.\n\n•Our by-laws and French corporate law contain provisions that may delay or discourage a takeover attempt.\n\n5\n\n•The exercise or conversion of outstanding stock options, restricted shares, warrants and convertible notes into ordinary shares will dilute the percentage ownership of our other shareholders.\n\nGeneral Risks\n\n•The loss of any of our key personnel could seriously harm our business.\n\n•Adverse outcomes in tax disputes could subject us to tax assessments and potential penalties.\n\n•Our business and operations could suffer in the event of security breaches.\n\n•Changes in International Financial Reporting Standards (“IFRS”) could adversely affect our financial results and may require significant changes to our internal accounting systems and processes.\n\n•In preparing our financial statements we make certain assumptions, judgments and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results.\n\n•Our Swiss pension plan exposes us to various risks, including investment risk, interest rate risk, longevity risk and risk related o underfunding of the pension plan.\n\nRisks Related to Our Business and Industry\n\nWe have a history of losses and we may not achieve or sustain profitability in the future, on a quarterly or annual basis.\n\nWe have incurred losses on an annual basis since inception, with the exception of the year ended December 31, 2024 due to an unusual and significant gain on the one-time sale of certain 4G assets. Without this gain, we would have been in a loss position in 2024 as well. We experienced net loss of $109.3 million in 2025, including an unrealized loss on the impairment in the value of Bitcoin of $67.4 million. At December 31, 2025, our accumulated deficit was $145.1 million. We expect to continue to incur significant expense related to the development of our future products and expansion of our business, although at a lower rate than in 2025. Additionally, we may encounter unforeseen difficulties, complications, product delays and other unknown factors that require additional expense. As a result of these expenditures, we will have to generate and sustain substantially increased revenue to achieve profitability. If we do not, we may not be able to achieve or maintain profitability, and we may continue to incur significant losses in the future.\n\nOur industry is subject to rapid technological change that could result in decreased demand for our products and those of our customers, or result in new specifications or requirements for our products, each of which could negatively affect our revenues, margins and operating results.\n\nThe markets in which we and our customers compete or plan to compete are characterized by rapidly changing technologies and industry standards and technological obsolescence, including the evolving trends in IoT and the emergence of several variants of 5G. Our ability to compete successfully depends on our ability to design, develop, manufacture, assemble, test, market and support new products and enhancements on a timely and cost-effective basis. A fundamental shift in technologies in any of our target markets could harm our competitive position within these markets. In addition, such shifts can cause a significant decrease in our revenues and adversely affect our operating results. Our failure to anticipate these shifts, to develop new technologies or to react to changes in existing technologies could materially delay our development of new products, which could result in product obsolescence, decreased revenue and a loss of design wins. The development of new technologies and products generally requires substantial investment before they are commercially viable. We intend to continue to make substantial investments in developing new technologies and products, including our 5G products, although at a lower level than in 2025. It is possible that our development efforts will not be successful and that our new technologies and products will not be accepted by customers or result in meaningful revenue. If the semiconductor solutions we develop fail to meet market or customer requirements or expectations, or do not achieve market acceptance, our operating results and competitive position would suffer.\n\nOur success and the success of our new products will depend on accurate forecasts of future technological developments, customer and consumer requirements and long-term market demand, as well as on a variety of specific implementation factors, including:\n\n•accurate prediction of the size and growth of the 4G and 5G markets;\n\n•accurate prediction of changes in device manufacturer requirements, technology, industry standards or consumer expectations, demands and preferences;\n\n•accurate prediction of the growth of the Internet of Things markets and 5G networks;\n\n6\n\n•timely and efficient completion of process design and transfer to manufacturing, assembly and testing, and securing sufficient manufacturing capacity to allow us to continue to timely and cost-effectively deliver products to our customers;\n\n•market acceptance, adequate consumer demand and commercial production of the products in which our semiconductor solutions are incorporated;\n\n•the quality, performance, functionality and reliability of our products as compared to competing products and technologies; and\n\n•effective marketing, sales and customer service.\n\nThe markets for our semiconductor solutions are characterized by frequent introduction of next generation and new products with new features and functionalities, short product life cycles in the case of consumer products and significant price competition. If we or our customers are unable to manage product transitions in a timely and cost-effective manner, our business and results of operations would suffer. In addition, frequent technology changes and introduction of next generation products may result in inventory obsolescence, which could reduce our gross margins and harm our operating performance. If we fail to timely introduce new products that meet the demands of our customers or our target markets, or if we fail to penetrate new markets, our revenue will decrease, and our financial condition would suffer.\n\nIf we are unable to effectively manage our business through periods of economic or market slow-down and any subsequent future growth, we may not be able to execute our business plan and our operating results could suffer.\n\nOur future operating results depend to a large extent on our ability to successfully manage our business through periods of economic or market slow-down, and periods of subsequent expansion and growth. To manage our growth successfully, we believe we must, among other things, effectively:\n\n•recruit, hire, train and manage additional qualified engineers for our research and development activities, especially in the positions of design engineering, product and test engineering, and applications engineering;\n\n•add additional sales personnel and expand sales offices;\n\n•add additional finance and information systems personnel;\n\n•implement and improve our administrative, financial and operational systems, procedures and controls; and\n\n•enhance our information technology support for enterprise resource planning and design engineering by adapting and expanding our systems and tool capabilities, and properly training new hires as to their use.\n\nFurthermore, to remain competitive and manage future expansion and growth, we must carry out extensive research and development, which requires significant capital investment. New competitors, technological advances in the semiconductor industry or by competitors, our entry into new markets, or other competitive factors may require us to invest significantly greater resources than we anticipate. If we are required to invest significantly greater resources than anticipated without a corresponding increase in revenue, our operating results could decline. Additionally, our periodic research and development expenses may be independent of our level of revenue, which could negatively impact our financial results. Finally, there can be no guarantee that our research and development investments will result in products that create additional revenue.\n\nDuring periods of economic or market slow-down, we must also effectively manage our expenses to preserve our ability to carry out such research and development. We are likely to incur product and market development costs earlier than some of the anticipated benefits, and the return on these investments, if any, may be lower, may develop more slowly than we expect, or may not materialize at all, which could harm our operating results. We dedicate a large portion of our operating expenses to our development of new products, which we do not expect will result in significant product revenues in the short term.\n\nIf we are unable to manage our business during both periods of economic or market slow-down and periods of growth effectively, we may not be able to take advantage of market opportunities or develop new products, and we may fail to satisfy customer requirements, maintain product quality, execute our business plan or respond to competitive pressures, any of which could harm our operating results.\n\nIf we fail to successfully develop, commercialize, produce and sell our module product line, our business, revenue and operating results may be harmed.\n\nOur modules incorporate many components in addition to our chipsets. We may lack the purchasing power to acquire at competitive prices certain components required to produce modules, and we do not expect to be able to command selling prices for those modules that allow us to maintain traditional semiconductor-only margins for the full module. Currently, and in the coming year at least, modules could represent a large portion of our revenue mix, which would negatively impact our overall gross margin. Certain large customers may decide to buy the modules directly from the manufacturers who purchase our\n\n7\n\nchipsets, rather than us, in order to reduce their costs. This may result in a reduction of our revenue and gross profit, but an improvement of overall gross margin percentage, compared to the case where we sell the modules ourselves.\n\nModule components may be sourced from numerous different suppliers. Some of these components have been and may periodically be in short supply or be subject to long lead times, which could affect our ability to meet customer demand for our modules, therefore delaying our revenue. In addition, we rely on various contract manufacturers to produce our modules. If these manufacturers encounter any issues with production capacity, quality or reliability of their products, it could adversely affect our revenue and our reputation in the market. If our ability to expand our product platform is significantly delayed or if we are unable to leverage our module as expected, our business and financial condition could be materially and adversely affected.\n\nIf customers request from us, and we agree to provide, a wide variety of module variants or stock-keeping units, or SKUs, to support different operators or different end-applications, our expenses associated with developing, sourcing and certifying our module products would increase. In addition, managing supply and demand across multiple SKUs may increase the possibility that we will under-or over-forecast a given SKU, resulting in either delayed revenue or excess inventory.\n\nParticipating in the module business could create a perception among our customers that we are competing with them if they are also in the module business, which could impair our chipset business prospects with such customers. The module can be considered an end product with full 4G LTE functionality; therefore, there is market pressure for us to sell our modules with standard essential IP indemnification from manufacturers of products not normally incorporating a communication function. We intend to seek license agreements for the module in order to offer standard indemnification to our manufacturing partners, but there can be no assurance that we will be successful in obtaining licenses for standard essential IP on acceptable terms.\n\nWe depend on a small number of customers for a significant portion of our revenue. If we fail to retain or expand customer relationships, our business could be harmed.\n\nA significant amount of our total revenue is attributable to a small number of customers, and we anticipate that this will continue to be the case for the foreseeable future. These customers may decide not to purchase our semiconductor solutions and services at all, to purchase fewer semiconductor solutions and services than they did in the past or to alter the terms on which they purchase our products and services. In addition, to the extent that any customer represents a disproportionately high percentage of our accounts receivable, our exposure to that customer is further increased should they be unable or choose not to pay such accounts receivable on a timely basis or at all.\n\nOur top ten customers accounted for 92%, 97% and 88% of our total revenue in 2023, 2024 and 2025 respectively. Two customers each accounted for more than 10% of our total revenue in 2023, three customers each accounted for more than 10% of our total revenue in 2024, and three customers each accounted for more than 10% of our total revenue in 2025. The following table summarizes customers representing a significant portion of total revenue:\n\nCustomer% of total revenues for the year ended December 31,% of our trade receivable at\nDecember 31,\n\n 2023202420252025\n\nA— %53 %33 %— %\n\nBLess than 10%15 %13 %28 %\n\nC56 %12 %Less than 10%— %\n\nD 16 %Less than 10%— %— %\n\nWe expect that some of our customers could each represent at least 10% of our revenue in 2026. The loss of any significant customer, a significant reduction in sales we make to them in general or during any period, or any issues with collection of receivables from customers would harm our financial condition and results of operations. Furthermore, we must obtain orders from new customers on an ongoing basis to increase our revenue and grow our business. If we fail to expand our customer relationships, our business could be harmed.\n\nConsolidation among our customers could also lead to increased customer bargaining power, or reduced customer spending. Further, new business may be delayed if a key customer uses its leverage to push for terms that are worse for us and we nonetheless continue to negotiate for better terms, in which case revenue in any particular quarter or year may fail to meet expectations. Also, the loss of any of these customers or the failure to secure new contracts with these customers could further increase our reliance on our remaining customers. Further, if any of our key customers default, declare bankruptcy or otherwise\n\n8\n\ndelay or fail to pay amounts owed, or we otherwise have a dispute with any of these customers, our results of operations would be negatively affected in the short term and possibly the long term. These customers may seek to renegotiate pre-existing contractual commitments due to adverse changes in their own businesses or, in some cases, take advantage of contractual provisions that permit the suspension of contracted work for some period if their business experiences a financial hardship, which would harm our operating results. To the extent our customers experience liquidity constraints, we may incur bad debt expense, which may have a significant impact on its results of operations. Major customers may also seek pricing, payment, intellectual property-related, or other commercial terms that are less favorable to us, which may have a negative impact on our business, cash flow, revenue and gross margins. In addition, these events could cause significant fluctuations in results of operations because our expenses are fixed in the short term and it takes us a long time to replace customers or reassign resources.\n\nOur customers may cancel their orders, change production quantities or delay production, and if we fail to forecast demand for our products accurately, we may incur product shortages, delays in product shipments or excess or insufficient product inventory, which could harm our business.\n\nWe do not have firm, long-term purchase commitments from our customers. Substantially all of our sales are made on a purchase order basis, and in most cases, our customers are not contractually committed to buy any quantity of products from us beyond firm purchase orders. Additionally, customers may cancel, change or delay purchase orders already in place under certain conditions. Because production lead times often exceed the amount of time required to fulfill orders, we often must manufacture in advance of orders, relying on an imperfect demand forecast to project volumes and product mix. Our ability to accurately forecast demand can be harmed by a number of factors, including inaccurate forecasting by our customers, changes in market conditions, changes in our product order mix and demand for our customers’ products. Even after an order is received, our customers may cancel these orders or request a decrease in production quantities if certain lead times are respected. Any such cancellation or decrease subjects us to a number of risks, most notably, that our projected sales will not materialize on schedule or at all, leading to unanticipated revenue shortfalls and excess or obsolete inventory, which we may be unable to sell to other customers. Alternatively, if we are unable to project customer requirements accurately, we may not manufacture enough semiconductor solutions, which could lead to delays in product shipments and lost sales opportunities in the near term, as well as force our customers to identify alternative sources, which could affect our ongoing relationships with these customers. We have in the past had customers significantly increase their requested production quantities with little or no advance notice. If we do not fulfill customer demands in a timely manner, our customers may cancel their orders, and we may be subject to customer claims for cost of replacement. Underestimating or overestimating demand would lead to insufficient, excess or obsolete inventory and could harm our operating results, cash flow and financial condition, as well as our relationships with our customers and our reputation in the marketplace.\n\nIf customers do not design our semiconductor solutions into their product offerings, or if our customers’ product offerings are not commercially successful, our revenue and our business would be harmed.\n\nWe sell our semiconductor solutions directly to OEMs who include them in their products, and to ODMs who include them in their products that they supply to OEMs. As a result, we rely on OEMs to design our semiconductor solutions into the products they sell. Because our semiconductor solutions are generally a critical component of our customers’ products, they are typically incorporated into our customers’ products at the design stage, and the design cycle typically takes at least 12 months and frequently much more to complete before generating sales of our products. Without these design wins, our revenue and our business would be significantly harmed. We often incur significant expenditures on the development of a new semiconductor solution without any assurance that an OEM will select our semiconductor solution for design into its own product. Because the types of semiconductor solutions we sell are a critical aspect of an OEM’s product, once an OEM designs a competitor’s semiconductor into its product offering, it becomes significantly more difficult for us to sell our semiconductor solutions to that customer for a particular product offering as changing suppliers involves significant cost, time, effort and risk for the customer. Further, if we are unable to develop new products in a timely manner for inclusion in such products, or if major defects or errors that might significantly impair performance or standards compliance are found in our products after inclusion by an OEM, OEMs will be unlikely to include our semiconductor solutions into their products and our reputation in the market and future prospects would be harmed.\n\nFurthermore, even if an OEM designs one of our semiconductor solutions into its product offering, we cannot be assured that its product will be commercially successful and that we will receive any revenue from that OEM. This risk is heightened because some of our customers, particularly in the massive Internet of Things markets, do not have significant experience designing products utilizing 4G technology. If our customers’ products incorporating our semiconductor solutions fail to meet the demands of their customers or otherwise fail to achieve market acceptance, our revenue and business would be harmed.\n\n9\n\nIf we are unable to compete effectively, we may not increase or maintain our revenue or market share, which would harm our business.\n\nWe may not be able to compete successfully against current or potential competitors. If we do not compete successfully, our revenue and market share may decline. We face or expect to face competition from established semiconductor companies such as Qualcomm Incorporated, Nordic Semiconductor, MediaTek and UNISOC Technologies, as well as smaller actors in the market such as Altair Semiconductor (Sony), GCT Semiconductor and Eigencomm.\n\nOur largest competitor is Qualcomm Incorporated, who acquired the intellectual property of certain of our 4G products in 2024. Until we are able to introduce new products, we will be competing against Qualcomm selling similar products, differentiating our offering primarily based our ability to provide better customer support.\n\nMany of our competitors have longer operating histories, significantly greater resources and name recognition, and a larger base of existing customers than us. The significant resources of these larger competitors may allow them to respond more quickly than us to new or emerging technologies or changes in customer requirements or to bring new products to market in a more timely manner than us. For example, some competitors may have greater access or rights to complementary technologies, including GNSS (GPS), Bluetooth, sensors, graphic processing, etc., and we may need to develop or acquire complementary technologies or partner with others to bring to market solutions that integrate enhanced functionalities. We expect to pursue such transactions or partnerships if appropriate opportunities arise. However, we may not be able to identify suitable transactions or partners in the future, or if we do identify such transactions or partners, we may not be able to complete them on commercially acceptable terms, or at all. In addition, these competitors may have greater credibility with our existing and potential customers. Many of these competitors are located in Asia or have a significant presence and operating history in Asia and, as a result, may be in a better position than we are to work with manufacturers and customers located in Asia. Many of our competitors have been doing business with customers for a longer period of time and have well-established relationships, which may provide them with advantages, including access to information regarding future trends and requirements that may not be available to us. In addition, some of our competitors may provide incentives to customers or offer bundled solutions with complementary products, which could be attractive to some customers, or adopt more aggressive pricing policies, which may make it difficult for us to gain or maintain market share.\n\nOur ability to compete effectively will depend on a number of factors, including:\n\n•our ability to anticipate market and technology trends and successfully develop products that meet market needs;\n\n•our ability to deliver products in large volume on a timely basis at competitive prices;\n\n•our ability to technically support our customers in their integration of our technology into their products;\n\n•our success in identifying and penetrating new markets, applications and customers;\n\n•our ability to accurately understand the price points and performance metrics of competing products in the market;\n\n•our products’ performance and cost-effectiveness relative to those of our competitors;\n\n•our ability to develop and maintain relationships with key customers, wireless carriers, OEMs and ODMs;\n\n•our ability to secure sufficient high-quality supply for our products;\n\n•our ability to conform to industry standards while developing new and proprietary technologies to offer products and features previously not available in the 5G markets;\n\n•our ability to develop or acquire complementary technologies or to partner with others to bring to market products with enhanced functionalities; and\n\n•our ability to recruit design and application engineers with expertise in wireless broadband communications technologies and sales and marketing personnel.\n\nOur current or future competitors may establish cooperative relationships among themselves or with third parties. In addition, there has been consolidation within our industry over the past several years, notably the acquisition of smaller competitors by larger competitors with significantly greater resources than ours. These events may result in the emergence of new competitors with greater resources and scale than ours that could acquire significant market share, which could result in a decline of our revenue and market share. Our ability to maintain our revenue and market share will depend on our ability to compete effectively despite material changes in industry structure. If we are unable to do so, we may not increase or sustain our revenue or market share, which would harm our business. In addition, actual or speculated consolidation among competitors, or the acquisition by, or of, our partners and/or resellers by competitors can increase the competitive pressures faced by us as customers may delay spending decisions or not purchase our products at all. Consolidation could also delay spending or require us to reduce the prices of our products to compete, which could also adversely affect our business.\n\nWe have significant ongoing capital requirements that could have a material effect on our business and financial condition if we are unable to generate sufficient cash from operations.\n\n10\n\nOur business requires significant capital investment to carry out extensive research and development to remain competitive. At the same time, demand for our products is highly variable and there have been downturns. If our cash on hand, net proceeds from financing activities including sale of our Bitcoin treasury, and cash generated from operations are not sufficient to fund our operations and capital requirements, we may be required to limit our growth, or enter into financing arrangements at unfavorable terms, any of which could harm our business and financial condition.\n\nAdditionally, we anticipate that strategic alliances and partnerships will be an important source of revenue and possible financing for us going forward. If we are unable to develop alliances with or otherwise attract investment from strategic partners, or if strategic partners are not willing to enter into transactions with us on favorable terms, our business and financial condition could be harmed.\n\nThe semiconductor and communications industries have historically experienced significant fluctuations with prolonged downturns, which could impact our operating results, financial condition and cash flows.\n\nThe semiconductor industry has historically been cyclical, experiencing periods of increased demand and production constraints, including recent supply chain challenges and increases in prices. When this occurs, we may not be able to obtain sufficient quantities of our semiconductor solutions to meet the increased demand, resulting in lost sales, loss of market share and harm to our customer relationships. We may also have difficulty in obtaining sufficient assembly and testing resources from our subcontract manufacturers. The semiconductor industry has periodically experienced significant downturns in customer demand. Because a significant portion of our expenses is fixed in the near term or is incurred in advance of anticipated sales, we may not be able to decrease our expenses rapidly enough to offset any unanticipated shortfall in revenue. If this situation occurs, it could harm our operating results, cash flow and financial condition. Furthermore, any factor adversely affecting the semiconductor industry in general, or the particular segments of the industry that we target, may harm our ability to generate revenue and could negatively impact our operating results.\n\nThe communications industry has experienced pronounced downturns, and these cycles may continue in the future. A future decline in global economic conditions and increasing inflationary pressure could have adverse, wide-ranging effects on demand for our semiconductor solutions and for the products of our customers, particularly wireless communications equipment manufacturers or other participants in the wireless industry, such as wireless carriers. Recent increases in inflation and interest rates and economic recessions that harm the global economy and capital markets also harm our customers and our end consumers. Specifically, the continued deployment of new 5G networks requires significant capital expenditures, and wireless carriers may choose not to undertake network expansion efforts during an economic downturn or time of other economic uncertainty. Our customers’ ability to purchase or pay for our semiconductor solutions and services, obtain financing and upgrade wireless networks could be harmed, and networking equipment providers may slow their research and development activities, cancel or delay new product development, reduce their inventories and take a cautious approach to acquiring our products, which would have a significant negative impact on our business. If such economic situations were to continue or worsen, our operating results, cash flow and financial condition could be harmed. In the future, any of these trends may also cause our operating results to fluctuate significantly from year to year.\n\nWe are subject to risks inherent in our international operations.\n\nOur international revenues account for a substantial majority of our total revenues. As a result, we must provide significant service and support globally. We intend to maintain our international operations and expect to incur costs doing so. We cannot assure you that we will be able to recover our investments in international markets. Our results of operations could be adversely affected by a variety of factors, including:\n\n•the imposition of tariffs on our products or our customers' products,\n\n•the longer payment cycles associated with many foreign customers;\n\n•the typically longer periods from placement of orders to revenue recognition in certain international and emerging markets;\n\n•currency fluctuations;\n\n•the difficulties in interpreting or enforcing our agreements and collecting receivables through many foreign countries’ legal systems;\n\n•unstable regional political and economic conditions or changes in restrictions on trade among countries;\n\n•changes in the political, regulatory, safety or economic conditions in a country or region;\n\n•the imposition by governments of additional taxes, tariffs, global economic sanctions programs or other restrictions on foreign trade, including U.S. and Chinese tariffs and trade restrictions;\n\n11\n\n•any inability to comply with export or import laws and requirements or any violation of sanctions regulations, which may result in enforcement actions, civil or criminal penalties and restrictions on exports;\n\n•any increase in the cost of trade compliance functions to comply with changes to regulatory requirements; and\n\n•the possibility that it may be more difficult to protect our intellectual property in foreign countries.\n\nThe U.S. Administration has increased the use of tariffs by the United States to accomplish certain U.S. policy goals. The imposition of any additional taxes and levies on our products could adversely affect the demand for our products and our results of operations. Such tariffs and any countermeasures could also increase the cost of components necessary for our operations, disrupt our supply chain and create additional operational challenges. Further, it is possible that government policy changes and related uncertainty about policy changes could increase market volatility. Because of these dynamics, we cannot predict the impact of any future changes to the United States’ or other countries’ trading relationships or the impact of new laws or regulations adopted by the United States or other countries on our business. Such changes in tariffs and trade regulations could have a material adverse effect on our financial condition, results of operations and cash flows.\n\nIn addition, our global operations are subject to numerous U.S. and foreign laws and regulations, including those related to anti-corruption, tax, corporate governance, imports and exports, financial and other disclosures, privacy and labor relations. These laws and regulations are complex and may have differing or conflicting legal standards, making compliance difficult and costly. In addition, there is uncertainty regarding how proposed, contemplated or future changes to these complex laws and regulations could affect our business. We may incur substantial expense in complying with the new obligations to be imposed by these laws and regulations, and we may be required to make significant changes in our business operations, all of which may adversely affect our revenues and our business overall. If we violate these laws and regulations we could be subject to fines, penalties or criminal sanctions, and may be prohibited from conducting business in one or more countries. Although we have implemented policies and procedures to help ensure compliance with these laws and regulations, there can be no assurance that our employees, contractors, agents or partners will not violate such laws and regulations. Any violation individually or in the aggregate could have a material adverse effect on our operations and financial condition.\n\nOur business may be impacted by political events, war, terrorism, business interruptions and other geopolitical events and uncertainties beyond our control, including the Russian-Ukraine conflict and Middle East conflicts.\n\nWar, terrorism, geopolitical uncertainties and other business interruptions could cause damage to, disrupt or cancel sales of our products and services on a global or regional basis, which could have a material adverse effect on our business or vendors with which we do business. Such events could also make it difficult or impossible for us to deliver products and services to our customers, or to advance our product development efforts. In addition, territorial invasions can lead to cybersecurity attacks on technology companies, such as ours, located far outside of the conflict zone. In the event of prolonged business interruptions due to geopolitical events, we could incur significant losses, require substantial recovery time and experience significant expenditures to resume our business operations.\n\nWe outsource some application software development and testing activities to a Kyiv, Ukraine-based dedicated team of 22 software engineers from a global US-based independent third-party provider of engineering services. If the ongoing Russian-Ukraine conflict intensifies, or if Ukraine experiences further political instability, the engineers in Ukraine may be unable to work for a sustained period of time, which could adversely impact our research and development operations. We also have operations and 25 employees in Israel. We have developed contingency plans if these engineers are unable to continue working on their projects for us for a sustained period of time, but if our contingency plans are not effective, or sanctions are imposed that prevent us from conducting business in Ukraine or Israel, we could suffer delays in product introduction or delays in resolution of customer software bugs, which could have a negative impact on our revenues.\n\nWe do not and cannot know if the current uncertainties in these geopolitical areas, which are unfolding in real-time, may escalate and result in broad economic and security conditions, which could result in material implications for our business. In addition, our insurance policies typically contain a war exclusion and we do not know how our insurers are likely to respond in the event of a loss alleged to have been caused by geopolitical uncertainties.\n\nWe depend on the commercial deployment and expansion for 5G narrow band variants communications equipment, products and services to grow our business, and our business may be harmed if wireless carriers delay in the expansion of 5G narrow band standards, or if they deploy technologies that are not supported by our solutions.\n\nWe depend upon the continued commercial deployment of 5G wireless communications equipment, products and services based on our technology. Deployment of new networks by wireless carriers requires significant capital expenditures, well in advance of any revenue from such networks. If the rate of deployment of new networks or their expansion by wireless\n\n12\n\ncarriers is slower than we expect, this will reduce the sales of our products and could cause OEMs and ODMs to hold excess inventory. This would harm our revenues and our financial results.\n\nThe worldwide commercial deployment and adoption of the narrow band 5G variants are expected to expand further the markets for Internet of Things devices. If deployments of the 5G standards are delayed or if competing standards for Internet of Things devices become favored by wireless carriers, we may not be able to successfully increase sales of our 5G products, which would harm our revenues and our financial results.\n\nRapidly changing standards could make our semiconductor solutions obsolete, which would cause our operating results to suffer.\n\nWe design our semiconductor solutions to conform to standards set by industry standards bodies such as the Institute of Electrical and Electronics Engineers, Inc. (IEEE), the 3rd Generation Partnership Project (3GPP) and Open Mobile Alliance (OMA). We also depend on industry groups such as the Global Certification Forum (GCF) and the PTS Type Certification Review Board (PTCRB) to help certify and maintain certification of our semiconductor solutions. If our customers adopt new or competing industry standards that are not compatible with our semiconductor solutions, if industry groups fail to adopt standards compatible with our semiconductor solutions or if our customers are requiring chip certifications that we did not design our products for, our existing semiconductor solutions would become less desirable to our customers and our sales would suffer. The emergence of markets for our products is affected by a variety of factors beyond our control. In particular, our semiconductor solutions are designed to conform to current specific industry standards. Competing standards may emerge that are preferred by our customers, which could also reduce our sales and require us to make significant expenditures to develop new semiconductor solutions. For example, in the Internet of Things markets, we could face indirect competition from companies using alternative technologies such as LoRa Wireless RF technology, a long range, low power consumption and data transmission protocol for Internet of Things devices. Wireless carriers started deploying 5G technology, the next phase of mobile telecommunications standards, beginning in 2020. If we are unable to successfully develop or commercialize products for the 5G standard, our semiconductor solutions could become obsolete, which would cause our sales and financial results to suffer. Governments and foreign regulators may adopt standards that are incompatible with our semiconductor solutions, favor alternative technologies or adopt stringent regulations that would impair or make commercially unviable the deployment of our semiconductor solutions. In addition, existing standards may be challenged as infringing upon the intellectual property rights of other companies or may become obsolete.\n\nThe average selling prices of our semiconductor solutions have historically decreased over time and will likely do so in the future, which could harm our gross profits and financial results.\n\nAverage selling prices of our semiconductor solutions have historically decreased over time, although such decreases were reduced or eliminated during the inflationary period from 2022 to 2025. In general, we expect such declines to continue to occur in the future for similar products with similar features, although in times of overall cost increases in the industry for silicon and components, we may be able to pass on some or all cost increases to our customers. Our gross profits and financial results will suffer if we are unable to offset reductions in our average selling prices by reducing our costs, developing new or enhanced semiconductor solutions on a timely basis with higher selling prices or gross profits, or increasing our sales volumes. Even if we are successful in reducing our costs or improving sales volumes, such improvements may not be sufficient to offset declines in average selling prices in the future. Additionally, because we do not operate our own manufacturing, assembly or testing facilities, we may not be able to reduce our costs and our costs may even increase, either of which would reduce our margins if we are not able to pass on cost increases to customers in the form of higher sales prices. In the past, we have reduced the prices of our semiconductor solutions in line with, and at times in advance of, competitive pricing pressures, new product introductions by us or our competitors and other factors. We expect that we will have to do so again in the future.\n\n13\n\nFluctuations in foreign exchange rates may harm our financial results.\n\nOur functional currency is the U.S. dollar. Substantially all of our sales are denominated in U.S. dollars, and the payment terms of all of our significant supply chain vendors are also denominated in U.S. dollars. We incur operating expenses and hold assets and liabilities denominated in currencies other than the U.S. dollar, principally the euro, and to a lesser extent the British pound sterling, the Swiss franc and the New Israeli shekel. As a result, our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, in particular the U.S. dollar to euro exchange rate. If there had been a 10% increase or decrease in the exchange rate of the U.S. dollar to the euro, as measured using the Company's 2025 weighted average exchange rate of one euro = $1.1190, we estimate the impact, in absolute terms, on operating expenses and on financial liabilities for the year ended December 31, 2025 would have been $2.5 million.\n\nOur exposure to foreign currency risk may change over time as business practices evolve and economic conditions change.\n\nWe from time to time enter into foreign currency hedging contracts primarily to reduce the impact of variations in the U.S. dollar to euro exchange rate on our operating expenses denominated in euros. However, hedging at best reduces volatility and helps to lock in a target rate for the following six to twelve months but cannot eliminate the fundamental exposure and may not be effective.\n\nOur global operations are subject to risks for which we may not be adequately insured.\n\nOur global operations are subject to many risks including errors and omissions, infrastructure disruptions, such as large-scale outages or interruptions of service from utilities or telecommunications providers, supply chain interruptions, third-party liabilities and fires or natural disasters. In addition, we have been in the past, and may in the future be, subject to securities litigation. No assurance can be given that we will not incur losses beyond the limits or outside the scope of coverage of our insurance policies. From time-to-time, various types of insurance may not be available on commercially acceptable terms or, in some cases, at all. We cannot assure you that in the future we will be able to maintain existing insurance coverage or that premiums will not increase substantially. We maintain limited insurance coverage and in some cases no coverage for cyber security incidents, natural disasters and sudden and accidental environmental damages as these types of insurance are sometimes not available or available only at a prohibitive cost. Accordingly, we may be subject to an uninsured or under-insured loss in such situations.\n\nThe complexity of our semiconductor solutions could result in unforeseen delays or expenses from undetected defects or design errors in hardware or software, which could reduce the market acceptance for our semiconductor solutions, damage our reputation with current or prospective customers and increase our costs.\n\nHighly complex semiconductor solutions such as ours can contain defects and design errors, which, if significant, could impair performance or prevent compliance with industry standards. We have not in the past, but may in the future, experience such significant defects or design errors. In addition, our semiconductor solutions must be certified by individual wireless carriers that such solutions function properly on the carrier’s network before our solutions can be designed into a particular product. If any of our semiconductor solutions have reliability, quality or compatibility problems from defects or design errors, we may not be able to successfully correct these problems in a timely manner, or at all. Furthermore, we may experience production delays and increased costs correcting such problems. Issues in the carrier certification process, which varies among carriers, may also create delays. Consequently, and because our semiconductor solutions are a critical component of our customers’ products, our reputation may be irreparably damaged, and customers may be reluctant to buy our semiconductor solutions, which could harm our ability to retain existing customers and attract new customers and harm our financial results. In addition, these defects or design errors or delays in the carrier certification process could interrupt or delay sales to our customers. If any of these problems are not found until after we have commenced commercial production of a new semiconductor solution, we may be required to incur additional development costs and product recalls, repairs or replacement costs. Furthermore, we provide warranties on our products ranging from one to two years, and thus may be obligated to refund sales with respect to products containing defects, errors or bugs. These problems may also result in claims against us by our customers or others, all of which could damage our reputation and increase our costs.\n\nRisks Related to the Manufacture of Our Products\n\nGlobal supply chain shortages may adversely affect our business.\n\n14\n\nAny disruptions to our supply chain, significant increase in component costs, or shortages of critical components, could decrease our sales, earnings, and liquidity or otherwise adversely affect our business and result in increased costs. For example, in 2021 and 2022, we experienced significant supply constraints for PCB and other standard components, including crystals and flash, and our supply of silicon wafers from Taiwan Semiconductor Manufacturing Company Limited, or TSMC, were placed on allocation. We are currently experiencing industry-wide capacity constraints for components such as memory as well as in our supply of silicon wafers from TSMC and expect such constraints to continue throughout 2026 at least. The allocation of wafers has impacted our ability to fulfill customer orders in the past, and we may not get sufficient allocation to meet demand in the future. Such a disruption could occur as a result of any number of events, including, but not limited to: an extended closure of or any slowdown at our suppliers' plants or shipping delays due to global pandemics, market shortages due to the surge in demand from other purchasers for critical components, increases in prices, the imposition of regulations, quotas or embargoes or tariffs on components or our products themselves, labor stoppages, transportation delays or failures affecting the supply chain and shipment of materials and finished goods, third-party interference in the integrity of the products sourced through the supply chain, cyberattacks, the unavailability of raw materials, severe weather conditions, adverse effects of climate change, natural disasters, geopolitical developments, war or terrorism and disruptions in utilities and other services. In addition, the development, licensing, or acquisition of new products in the future may increase the complexity of supply chain management. Failure to effectively manage the supply of components and products would adversely affect our business.\n\nCertain natural disasters, such as fires, coastal flooding, large earthquakes, volcanic eruptions or pandemics, may negatively impact our business. Any disruption to the operations of our foundry and assembly and testing subcontractors or our supply chain could cause significant delays in the production or shipment of our products.\n\nIf fires, coastal flooding, a large earthquake, volcanic eruption, new pandemic or other natural disaster were to directly damage, destroy or disrupt our partners’ manufacturing facilities or the facilities of our testing, assembly and manufacturing contractors or our component suppliers, it could disrupt our operations, delay new production and shipments of existing inventory, or result in costly repairs, replacements, the need to find alternative suppliers or other costs, all of which would negatively impact our business. If such events occur and we are unable to qualify additional suppliers prior to exhausting our current inventory or are unable to source alternative components in sufficient quantity, we could experience significant delays in the production or shipment of our semiconductor solutions or experience significant increases in our supply chain costs until we are able to shift our supply to an alternative vendor. These events and their consequences could negatively impact our results of operations and cash flows, both during and after the period of operational difficulties, and could harm our reputation.\n\nWe depend on one independent foundry to manufacture our semiconductor wafers and do not have a long-term agreement with such foundry, and loss of this foundry or our failure to obtain sufficient foundry capacity would significantly delay our ability to ship our products, cause us to lose revenue and market share and damage our customer relationships.\n\nAccess to foundry capacity is critical to our business because we are a fabless semiconductor company. We depend on a sole independent foundry, TSMC in Taiwan, to manufacture our semiconductor wafers. Because we outsource our manufacturing to a single foundry, we face several significant risks, including:\n\n•constraints in or unavailability of manufacturing capacity;\n\n•limited control over delivery schedules, quality assurance and control, manufacturing yields and production costs; and\n\n•the unavailability of, or potential delays in obtaining access to, key process technologies.\n\nIf we do not accurately forecast our capacity needs, TSMC may not have available capacity to meet our immediate needs, or we may be required to pay higher costs to fulfill those needs, either of which could harm our business, results of operations or financial condition.\n\nThe ability of TSMC to provide us with semiconductor wafers is limited at any given time by their available capacity, and we do not have a guaranteed level of manufacturing capacity. We do not have any agreement with TSMC and place our orders on a purchase order basis. As a result, if TSMC raises its prices due to inflationary pressures or is not able to satisfy our required capacity for any reason, including natural or other disasters or as a result of factory shutdowns, allocates capacity to larger customers or to different sectors of the semiconductor industry, experiences labor issues or shortages or delays in shipment of semiconductor equipment or materials used in the manufacture of our semiconductors, or if our business relationship with TSMC deteriorates, we may not be able to obtain the required capacity and would have to seek alternative foundries, which may not be available on commercially reasonable terms, in a timely manner, or at all. If demand in 2025 increases, our ability to meet all our customer demand could be limited, with a corresponding negative impact on revenues.\n\nLocating and qualifying a new foundry would require a significant amount of time, which would result in a delay in production of our products, and cost, as new production masks would be required. In addition, using foundries with which we\n\n15\n\nhave no established relationship could expose us to unfavorable pricing and terms, delays in developing and qualifying new products, unsatisfactory quality or insufficient capacity allocation. We place our orders on the basis of our customers’ purchase orders and sales forecasts; however, foundries can allocate capacity to the production of other companies’ products and reduce deliveries to us on short notice. Many of the customers of TSMC, or foundries that we may use in the future, are larger than we are, or have long-term agreements with such foundries, and as a result, those customers may receive preferential treatment from the foundries in terms of price, capacity allocation and payment terms. Any delay in qualifying a new foundry or production issues with any new foundry would result in lost sales and could damage our relationship with existing and future customers as well as our reputation in the market.\n\nIf our foundry vendor does not achieve satisfactory yields or quality, our reputation and customer relationships could be harmed.\n\nThe fabrication of semiconductor solutions such as ours is a complex and technically demanding process. Minor deviations in the manufacturing process can cause substantial decreases in yields, and in some cases, cause production to be suspended. TSMC, or foundries that we may use in the future, could, from time to time, experience manufacturing defects and reduced manufacturing yields. Changes in manufacturing processes or the inadvertent use of defective or contaminated materials by our foundry vendor could result in lower than anticipated manufacturing yields or unacceptable performance. Many of these problems are difficult to detect at an early stage of the manufacturing process and may be time consuming and expensive to correct. Poor yields from our foundry vendor, or defects, integration issues or other performance problems in our semiconductor solutions could cause us significant customer relations and business reputation problems, harm our financial results and result in financial or other damages to our customers. In addition, because we have a sole supplier of wafers, these risks are magnified because we do not have an alternative source to purchase from should these risks materialize. If TSMC fails to provide satisfactory products to us, we would be required to identify and qualify other sources, which could take a significant amount of time and would result in lost sales. In addition, we indemnify our customers for losses resulting from defects in our products, which costs could be substantial. A product liability or other indemnification claim brought against us, even if unsuccessful, would likely be time-consuming and costly to defend.\n\nAny increase in the manufacturing cost of our products would reduce our gross margins and operating profit.\n\nThe semiconductor business is characterized by ongoing competitive pricing pressure from customers and competitors. Accordingly, any increase in the cost of our products, whether by adverse purchase price or manufacturing cost variances, inflationary pressures, or due to other factors such as tariffs, will reduce our gross margins and operating profit. For example, in 2025, sustained demand for AI‑driven computing, memory, and data‑center technologies contributed to capacity constraints across the semiconductor supply chain, prompting several of our suppliers to implement price increases. While we were generally able to reflect these higher input costs in our pricing to customers during the year, there is no assurance that we will be able to do so in future periods, which could adversely affect our margins. We do not have long-term supply agreements with our manufacturing, testing or assembly suppliers, although with large suppliers we typically negotiate pricing on an annual basis. With other suppliers we typically negotiate on a purchase order by purchase order basis. We may not be able to obtain price reductions, or anticipate or prevent future price increases from our suppliers. Because we have a sole supplier of wafers and limited sources of testing and assembly for both chipsets and modules, we may not be able to negotiate favorable pricing terms from our suppliers. These and other related factors could impair our ability to control our costs and could harm our operating results.\n\nWe outsource our assembly, testing, warehousing and shipping operations to third parties, and if these parties fail to produce and deliver our products in a timely manner and in accordance with our specifications, our reputation, customer relationships and operating results could suffer.\n\nWe rely on third parties for the assembly, testing, warehousing and shipping of our products. We currently rely on outsourced semiconductor assembly and test (OSAT) suppliers such as Advanced Semiconductor Engineering ChungLi (ASECL), Advanced Semiconductor Engineering, Inc. (ASEKH) and Silicon Precision Industries Limited (SPIL) and for most of our chipset assembly and testing. We rely on Asiatel Technologies Co. and WNC, NEWEB Vietnam Co Ltd. for manufacturing of our modules. We further rely on a single company for logistics and storage. We depend on these parties to supply us with material of a requested quantity in a timely manner that meets our standards for yield, cost and manufacturing quality. We are unable to maintain the same level of oversight and control of these outsourced operations as we would if we were to conduct them internally.\n\n16\n\nThe services provided by these vendors could be subject to disruption for a variety of reasons, including natural disasters, such as earthquakes, labor disputes, power outages, or if our relationship with a vendor is damaged. If we experience problems at a particular location, we would be required to transfer the impacted services to a backup vendor, which could be costly and require a significant amount of time. During such a transition, we would be required to meet customer demand from our then-existing inventory, as well as any partially finished goods that can be modified to the required product specifications, which may not be possible or cost effective. Further, we do not have any long-term agreements with most of these vendors. If one or more of these vendors terminates its relationship with us, allocates capacity to other customers or if we encounter any problems with our supply chain, it could harm our ability to ship our products to our customers on time and in the quantity required, which in turn could cause an unanticipated decline in our sales and possibly damage our customer relationships.\n\nIf we fail to obtain or maintain an Approved IC Designer role under U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) rules, exports of our advanced IC designs or related components could be prohibited, which could materially and adversely affect our business, financial condition, and results of operations.\n\nThe U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) has established stringent export control regulations governing the design, development, and export of advanced integrated circuit (“IC”) technologies. In order to export certain advanced IC designs or related components, companies must obtain and maintain an Approved IC Designer role. If we are unable to obtain or maintain this status, we may be prohibited from exporting our advanced IC designs or related components to certain customers, regions, or end-users.\n\nFailure to comply with BIS rules could result from a variety of factors, including changes in regulatory requirements, evolving interpretations of export control laws, administrative errors, or deficiencies in our internal compliance programs. Any such failure could lead to the suspension or revocation of our export privileges, the imposition of significant civil or criminal penalties, and reputational harm. In addition, the inability to export our products could result in the loss of key customers, reduced revenue, and diminished competitiveness in global markets.\n\nFurthermore, the process of obtaining and maintaining Approved or Authorized IC Designer status is complex and resource-intensive, requiring ongoing investment in compliance infrastructure, employee training, and legal oversight. Any future changes to BIS regulations or enforcement priorities could increase our compliance burden or restrict our ability to serve certain markets. As a result, our business, financial condition, and results of operations could be materially and adversely affected if we are unable to obtain or maintain the necessary BIS approvals or if our compliance attestations are deemed insufficient.\n\nWe may experience difficulties in transitioning to new wafer fabrication process technologies or in achieving higher levels of design integration, which may result in reduced manufacturing yields, delays in product deliveries and increased costs.\n\nTo remain competitive, we expect to continue to transition our semiconductor products to increasingly smaller geometries and to achieve higher levels of design integration. These ongoing efforts require us from time to time to modify the manufacturing processes for our semiconductor solutions and to redesign some solutions, which in turn may result in delays in product deliveries. We periodically evaluate the benefits of migrating to new process technologies to reduce cost and improve performance. We may face difficulties, delays and increased expenses as we transition our products to new processes. We depend on our relationship with TSMC and our testing and assembly subcontractors to transition to new processes successfully. We cannot assure you that TSMC or our testing and assembly subcontractors will be able to effectively manage the transition or that we will be able to maintain our relationship with TSMC or our testing and assembly vendors or develop relationships with new foundries and vendors if necessary. If TSMC, any of our subcontractors or we experience significant delays in transitioning to smaller geometries or fail to efficiently implement transitions, we could experience reduced manufacturing yields, or delays in product deliveries and increased costs, all of which could harm our relationships with our customers, our margins and our operating results. As new processes become more prevalent, we expect to continue to integrate greater levels of functionality, as well as end-customer and third-party intellectual property, into our products. However, we may not be able to achieve higher levels of design integration or deliver new integrated products on a timely or cost-effective basis.\n\nRisks Related to Our Bitcoin Strategy and Holdings\n\nOur Bitcoin strategy exposes us to various risks, including risks associated with Bitcoin.\n\n17\n\nBitcoin is a highly volatile asset. Bitcoin is a highly volatile asset that has traded below $50,000 per Bitcoin and above $120,000 per Bitcoin in the past two years. The trading price of Bitcoin has decreased significantly since July 2025, and further declines may occur again in the future.\n\nOur assets are currently concentrated in Bitcoin. A large portion of our assets are currently concentrated in our Bitcoin holdings. The concentration of our assets in Bitcoin limits our ability to mitigate risk that could otherwise be achieved by holding a more diversified portfolio of treasury assets.\n\nWe are subject to counterparty risks, including in particular risks relating to our custodians. Although we believe we mitigate our counterparty risks by storing all of the Bitcoin we own in custody accounts at a U.S.-based, institutional-grade custodian and negotiating contractual arrangements intended to establish that our property interest in custodially-held Bitcoin is not subject to claims of our custodians’ creditors, applicable insolvency law is not fully developed with respect to the holding of digital assets in custodial accounts. If our custodially-held Bitcoin were nevertheless considered to be the property of our custodians’ estates in the event that any such custodians were to enter bankruptcy, receivership or similar insolvency proceedings, we could be treated as a general unsecured creditor of such custodians, inhibiting our ability to exercise ownership rights with respect to such Bitcoin, or delaying or hindering our access to our Bitcoin holdings, and this may ultimately result in the loss of the value related to some or all of such Bitcoin, which could have a material adverse effect on our financial condition as well as the market price of our ADSs.\n\nThe broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price, and use of Bitcoin. A series of high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital assets industry in recent years have highlighted the counterparty risks applicable to owning and transacting in digital assets. Although these bankruptcies, closures, liquidations and other events have not resulted in any loss or misappropriation of our Bitcoin, nor have such events adversely impacted our access to our Bitcoin, they have, in the short-term, likely negatively impacted the adoption rate and use of Bitcoin. Additional bankruptcies, closures, liquidations, regulatory enforcement actions or other events involving participants in the digital assets industry in the future may further negatively impact the adoption rate, price, and use of Bitcoin, limit the availability to us of financing collateralized by Bitcoin, or create or expose additional counterparty risks.\n\nChanges in the accounting standards or our strategy related to our Bitcoin holdings could have significant accounting impacts, including increasing the volatility of our results. In accordance with IAS 38 Intangible Assets, we account for the investment in Bitcoin as an intangible asset, with any decrease in the market value of the investment reflected at each balance sheet date. Under International Financial Reporting Standards (“IFRS”), reductions in value below historical cost are recorded as losses in the statement of profit and loss. Gains are not reflected in the statement of profit and loss until realized. This differs from US Generally Accepted Accounting Principles (US GAAP) Accounting Standard Update (ASU) 2023-08 which requires companies to measure their Bitcoin holdings at fair value in the statement of financial position, and to recognize gains and losses from changes in the fair value of Bitcoin in net income each reporting period. Should IFRS accounting standards change in the future to converge with US GAAP, the volatility in the price of Bitcoin could have a material impact on our financial results, increase the volatility of our financial results, and affect the carrying value of our Bitcoin on our balance sheet. These impacts could in turn have a material adverse effect on our financial results and the market price of our ADSs.\n\nOur Bitcoin strategy subjects us to heightened regulatory scrutiny. Our Bitcoin strategy exposes us to heightened regulatory scrutiny from the SEC and other agencies. There are increased risks related to anti-money laundering, sanctions compliance, and the potential for regulatory actions if the company inadvertently transacts with illicit actors. Using Bitcoin as collateral and engaging in related financial strategies may trigger additional compliance requirements under money transmission, commodities, and securities laws. Regulatory focus on digital assets has intensified following events like the FTX collapse, which could lead to higher costs or restrictions. Additionally, private institutions may take actions that negatively affect the company due to concerns about its Bitcoin exposure.\n\nThe emergence or growth of other digital assets could have a negative impact on the price of Bitcoin and adversely affect our business. Our financial condition is particularly exposed to this risk because our assets are concentrated in Bitcoin. Alternative digital assets, such as Ethereum—which has adopted a more energy-efficient validation method—and stablecoins, which are designed to maintain a constant value, are gaining popularity and market share. Additionally, central banks are developing their own digital currencies (CBDCs), which could further compete with or even replace Bitcoin as a medium of exchange or store of value. If these alternatives are perceived as superior or become widely adopted, the demand for Bitcoin could decrease, adversely affecting our business and financial results.\n\n18\n\nThe broader digital assets industry, including the technology associated with digital assets, the rate of adoption and development of, and use cases for, digital assets, market perception of digital assets, and the legal, regulatory, and accounting treatment of digital assets are constantly developing and changing, and there may be additional risks in the future that are not possible to predict.\n\nBitcoin is a highly volatile asset, and fluctuations in the price of Bitcoin are likely to continue to influence our financial results and the market price of our ADSs.\n\nBitcoin is a highly volatile asset, and fluctuations in the price of Bitcoin have and are likely to continue to influence our financial results and the market price of our ADSs. Our financial results and the market price of our ADSs have been and may continue to be adversely affected, and our business and financial condition would be negatively impacted, if the price of Bitcoin decreased substantially (as it has in the past, including in 2022 and since July 2025).\n\nOur operating results are dependent on the price of Bitcoin. If such price declines, our business, operating results, and financial condition would be adversely affected.\n\nAny declines in the volume of Bticoin transactions, the price of Bitcoin, or market liquidity for Bitcoin may adversely affect our operating results. As part of our Bitcoin strategy, we have significant investments in Bitcoin. Our operating results will be impacted by the change in value of Bitcoin, and should the Company purchase, sell or trade Bitcoin in the future, by the revenue and profits we may generate from such purchases, sales or trades and the financial contracts linked to Bitcoin. The price of digital assets and associated demand for buying, selling, and trading of digital assets have historically been subject to significant volatility. For instance, in 2017 and 2021, the value of certain digital assets, including Bitcoin, experienced steep increases in value, followed by steep declines in 2018 and 2022. After recovering from the 2018 decline and reaching record highs in December 2021, the value of the total crypto market cap declined by approximately 64% in the twelve months ended December 31, 2022. The collapse of several companies in the digital assets industry such as Celsius, Voyager and FTX impacted digital assets prices in 2022 and the majority of 2023. Since October 2025 when Bitcoin hit a high of over $125,000 per Bitcoin, the price has dropped to as low as $65,540. The price and trading volume of any digital asset is subject to significant uncertainty and volatility, and may significantly decline in the future, without recovery.\n\nThere is no assurance that any digital asset will maintain its value or that there will be meaningful levels of trading activities. For example, in 2022 we witnessed dampened demand for trading digital assets in the wake of industry turmoil. Since October 2025 when Bitcoin hit a high of over $125,000 per Bitcoin, the price has dropped to as low as $65,540. If the price of digital assets or the demand for trading digital assets continue to decline, our business, operating results, and financial condition could be adversely affected.\n\nOur Bitcoin strategy subjects us to enhanced regulatory oversight.\n\nSeveral spot Bitcoin ETPs have received approval from the SEC to list their shares on a U.S. national securities exchange with continuous share creation and redemption at net asset value. Even though we are not, and do not function in the manner of, a spot Bitcoin ETP, it is possible that we nevertheless could face regulatory scrutiny from the SEC or other federal or state agencies due to our Bitcoin holdings.\n\nIn addition, there has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to the ongoing conflict between Russia and Ukraine. While we have implemented and maintain policies and procedures reasonably designed to promote compliance with applicable anti-money laundering and sanctions laws and regulations and take care to only acquire our Bitcoin through entities subject to anti-money laundering regulation and related compliance rules in the United States, if we are found to have purchased any of our Bitcoin from bad actors that have used Bitcoin to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or dealings in Bitcoin by us may be restricted or prohibited.\n\nA significant portion of our current Bitcoin holdings serve as collateral securing our outstanding indebtedness pursuant to the secured convertible debentures that we issued on July 7, 2025 (the “Secured Convertible Debentures”), and may continue to serve as collateral for such indebtedness in the future. We may also consider pursuing strategies to create income streams or otherwise generate funds using our Bitcoin holdings. These types of Bitcoin-related transactions are the subject of enhanced regulatory oversight. These and any other Bitcoin-related transactions we may enter into, beyond simply acquiring and holding Bitcoin, may subject us to additional regulatory compliance requirements and scrutiny, including under federal and state money services regulations, money transmitter licensing requirements and various commodity and securities laws and regulations.\n\n19\n\nAdditional laws, guidance and policies may be issued by domestic and foreign regulators following the filing for Chapter 11 bankruptcy protection by FTX, one of the world’s largest cryptocurrency exchanges, in November 2022. The FTX collapse may have increased regulatory focus on the digital assets industry. Increased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of new or varying regulatory requirements by the government or any new legislation affecting Bitcoin, as well as enforcement actions involving or impacting our trading venues, counterparties and custodians, may impose significant costs or significantly limit our ability to hold and transact in Bitcoin.\n\nIn addition, private actors that are wary of Bitcoin or the regulatory concerns associated with Bitcoin have in the past taken and may in the future take further actions that may have an adverse effect on our business or the market price of our ADSs. For example, it is possible that a financial institution could restrict customers from buying shares of our ADSs if it were to determine that our ADSs’ value is closely tied to the performance of Bitcoin, signaling a reluctance to facilitate exposure to virtual currencies.\n\nDue to the unregulated nature and lack of transparency surrounding the operations of many Bitcoin trading venues, Bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in Bitcoin trading venues and adversely affect the value of our Bitcoin.\n\nBitcoin trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many Bitcoin trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in Bitcoin trading venues, including prominent exchanges that handle a significant volume of Bitcoin trading and/or are subject to regulatory oversight, in the event one or more Bitcoin trading venues cease or pause for a prolonged period the trading of Bitcoin or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.\n\nIn 2019, there were reports claiming that 80-95% of Bitcoin trading volume on trading venues was false or non-economic in nature, with specific focus on unregulated exchanges located outside of the United States. The SEC also alleged as part of its June 5, 2023, complaint against Binance Holdings Ltd. that Binance committed strategic and targeted “wash trading” through its affiliates to artificially inflate the volume of certain digital assets traded on its exchange. The SEC has also brought recent actions against individuals and digital assets market participants alleging that such persons artificially increased trading volumes in certain digital assets through wash trades, or repeated buying and selling of the same assets in fictitious transactions to manipulate their underlying trading price. Such reports and allegations may indicate that the Bitcoin market is significantly smaller than expected and that the United States makes up a significantly larger percentage of the Bitcoin market than is commonly understood. Any actual or perceived wash trading in the Bitcoin market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of our Bitcoin.\n\nNegative perception, a lack of stability in the broader Bitcoin markets and the closure, temporary shutdown or operational disruption of Bitcoin trading venues, lending institutions, institutional investors, institutional miners, custodians, or other major participants in the Bitcoin ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy, or for any other reason, may result in a decline in confidence in Bitcoin and the broader Bitcoin ecosystem and greater volatility in the price of Bitcoin. For example, in 2022, each of Celsius Network, Voyager Digital, Three Arrows Capital, FTX, and BlockFi filed for bankruptcy, following which the market prices of Bitcoin and other digital assets significantly declined. In addition, in June 2023, the SEC announced enforcement actions against Coinbase, Inc., and Binance Holdings Ltd., two providers of large trading venues for digital assets, which similarly was followed by a decrease in the market price of Bitcoin and other digital assets. These were followed in November 2023, by an SEC enforcement action against Payward Inc. and Payward Ventures Inc., together known as Kraken, another large trading venue for digital assets. While the complaint against Coinbase, Inc. was dismissed in February 2025, the complaint against Payward Inc. and Payward Ventures Inc. was dismissed with prejudice in March 2025, and the complaint against Binance Holdings Ltd. was dismissed on May 29, 2025, the SEC or other regulatory agencies may initiate similar actions in the future. As the price of our ADSs is affected by the value of our Bitcoin holdings, the failure of a major participant in the Bitcoin ecosystem could have a material adverse effect on the market price of our ADSs.\n\nThe concentration of our Bitcoin holdings could enhance the risks inherent in our Bitcoin strategy.\n\nThe concentration of our Bitcoin holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our Bitcoin strategy. Any future significant declines in the price of Bitcoin would have, a more pronounced impact on our financial condition than if we used our cash to purchase a more diverse portfolio of assets.\n\n20\n\nOur Bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.\n\nHistorically, the Bitcoin market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, we may not be able to sell our Bitcoin at favorable prices or at all. For example, a number of Bitcoin trading venues temporarily halted deposits and withdrawals in 2022. As a result, our Bitcoin holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.\n\nFurther, Bitcoin we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.\n\nAdditionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered Bitcoin or otherwise generate funds using our Bitcoin holdings, including in particular during times of market instability or when the price of Bitcoin has declined significantly. If we are unable to sell our Bitcoin, enter into additional capital raising transactions, including capital raising transactions using Bitcoin as collateral, or otherwise generate funds using our Bitcoin holdings, or if we are forced to sell our Bitcoin at a significant loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.\n\nIf we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our Bitcoin, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our Bitcoin and our financial condition and results of operations could be materially adversely affected.\n\nSubstantially all of the Bitcoin we own will be held in custody accounts at one or more institutional-grade digital assets custodians. Further, third-party service providers provide us with material services in connection with the Bitcoin strategy. Security breaches and cyberattacks are of particular concern with respect to our Bitcoin. Bitcoin and other blockchain-based cryptocurrencies and the entities that provide services to participants in the Bitcoin ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities. For example, in October 2021 it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts of at least 6,000 customers of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers. Similarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital assets exchange and reportedly stole over $400 million in digital assets from customers. A successful security breach or cyberattack could result in:\n\n•a partial or total loss of our Bitcoin in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our Bitcoin;\n\n•harm to our reputation and brand;\n\n•improper disclosure of data and violations of applicable data privacy and other laws; or\n\n•significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.\n\nFurther, any actual or perceived data security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital assets networks, regardless of whether we are directly impacted, could lead to a general loss of confidence in the broader Bitcoin blockchain ecosystem or in the use of the Bitcoin network to conduct financial transactions, which could negatively impact us.\n\nAttacks upon systems across a variety of industries, including industries related to Bitcoin, are increasing in frequency, persistence, and sophistication, and, in many cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques used to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable or degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or detected until after they have been launched against\n\n21\n\na target. These attacks may occur on our systems or those of our third-party service providers or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities. In particular, unauthorized parties have attempted, and we expect that they will continue to attempt, to gain access to our systems and facilities, as well as those of our partners and third-party service providers, through various means, such as hacking, social engineering, phishing and fraud. In the past, hackers have successfully employed a social engineering attack against one of our service providers and misappropriated our digital assets, although, to date, such events have not been material to our financial condition or operating results. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed. For example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched against a target and we may not be able to implement adequate preventative measures. Further, there has been an increase in such activities due to the increase in work-from-home arrangements since the onset of the COVID-19 pandemic. The risk of cyberattacks could also be increased by cyberwarfare in connection with geopolitical conflicts, such as the ongoing Russia-Ukraine conflict, or conflicts in the Middle East, including potential proliferation of malware into systems unrelated to such conflicts. Any future breach of our operations or those of others in the Bitcoin industry, including third-party services on which we rely, could materially and adversely affect our business.\n\nWe face risks relating to the use of third-party advisors connection with the execution of our Bitcoin strategy.\n\nWe use third-parties to provide advisory services related to the execution of our Bitcoin strategy. We pay or may pay fees and incentive fees to such third-parties, and may reimburse such third-parties for certain expenses they incur. The fees may be based on a percentage of our net assets and, consequently, such third-parties may have conflicts of interest in connection with decisions that could affect our net assets, such as decisions as to whether and when to make future investments. The departure or termination of, or any misconduct of the third-party advisors, or of a significant number of professionals who act as agents of, or provide support to, the third-party advisors, could have a material adverse effect on our business, financial condition or the results of our operations.\n\nWe face risks relating to the custody of our Bitcoin, including the loss or destruction of private keys required to access our Bitcoin and cyberattacks or other data loss relating to our Bitcoin.\n\nWe hold substantially all of our Bitcoin in custody accounts at a U.S.-based, institutional-grade custodian that has demonstrated records of regulatory compliance and information security, and as we further execute on our strategy, we may expand our holdings to multiple similar custodians. Our custodial services contract does, and any future contracts will, not restrict our ability to reallocate our Bitcoin among our custodians, and our Bitcoin holdings may be concentrated with a single custodian from time to time, such as presently as we negotiate new arrangements. In light of the significant amount of Bitcoin we will hold, we will continually seek to engage additional custodians to achieve a greater degree of diversification in the custody of our Bitcoin as the extent of potential risk of loss is dependent, in part, on the degree of diversification. If there is a decrease in the availability of digital assets custodians that we believe can safely custody our Bitcoin, for example, due to regulatory developments or enforcement actions that cause custodians to discontinue or limit their services in the United States, we may need to enter into agreements that are less favorable or take other measures to custody our Bitcoin, and our ability to seek a greater degree of diversification in the use of custodial services would be materially adversely affected.\n\nAny insurance that may cover losses of our Bitcoin holdings will cover only a small fraction of the value of the entirety of our Bitcoin holdings, and there can be no guarantee that such insurance will be maintained as part of the custodial services we have or that such coverage will cover losses with respect to our Bitcoin. Moreover, our use of custodians exposes us to the risk that the Bitcoin our custodians hold on our behalf could be subject to insolvency proceedings and we could be treated as a general unsecured creditor of the custodian, inhibiting our ability to exercise ownership rights with respect to such Bitcoin. Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance coverage we may maintain related to our Bitcoin.\n\nBitcoin is controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet in which the Bitcoin is held. While the Bitcoin blockchain ledger requires a public key relating to a digital wallet to be published when used in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the Bitcoin held in such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is accessible, neither we nor our custodians will be able to access the Bitcoin held in the related digital wallet. Furthermore, we cannot provide assurance that our digital wallets, nor the digital wallets of our custodians held on our behalf, will not be compromised as a result of a cyberattack. The Bitcoin and blockchain\n\n22\n\nledger, as well as other digital assets and blockchain technologies, have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities.\n\nRegulatory change reclassifying Bitcoin as a security could lead to our classification as an “investment company” under the Investment Company Act of 1940 and could adversely affect the market price of Bitcoin and the market price of our ADSs.\n\nUnder Sections 3(a)(1)(A) and (C) of the Investment Company Act of 1940 (the “Investment Company Act”), a company generally will be deemed to be an “investment company” for purposes of the Investment Company Act if (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis.\n\nA significant portion of our assets are concentrated in our Bitcoin holdings. While senior SEC officials have stated their view that Bitcoin is not a “security” for purposes of the federal securities laws, a contrary determination by the SEC could lead to our classification as an “investment company” under the Investment Company Act, which would subject us to significant additional regulatory controls that could have a material adverse effect on our ability to execute on our Bitcoin strategy, and our business and operations and may also require us to substantially change the manner in which we conduct our business.\n\nIn addition, if Bitcoin is determined to constitute a security for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a determination could adversely affect the market price of Bitcoin and in turn adversely affect the market price of our ADSs.\n\nOur Bitcoin strategy exposes us to risk of non-performance by counterparties.\n\nOur Bitcoin strategy exposes us to the risk of non-performance by counterparties, whether contractual or otherwise. Risk of non-performance includes inability or refusal of a counterparty to perform because of a deterioration in the counterparty’s financial condition and liquidity or for any other reason. For example, our execution partners, custodians, or other counterparties might fail to perform in accordance with the terms of our agreements with them, which could result in a loss of Bitcoin, a loss of the opportunity to generate funds, or other losses.\n\nOur primary counterparty risk with respect to our Bitcoin is custodian performance obligations under the various custody arrangements we have entered into. A series of recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital assets industry, including the filings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital, FTX Trading and Genesis Global Capital, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry, including Signature Bank and Silvergate Bank, SEC enforcement actions against Coinbase, Inc., Binance Holdings Ltd., and Kraken, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by Nevada’s Department of Business and Industry, and the filing and subsequent settlement of a civil fraud lawsuit by the New York Attorney General against Genesis Global Capital, its parent company Digital Currency Group, Inc., and former partner Gemini Trust Company have highlighted the perceived and actual counterparty risk applicable to digital assets ownership and trading. Although these bankruptcies, closures and liquidations have not resulted in any loss or misappropriation of our Bitcoin, nor have such events adversely impacted our access to our Bitcoin, legal precedent created in these bankruptcy and other proceedings may increase the risk of future rulings adverse to our interests in the event one or more of our custodians becomes a debtor in a bankruptcy case or is the subject of other liquidation, insolvency or similar proceedings.\n\nWhile all of our custodians are subject to regulatory regimes intended to protect customers in the event of a custodial bankruptcy, receivership or similar insolvency proceeding, no assurance can be provided that our custodially-held Bitcoin will not become part of the custodian’s insolvency estate if one or more of our custodians enters bankruptcy, receivership or similar insolvency proceedings. Additionally, if we pursue any strategies to create income streams or otherwise generate funds using our Bitcoin holdings, we would become subject to additional counterparty risks. Any significant non-performance by counterparties, including in particular the custodians with which we custody substantially all of our Bitcoin, could have a material adverse effect on our business, prospects, financial condition, and operating results.\n\nOur potential loss of foreign private issuer status will increase our regulatory and compliance costs.\n\nWe may lose foreign private issuer status as soon as the beginning of 2027 depending on whether the majority of our assets will be held in the United States. Following the loss of foreign private issuer status, we will no longer be eligible to use\n\n23\n\nthe rules designated for foreign private issuers and will be required to comply with the reporting regime that applies to US domestic public companies. The regulatory and compliance costs to us under US securities laws as a US domestic public company will potentially be greater than the costs incurred as a foreign private issuer. Among other consequences, once we are not a foreign private issuer, we will be required to file periodic and current reports and registration statements on US domestic public company forms with the SEC, which are generally more detailed and extensive than the forms available to a foreign private issuer and are generally required to be filed within shorter time periods. In addition, we will be required to comply with the proxy requirements applicable to US domestic public companies and will lose the ability to rely on exemptions from corporate governance requirements that are available to foreign private issuers.\n\nRisks Related to our Secured Convertible Debentures and Potential Future Indebtedness\n\nOur previously announced plan to redeem the balance of our Secured Convertible Debentures is dependent upon the value of our Bitcoin treasury.\n\nAs part of our Bitcoin treasury strategy, we issued $189 million aggregate principal amount of Secured Convertible Debentures in July 2025. In November 2025, we redeemed 50% of our outstanding Secured Convertible Debentures to enhance financial flexibility, reduce our Debt-to-NAV ratio and boost share buyback capacity. In February 2026, we announced the plan to redeem in full the remaining $94.5 million of outstanding Debentures at a cash price equal to one hundred percent of the principal amount being redeemed, plus any accrued and unpaid interest. Subject to certain restrictions set forth in the Debentures, the redemption will be funded by the sale of Bitcoin held in a securities account to secure the Debentures (the “Bitcoin Collateral Account”) in increments such that, on or before June 1, 2026, either the Debentures will be fully redeemed or all 1,617 Bitcoin in the Bitcoin Collateral Account will have been sold to fund the redemption of the applicable portion of the principal amount of outstanding Debentures. To the extent that any principal amount or any accrued and unpaid interest thereon remains outstanding (the “Outstanding Amount”) following the release of all 1,617 Bitcoin from the Bitcoin Collateral Account, such Outstanding Amount shall not be subject to repurchase by the Company at the option of any holder of the Debentures until January 7, 2027 at the earliest, except as otherwise set forth in the Debentures. If the value of the remaining Bitcoin declines, we may not be able to redeem the outstanding debentures in full, and we will continue to be subject to the risks set forth in this section.\n\nOur level and terms of indebtedness could adversely affect our ability to raise additional capital to fund our operations, and take advantage of new business opportunities.\n\nOur indebtedness, whether currently existing or incurred in the future, could have important consequences to us, including:\n\n•limiting our ability to use a substantial portion of our cash flow from operations in other areas of our business, including for working capital, developing our products and services, capital expenditures, and other general business activities and investment opportunities in our company, because we must dedicate a substantial portion of these funds to pay interest on and/or service our debt;\n\n•limiting our ability to obtain additional financing in the future for working capital, capital expenditures, debt service, acquisitions, execution of our strategy, and other expenses or investments planned by us;\n\n•limiting our flexibility and our ability to capitalize on business opportunities and to react to competitive pressures and adverse changes in government regulation, our business, and our industry;\n\n•increasing our vulnerability to a downturn in our business and to adverse economic and industry conditions generally;\n\n•requiring us to maintain Bitcoin or liquid assets to cover any repurchase, conversion or collateral requirement of the Secured Convertible Debentures;\n\n•placing us at a competitive disadvantage as compared to our competitors that are less leveraged; and\n\n24\n\n•limiting our ability, or increasing the costs, to refinance indebtedness.\n\nWe may be unable to service our indebtedness, which could cause us to default on our debt obligations and could force us into bankruptcy or liquidation.\n\nOur ability to make scheduled payments on and to refinance our indebtedness depends, and will depend, on and is subject to the value of our Bitcoin and our financial and operating performance, which is influenced, in part, by general economic, financial, competitive, legislative, regulatory, counterparty business, and other risks that are beyond our control, including the availability of financing in the U.S. banking and capital markets. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital, or restructure or refinance our indebtedness. We cannot assure you that future borrowings will be available to us in an amount sufficient to enable us to service our indebtedness, to refinance our indebtedness, or to fund our other liquidity needs. Even if refinancing indebtedness is available, any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations or our financial covenants, which could cause us to default on our debt obligations. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness.\n\nUpon the occurrence of an event of default under our indebtedness (whether currently existing or incurred in the future), the holders of the defaulted indebtedness could elect to declare all the funds borrowed to be due and payable, together with accrued and unpaid interest. Any of these events could in turn result in cross-defaults under any other indebtedness. We may not have sufficient funds available to pay the amounts due upon any such default, particularly in the event that there has been a decrease in the market value of our Bitcoin holdings, and we may not be able to raise additional funds to pay such amounts on a timely basis, on terms we find acceptable, or at all. Any financing that we may undertake under such circumstances could result in substantial dilution of our existing stockholders, and in the absence of being able to obtain such financing, we could be forced into bankruptcy or liquidation.\n\nWe may not have the ability to raise the funds necessary to repurchase the Secured Convertible Debentures for cash upon a fundamental change or other event which could necessitate repayment of the Secured Convertible Debentures, including the mandatory repayment of the Secured Convertible Debentures required at maturity, and any future debt may contain limitations on our ability to engage in repurchases of the Secured Convertible Debentures.\n\nUpon a Fundamental Change as defined in the Secured Convertible Debentures, all holders of the Secured Convertible Debentures will have the right, at each holder’s option, to require us to repurchase for cash all or any portion of such holder’s Secured Convertible Debenture at a repurchase price equal to the outstanding principal balance to be so repurchased, plus all accrued and unpaid interest thereunder as of the date of such repurchase, plus the Payment Premium as defined in the Secured Convertible Debentures, in respect of such principal balance and accrued and unpaid interest.\n\nIn order to obtain sufficient funds to pay the pay cash to repurchase the Secured Convertible Debentures or otherwise repay the Secured Convertible Debentures at maturity, we expect that we may have to refinance the Secured Convertible Debentures or obtain a waiver from the applicable holders of the Secured Convertible Debentures and we may not be able to refinance the Secured Convertible Debentures on reasonable terms, if at all. Absent a waiver from the applicable holders of the Secured Convertible Debentures, our failure to repurchase all validly tendered Secured Convertible Debentures or repay the Secured Convertible Debentures at maturity would be an event of default under the Secured Convertible Debentures. Additionally, the collateral held by the collateral agent under the Secured Convertible Debentures may not be available to us to repurchase or repay the Secured Convertible Debentures since that collateral is subject to release only in accordance with the terms of the Secured Convertible Debentures.\n\nMoreover, the exercise by holders of the Secured Convertible Debentures of their right to require us to repurchase such Secured Convertible Debentures could cause a default under future debt agreements, even if the change of control or fundamental change itself does not, due to the financial effect of such repurchase on us.\n\nAny future debt may contain limitations on our ability to (i) pay cash upon repurchase of the Secured Convertible Debentures or (ii) sell certain Bitcoin or other assets to generate cash that can be used to make such cash payments.\n\n25\n\nThe optional conversion feature of the Secured Convertible Debentures, if elected by the holders thereof, may adversely affect our financial condition.\n\nIn the event the optional conversion feature of the Secured Convertible Debentures is elected to be used by any holders, holders of the applicable Secured Convertible Debentures will be entitled to convert such Secured Convertible Debentures at any time during specified periods at their option. If one or more holders elect to convert their Secured Convertible Debentures, and we fail to satisfy our conversion obligation by delivering the applicable ordinary shares for the delivery of ADSs in the amount of time permitted by the Secured Convertible Debentures, we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. Furthermore, even if holders do not elect to convert their Secured Convertible Debentures, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the applicable Secured Convertible Debentures as a current rather than long-term liability, which would result in a material reduction of our net working capital.\n\nConversion of the Secured Convertible Debentures will dilute the ownership interest of existing shareholders or may otherwise depress the price of our ADSs and ordinary shares.\n\nThe conversion of some or all of the Secured Convertible Debentures may dilute the ownership interests of holders of our ADSs. Any sales in the public market of our ADSs deliverable upon conversion of the Secured Convertible Debentures could adversely affect prevailing market prices of our ADSs. In addition, the existence of the Secured Convertible Debentures may encourage short selling by market participants because the conversion of the Secured Convertible Debentures could be used to satisfy short positions, or anticipated conversion of the Secured Convertible Debentures into our ADSs could depress the price of our ADSs.\n\nFair value accounting for embedded derivatives in our debt instruments could generate significant earnings volatility and adversely affect investor perception, our stock price, and compliance with financial covenants.\n\nCertain features of our debt instruments, including early redemption options and potential price re-set mechanisms, result in the presence of an embedded derivative that must be accounted for separately under IFRS.\n\nThe embedded derivative is required to be measured at fair value through profit or loss, with remeasurement occurring at each reporting date. This accounting treatment may introduce significant volatility into our reported financial results, as changes in the fair value of the embedded derivative—driven by market interest rates, credit spreads, or other valuation inputs—are recognized in earnings, regardless of whether the underlying debt instrument is repaid or modified.\n\nThis volatility may not reflect the actual performance of our core operations and could adversely affect investor perception, our stock price, and our ability to comply with financial covenants. Additionally, the complexity of accounting for embedded derivatives may increase the risk of financial reporting errors or restatements, and may require significant management judgment and estimation.\n\nInvestors should be aware that these fair value adjustments are non-cash in nature, but may materially impact our financial statements and key performance indicators in any given reporting period.\n\nRisks Related to Intellectual Property Rights\n\nOur business substantially depends on intellectual property licensed from Qualcomm, and we may be unable to successful grow our business due to the covenants under the Qualcomm asset purchase agreement and license agreement.\n\nOn September 30, 2024, Qualcomm Technologies, Inc. (“Qualcomm”), a subsidiary of Qualcomm Incorporated, acquired the majority of our 4G IoT technologies. In connection with the sale of 4G intellectual property assets to Qualcomm, we received a license giving us the right to sell, support, maintain and enhance our existing 4G product portfolio and develop new generations of chips and modules using such technologies. This license enables us to continue developing and selling our Monarch (LTE-M/NB-IoT) and Calliope (LTE Cat-1/Cat-1bis chips. The license is royalty-free for current products and minor derivatives and royalty bearing through September 2029 for major derivatives, assuming annual revenues reach a certain minimum level. This license may be terminated by Qualcomm in the case of specified material breaches or other events. If this license is terminated, our business and financial condition could be materially harmed. In addition, the asset purchase\n\n26\n\nagreement contains certain post-closing covenants that restrict our business for certain periods, which could limit our business operations or ability to enter into certain strategic agreements.\n\nWe or our customers may be required to obtain licenses for certain so-called “standard essential patents” in order to comply with applicable standards, which could require us to pay additional royalties on certain of our products. If we or our customers are unable to obtain such licenses, our business, results of operations, financial condition and prospects would be harmed.\n\nWe or our customers may be required to obtain licenses for third-party intellectual property. In particular, we may be required to obtain licenses to certain third-party patents, so-called “standard essential patents,” that claim features or functions that are incorporated into applicable industry standards and that we are required to provide in order to comply with the standard. If we need to license any third-party intellectual property, standard essential patents or other technology, we could be required to pay royalties on certain of our products. In addition, while the industry standards bodies and antitrust laws in certain countries may require participating companies to license their standard essential patents on fair, reasonable, and nondiscriminatory terms, there can be no assurances that we will be able to obtain such licenses on commercially reasonable terms or at all. Although we have implemented a dedicated standard essential patents licensing-in reference policy, our inability to obtain required third-party intellectual property licenses on commercially reasonable terms or at all could harm our business, results of operations, financial condition or prospects. If our customers are required to obtain such licenses, there can be no assurances that their businesses will not be adversely affected. In addition, if our competitors have significant numbers of essential patents and/or patent license rights, they could be at an advantage in negotiating with our customers or potential customers, which could influence our ability to win new business or could result in downward pressure on our average selling prices.\n\nThough we rely to a significant extent on proprietary intellectual property, we may not be able to obtain, or may choose not to obtain, sufficient intellectual property rights to provide us with meaningful protection or commercial advantage.\n\nWe depend significantly on intellectual property rights to protect our products and proprietary technologies against misappropriation by others. We generally rely on the patent, trademark, copyright and trade secret laws in Europe, the United States and certain other countries in which we operate or in which our products are produced or sold, as well as licenses and nondisclosure and confidentiality agreements, to protect our intellectual property rights.\n\nWe may have difficulty obtaining patents and other intellectual property rights, and the patents and other intellectual property rights we have and obtain may be insufficient to provide us with meaningful protection or commercial advantage. We currently do not apply for patent protection in all the countries in which we operate. Instead, we select and focus on key countries for each patent family. In addition, the protection offered by patents and other intellectual property rights may be inadequate or weakened for reasons or circumstances that are out of our control. For instance, we may not be able to obtain patent protection or secure other intellectual property rights in all the countries in which we have filed patent applications or in which we operate, and under the laws of such countries, patents and other intellectual property rights may be or become unavailable or limited in scope.\n\nWe may not be able to adequately protect or enforce our intellectual property against improper use by our competitors or others and our efforts to do so may be costly to us, which may harm our business, financial condition and results of operations.\n\nOur patents and patent applications, or those of our licensors, could face challenges, such as interference proceedings, opposition proceedings, nullification proceedings and re-examination proceedings. Any such challenge, if successful, could result in the invalidation or narrowing of the scope of any such patents and patent applications. Any such challenges, regardless of their success, would also likely be time-consuming and expensive to defend and resolve, and would divert management time and attention. Further, our unpatented proprietary processes, software, designs and trade secrets may be vulnerable to disclosure or misappropriation by employees, contractors and other persons. While we generally enter into confidentiality agreements with such persons to protect our intellectual property, we cannot assure you that our confidentiality agreements will not be breached, that they will provide meaningful protection for our proprietary technology and trade secrets, or that adequate remedies will be available in the event they are used or disclosed without our authorization. Also, intellectual property rights are difficult to enforce in the People’s Republic of China, or PRC, and certain other countries, particularly in Asia, where the application and enforcement of the laws governing such rights may not have reached the same level as compared to other jurisdictions where we operate, such as Europe and the United States. Consequently, because we operate in these countries and all of our manufacturing, testing and assembly takes place in PRC, Taiwan, and Vietnam, we may be subject to an increased risk that unauthorized parties may attempt to copy or otherwise use our intellectual property or the intellectual property of our suppliers or other parties with whom we engage or have licenses.\n\n27\n\nThere can be no assurance that we will be able to protect our intellectual property rights, that our intellectual property rights will not be challenged, invalidated, circumvented or rendered unenforceable, or that we will have adequate legal recourse in the event that we seek legal or judicial enforcement of our intellectual property rights. Any inability on our part to adequately protect or enforce our intellectual property may harm our business, financial condition and results of operations. We may in the future initiate claims or litigation against third parties for infringement of our intellectual property rights to protect these rights, or to determine the scope and validity of our proprietary rights or the proprietary rights of competitors. These claims could result in costly litigation and the diversion of our technical and management personnel, and we may not prevail in making these claims.\n\nAssertions by third parties of infringement by us or our customers of their intellectual property rights could result in significant costs and cause our operating results to suffer.\n\nThe markets in which we compete are characterized by rapidly changing products and technologies, and there is intense competition to establish intellectual property protection and proprietary rights to these new products and the related technologies. The semiconductor and wireless communications industries, in particular, are characterized by vigorous protection and pursuit of intellectual property rights and positions, which has resulted in protracted and expensive litigation for many companies.\n\nWe may be unaware of the intellectual property rights of others that may cover some of our technology, products and services. In addition, third parties may claim that we or our customers are infringing or contributing to the infringement of their intellectual property rights.\n\nWe have in the past received, and as a public company operating in a highly competitive marketplace, we expect that in the future we will receive, communications and offers from various industry participants and others alleging that we have infringed or have misappropriated their patents, trade secrets or other intellectual property rights and/or inviting us to license their technology and intellectual property. For example, in August 2022, we were sued in three lawsuits by Bell Semiconductor, LLC, accusing us of infringing certain U.S. patents that we license from another party. The case was settled in 2023, and in this instance, all costs were covered under our indemnification rights from the licensor. However, that may not be the case in future instances. Any lawsuits resulting from such allegations of infringement or invitations to license, including suits challenging 4G or 5G standards, could subject us to significant liability for damages and/or challenge our activities. Any potential intellectual property litigation also could force us to do one or more of the following:\n\n•stop selling products or using technology that contain the allegedly infringing intellectual property;\n\n•abandon the opportunity to license our technology to others or to collect royalty payments;\n\n•incur significant legal expenses;\n\n•pay substantial damages to the party whose intellectual property rights we may be found to be infringing;\n\n•redesign those products that contain the allegedly infringing intellectual property; or\n\n•attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all.\n\nOur customers could also become the target of litigation relating to the patents and other intellectual property rights of others. This could, in turn, trigger an obligation for us to provide technical support and/or indemnify such customers. These obligations could result in substantial expenses, including the payment by us of costs and damages relating to claims of intellectual property infringement. In addition to the time and expense required for us to provide support or indemnification to our customers, any such litigation could disrupt the businesses of our customers, which in turn could hurt our relationships with our customers and cause the sale of our products to decrease. We cannot assure you that claims for indemnification will not be made or that if made, such claims would not materially harm our business, operating results or financial conditions.\n\nAny potential dispute involving our patents or other intellectual property could also include our industry partners and customers, which could trigger our indemnification obligations to them and result in substantial expense to us.\n\nIn any potential dispute involving our patents or other intellectual property, our licensees could also become the target of litigation, and certain customers have received notices of written offers from our competitors and others claiming to have patent rights in certain technology and inviting our customers to license this technology. Because we indemnify our licensees and customers for intellectual property claims made against them for products incorporating our technology, any litigation could trigger technical support and indemnification obligations in some of our license agreements, which could result in substantial payments and expenses by us. In addition to the time and expense required for us to supply support or indemnification to our licensees and customers, any such litigation could severely disrupt or shut down the business of our customers, which in turn could hurt our relations with our customers and cause the sale of our proprietary technologies and products to decrease.\n\n28\n\nOur failure to comply with obligations under open source licenses could require us to release our source code to the public or cease distribution of our products, which could harm our business, financial condition and results of operations.\n\nSome of the software used with our products, as well as that of some of our customers, may be derived from so-called “open source” software that is generally made available to the public by its authors and/or other third parties. Such open source software is often made available to us under licenses, such as the GNU General Public License, which impose certain obligations on us in the event we were to make available derivative works of the open source software. These obligations may require us to make source code for the derivative works available to the public, and/or license such derivative works under a particular type of license, rather than the licenses we customarily use to protect our intellectual property. In addition, there is little or no legal precedent for interpreting the terms of certain of these open source licenses, including the determination of which works are subject to the terms of such licenses. While we believe we have complied with our obligations under the various applicable licenses for open source software, in the event the copyright holder of any open source software were to successfully establish in court that we had not complied with the terms of a license for a particular work, we could be required to release the source code of that work to the public and/or stop distribution of that work.\n\nRisks Related to Material Weaknesses in Our Internal Control Over Financial Reporting\n\nWe identified material weaknesses in our internal control over financial reporting during 2024 and 2025 and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements or otherwise adversely affect the accuracy, reliability or timeliness of our financial statements.\n\nPursuant to the Sarbanes-Oxley Act of 2002, we are required to document and test our internal control procedures and to provide a report by management on internal control over financial reporting, including management’s assessment of the effectiveness of such control.\n\nAs previously reported for the year ended December 31, 2024, our management identified material weaknesses in our internal control over financial reporting. The material weaknesses and other deficiencies were evaluated as of December 31, 2025 and management continued to identify material weaknesses. As of December 31, 2025, these material weaknesses relate to: (i) lack of accounting and supervisory personnel with the appropriate level of technical accounting experience and training in the application of International Financial Reporting Standards (IFRS) in relation to complex accounting transactions, particularly in areas such as revenue recognition, accounting for convertible debt and related warrants, business combinations and intangible assets, accounting for digital assets, and related impairments, (ii) lack of a comprehensive risk-based control assessment and sufficiently designed procedures and controls to establish an effective internal control framework over financial reporting, to ensure that routine transactions and material accounting matters are identified, evaluated, documented, reviewed and recorded on a timely basis to address the accounting and presentation requirements of International Financial Reporting Standards (IFRS), and (iii) lack of designed and implemented internal controls for both segregation of duties and safeguarding over misappropriation of digital assets.\n\nAs part of our plan for remediation for the recurring material weaknesses, our management is evaluating and enhancing our internal control framework, including the use of external experts. In addition, in order to reinforce our finance team, we are contemplating additional training and evaluating hiring needs to ensure appropriate design, oversight and timely execution of control activities. Management has identified actions intended to address the material weakness related to digital assets, including strengthening risk assessment and documentation related to digital asset custody, implementing and documenting relevant complementary user entity controls, and enhancing monitoring over access to custodial accounts.\n\nAlthough we are working to remediate the material weaknesses, there can be no assurance as to when the remediation will be completed, and we can give no assurances that other material weaknesses will not arise in the future. Failure to comply with Section 404 of the Sarbanes-Oxley Act could also potentially subject us to sanctions or investigations by the SEC or other regulatory authorities. Deficiencies, including any material weakness, in our internal control over financial reporting that have not been remediated or that may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, suspension or delisting of our ADSs from the New York Stock Exchange, or otherwise materially adversely affect our business, reputation, results of operations and financial condition.\n\nRisks Related to Ownership of Our Shares and ADSs\n\nOur failure to maintain compliance with the Continued Listing Criteria of the New York Stock Exchange (NYSE) may result in the delisting of our ADSs.\n\n29\n\nOn April 9, 2024, the New York Stock Exchange (the “NYSE”) notified us that we were no longer in compliance with the minimum market capitalization and minimum share price requirements of the NYSE Listed Company Manual because (i) we had an average global market capitalization over a consecutive 30 trading-day period below $50,000,000 and, at the same time, stockholders’ equity was less than $50,000,000, and (ii) because the average closing price of the Company’s ADSs was less than $1.00 over a consecutive 30 trading-day period. We regained compliance with all listing standards on April 2, 2025.\n\nOn June 5, 2025, the NYSE notified us that we had again become noncompliant with the minimum market capitalization requirements. The NYSE notified us that we had regained compliance with all listing standards on January 14, 2026, but there is no assurance that we will continue to meet the NYSE listing standards.\n\nIf our ADSs are delisted and we are not able to list our ADSs on another national securities exchange, we expect our securities would be quoted on an over-the-counter market. If this were to occur, our stockholders could face significant material adverse consequences, including limited availability of market quotations for our ADSs and reduced liquidity for the trading of our securities. In addition, we could experience a decreased ability to issue additional securities and obtain additional financing in the future. There can be no assurance that an active trading market for our ADSs will develop or be sustained\n\nFluctuations in our operating results on a quarterly or annual basis and difficulty predicting our quarterly operating results could cause the market price of the ADSs to decline.\n\nOur revenue and operating results have fluctuated significantly from period to period in the past and will do so in the future. As a result, you should not rely on period-to-period comparisons of our operating results as an indication of our future performance. In future periods, our revenue and results of operations may be below the expectations of analysts and investors, which could cause the market price of the ADSs to decline.\n\nFactors that may cause our operating results to fluctuate include but are not limited to:\n\n•the impact of recent U.S. tariffs on our ability to sell our products in the United States;\n\n•the value of our Bitcoin treasury;\n\n•reductions in orders or cancellations by our customers;\n\n•changes in customer mix, the mix of products and services sold and the mix of geographies in which our products and services are sold;\n\n•reduced visibility into our customers’ spending plans and associated revenue;\n\n•current and potential customer, partner and supplier consolidation and concentration;\n\n•changes in the size, growth or growth prospects of the LTE, 5G and IoT markets;\n\n•changes in the competitive dynamics of our market, including new entrants or pricing pressures, and our ability to compete in the LTE, 5G and IoT markets;\n\n•timing and success of commercial deployments of and upgrades to 4G wireless networks and the next generation 5G wireless networks;\n\n•timely availability, at a reasonable cost, of adequate manufacturing capacity with the sole foundry that manufactures our products;\n\n•our ability to successfully define, design and release new products in a timely manner that meet our customers’ needs;\n\n•timing and growth rate of revenues from the LTE, 5G and IoT markets;\n\n•changes in manufacturing costs, including wafer, test and assembly costs, mask costs and manufacturing yields;\n\n•the timing of product announcements by competitors or us;\n\n•costs associated with litigation, especially related to intellectual property and securities class actions;\n\n•costs associated with any violation of the U.S. Foreign Corrupt Practices Act, the United Kingdom Bribery Act, or other similar foreign laws;\n\n•the effects of a widespread outbreak of contagious disease;\n\n•changing economic and political conditions at a global or local level;\n\n•the impact of rising inflation and interest rates on consumer demand for electronic products;\n\n•how well we execute on our strategy and operating plans and the impact of changes in our business model that could result in significant restructuring changes; and\n\n•our ability to achieve targeted cost reductions.\n\nMoreover, sales of our semiconductor solutions fluctuate from period to period due to cyclicality in the semiconductor industry and the short product life cycles and wide fluctuations in product supply and demand characteristic of this industry. We expect these cyclical conditions to continue. Business activities in Asia generally slowdown in the first quarter of each year\n\n30\n\nduring the lunar new year period, which could harm our sales and results of operations during the period. Our expense levels are relatively fixed in the short-term and are based, in part, on our future revenue projections. If revenue levels are below our expectations, we may experience declines in margins and profitability or incur a loss from our operations. As a result, our quarterly operating results are difficult to predict, even in the near term, which may result in our revenue and results of operations being below the expectations of analysts and investors, and which could cause the market price of the ADSs to decline.\n\nIf securities or industry analysts cease to publish research reports about us or our industry, or if they adversely change their recommendations regarding the ADSs, the market price for the ADSs and trading volume could decline.\n\nThe trading market for the ADSs is influenced by research reports that industry or securities analysts publish about us or our industry. If one or more analysts who cover us downgrade the ADSs, the market price for the ADSs would likely decline. If one or more of these analysts ceases coverage of us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for the ADSs to decline.\n\nIf we raise additional capital in the future, your ownership in us could be diluted.\n\nAny issuance of equity we may undertake in the future to raise additional capital could cause the price of the ADSs to decline, or require us to issue shares or ADSs at a price that is lower than that paid by holders of our shares or ADSs in the past, which would result in those newly issued shares or ADSs being dilutive. If we obtain funds through a credit facility or through the issuance of debt or preferred securities, these securities would likely have rights that are senior to your rights as an ADS holder, which could impair the value of the ADSs.\n\nWe have no present intention to pay dividends on our ordinary shares in the foreseeable future and, consequently, your only opportunity to achieve a return on your investment during that time is if the price of the ADSs appreciates.\n\nWe have no present intention to pay dividends on our ordinary shares in the foreseeable future. Any recommendation by our board of directors to pay dividends will depend on many factors, including our financial condition, results of operations, legal requirements and other factors. Accordingly, if the price of the ADSs falls in the foreseeable future, you will incur a loss on your investment, without the likelihood that this loss will be offset in part or at all by potential future cash dividends. In addition, even if we were to pay a dividend on our ordinary shares, French law may prohibit paying such dividends to holders of the ADSs or the tax implications of such payments may significantly diminish what you receive.\n\nYou may not be able to exercise your right to vote the ordinary shares underlying your ADSs.\n\nHolders of ADSs may exercise voting rights with respect to the ordinary shares represented by the ADSs only in accordance with the provisions of the deposit agreement. The deposit agreement provides that, upon receipt of notice of any meeting of holders of our ordinary shares, the depositary will, as soon as practicable thereafter, fix a record date for the determination of ADS holders who shall be entitled to give instructions for the exercise of voting rights. Upon timely receipt of notice from us, if we so request, the depositary shall distribute to the holders as of the record date (i) the notice of the meeting or solicitation of consent or proxy sent by us and (ii) a statement as to the manner in which instructions may be given by the holders, including an express indication that instructions may be given or deemed given if no instruction is received, to the depositary to give a discretionary proxy to a person designated by the Company.\n\nYou may instruct the depositary of your ADSs to vote the ordinary shares underlying your ADSs. Otherwise, you will not be able to exercise your right to vote, unless you withdraw the ordinary shares underlying the ADSs you hold. However, you may not know about the meeting far enough in advance to withdraw those ordinary shares. If we ask for your instructions, the depositary, upon timely notice from us, will notify you of the upcoming vote and arrange to deliver our voting materials to you. We cannot guarantee you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote your ordinary shares or to withdraw your ordinary share so that you can vote them yourself. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions, or for the manner of carrying out voting instructions. This means that you may not be able to exercise your right to vote, and there may be nothing you can do if the ordinary shares underlying your ADSs are not voted as you requested.\n\nIn addition, if the depositary does not receive instructions from an owner of the ADS with respect to a matter and an amount of ADSs of that owner on or before the instruction cutoff date, the depositary may deem the owner to have instructed the depositary to give a discretionary proxy to a person designated by the Company with respect to that matter and the amount\n\n31\n\nof deposited ordinary shares represented by the ADSs. As a result, your failure to respond could result in the depositary voting for a matter that you might oppose.\n\nAs a foreign private issuer, we are exempt from a number of rules under the U.S. securities laws and are permitted to file less information with the SEC than a U.S. company, our ordinary shares are not listed, and we do not intend to list our shares, on any market in France, our home country. This may limit the information available to holders of the ADSs.\n\nWe are a “foreign private issuer”, as defined in the SEC’s rules and regulations and, consequently, we are not subject to all of the disclosure requirements applicable to public companies organized within the United States. For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act, including the U.S. proxy rules under Section 14 of the Exchange Act. In addition, while our officers and directors are subject to the reporting requirements of Section 16 of the Exchange Act and related rules, they are exempt from the “short-swing” profit recovery provisions with respect to their purchases and sales of our securities. Moreover, while we have and expect to continue to submit quarterly interim consolidated financial data to the SEC under cover of the SEC’s Form 6-K, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies, and are not required to file quarterly reports on Form 10-Q or current reports on Form 8-K under the Exchange Act. Furthermore, our ordinary shares are not listed, and we do not currently intend to list our ordinary shares on any market in France, our home country. As a result, we are not subject to the reporting and other requirements of listed companies in France. For instance, we are not required to publish quarterly or semi-annual financial statements. Accordingly, there is less publicly available information concerning our company than there would be if we were a U.S.-based public company.\n\nAs a foreign private issuer, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from NYSE corporate governance listing standards. These practices may afford less protection to shareholders than they would enjoy if we complied fully with NYSE corporate governance listing standards.\n\nAs a foreign private issuer listed on the NYSE, we are subject to NYSE corporate governance listing standards. However, NYSE rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in France, which is our home country, may differ significantly from NYSE corporate governance listing standards. For example, neither the corporate laws of France nor our by-laws require a majority of our directors to be independent, and we could include non-independent directors as members of our compensation committee and nominating committee, and our independent directors would not necessarily hold regularly scheduled meetings at which only independent directors are present. Currently, we intend to comply with the NYSE corporate governance listing standards to the extent possible under French law. However, if we choose to change such practice to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise would under NYSE corporate governance listing standards applicable to U.S. domestic issuers.\n\nWe believe we were classified as a passive foreign investment company in 2025, and we may be a PFIC in the current or future taxable years, which could result in adverse U.S. federal income tax consequences to U.S. holders of our ADSs.\n\nA non-U.S. corporation will be classified as a “passive foreign investment company,” or a PFIC, for U.S. federal income tax purposes for any taxable year in which, after applying certain look-through rules, either (i) at least 75% of its gross income is “passive income” or (ii) at least 50% of the average value of its gross assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income generally includes dividends, interest, royalties, rents, gains from commodities and securities transactions and gains from the disposition of assets that produce passive income.\n\nBased on our business, assets, and activities, including the ownership (directly or indirectly) of Bitcoin, we believe we were a PFIC for the taxable year ended December 31, 2025. Additionally, we may be classified as a PFIC for the taxable year ending December 31, 2026, and subsequent taxable years.\n\nIf we are classified as a PFIC for any taxable year during which a U.S. holder holds the ADSs, unless such holder makes certain elections, a special tax regime will apply to such holder and such holder may be subject to significantly adverse U.S. federal income tax consequences, including (among other things) the treatment of any gain on the disposition of the ADSs and certain distributions as ordinary income (rather than capital gain), the imposition of an interest charge on certain taxes treated as deferred under the PFIC rules, the loss of the preferential rates of taxation on “qualified dividend income,” and additional U.S. federal income tax reporting obligations. We do not expect to provide to U.S. holders, the information needed to report income and gain pursuant to a “qualified electing fund” election, which election would alleviate some of the adverse tax consequences\n\n32\n\nof PFIC status, and we make no undertaking to provide such information in the event that we are a PFIC. See “Item 10.E—Taxation—Material United States Federal Income Tax Consequences—Passive Foreign Investment Company Considerations.”\n\nWe have been and in the future may be subject to legal actions that could distract our management and increase costs, which may adversely affect our financial condition or our reputation.\n\nWe have been subject to securities class action lawsuits alleging violations of the U.S. federal securities laws by us and certain of our officers. The costs of the ultimate resolution of these lawsuits did not exceed our insurance coverage after our deductible. However, the premium for our directors and officers insurance increased significantly with a higher retention and reduced coverage. An unfavorable outcome in any future lawsuit or proceeding could have an adverse impact on our business, financial condition and results of operations. Further, if our stock price is volatile, we may become involved in further litigation. Any current or future litigation, regardless of its merits, could result in substantial costs and a diversion of our management’s attention and resources that are needed to successfully run our business.\n\nYou may be unable to recover in civil proceedings for U.S. securities laws violations.\n\nWe are a corporation organized under the laws of France. The majority of our directors are citizens and residents of countries other than the United States, and the majority of our assets are located outside of the United States. Accordingly, it may be difficult for investors to obtain jurisdiction over us or our directors in courts in the United States and enforce against us or them judgments obtained against us or them. In addition, we cannot assure you that civil liabilities predicated upon the federal securities laws of the United States will be enforceable in France.\n\nHolders of our ADSs may not be entitled to a jury trial with respect to claims arising under the deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any such action.\n\nThe deposit agreement governing the ADSs representing our ordinary shares provides that, to the fullest extent permitted by law, ADS holders waive the right to a jury trial of any claim they may have against us or the depositary arising out of or relating to our shares, the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.\n\nIf we or the depositary opposed a jury trial demand based on the waiver, the court would determine whether the waiver was enforceable based on the facts and circumstances of that case in accordance with the applicable state and federal law. To our knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the federal securities laws has not been finally adjudicated by the United States Supreme Court. However, we believe that a contractual pre-dispute jury trial waiver provision is generally enforceable, including under the laws of the State of New York, which govern the deposit agreement, by a federal or state court in the City of New York, which has non-exclusive jurisdiction over matters arising under the deposit agreement. In determining whether to enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We believe that this is the case with respect to the deposit agreement and the ADSs. It is advisable that you consult legal counsel regarding the jury waiver provision before entering into the deposit agreement.\n\nIf you or any other holders or beneficial owners of ADSs bring a claim against us or the depositary in connection with matters arising under the deposit agreement or the ADSs, including claims under federal securities laws, you or such other holder or beneficial owner may not be entitled to a jury trial with respect to such claims, which may have the effect of limiting and discouraging lawsuits against us and / or the depositary. If a lawsuit is brought against us and/or the depositary under the deposit agreement, it may be heard only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have had, including results that could be less favorable to the plaintiff(s) in any such action. Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an action could proceed under the terms of the deposit agreement with a jury trial. No condition or provision of the deposit agreement or ADSs serves as a waiver by any holder or beneficial owner of ADSs or by us or the depositary of compliance with any substantive provision of the U.S. federal securities laws and the rules and regulations promulgated thereunder.\n\nThe rights of shareholders in companies subject to French corporate law differ in material respects from the rights of shareholders of corporations incorporated in the United States.\n\nWe are a French company with limited liability. Our corporate affairs are governed by our by-laws and by the laws governing companies incorporated in France. The rights of shareholders and the responsibilities of members of our board of directors are in many ways different from the rights and obligations of shareholders in companies governed by the laws of U.S.\n\n33\n\njurisdictions. For example, in the performance of its duties, our board of directors is required by French law to consider the interests of our company, its shareholders, its employees and other stakeholders, rather than solely our shareholders and/or creditors. It is possible that some of these parties will have interests that are different from, or in addition to, your interests as a shareholder.\n\nOur by-laws and French corporate law contain provisions that may delay or discourage a takeover attempt.\n\nProvisions contained in our by-laws and the corporate laws of France, the country in which we are incorporated, could make it more difficult for a third party to acquire us, even if doing so might be beneficial to our shareholders. In addition, provisions of our by-laws impose various procedural and other requirements, which could make it more difficult for shareholders to effect certain corporate actions. These provisions include the following:\n\n•our shares are in registered form only, and we must be notified of any transfer of our shares in order for such transfer to be validly registered;\n\n•our by-laws provide for directors to be elected for three-year terms, and we intend to elect one third of the directors every year;\n\n•since our ordinary shares are not listed in France, an acquiror cannot conduct a merger to squeeze out any minority shareholders;\n\n•our shareholders may grant our board of directors, broad authorizations to increase our share capital;\n\n•our board of directors has the right to appoint directors to fill a vacancy created by the resignation, death or removal of a director, subject to the approval by the shareholders of such appointment at the next shareholders’ meeting, which prevents shareholders from having the sole right to fill vacancies on our board of directors;\n\n•our board of directors can only be convened by its chairman except when no board meeting has been held for more than two consecutive months;\n\n•our board of directors' meetings can only be regularly held if at least half of the directors attend either physically or by way of secured telecommunications;\n\n•approval of at least a majority of the shares entitled to vote at an ordinary shareholders’ general meeting is required to remove directors with or without cause;\n\n•advance notice is required for nominations for election to the board of directors or for proposing matters that can be acted upon at a shareholders’ meeting; and\n\n•the sections of the by-laws relating to the number of directors and election and removal of a director from office may only be modified by a resolution adopted by 66 2/3% of our shareholders present or represented at the meeting.\n\nThe exercise or conversion of outstanding convertible notes, restricted shares, and warrants into ordinary shares will dilute the percentage ownership of our other shareholders and the sale of such shares may adversely affect the market price of the ADSs.\n\nAs of April 23, 2026, there were outstanding convertible notes, warrants (including warrants issued to financial and strategic investors), and unvested restricted shares representing an aggregate of 270.7 million of our ordinary shares (representing 2.7 million ADSs), and more restricted shares and warrants will likely be granted in the future to our officers, directors and employees. We may issue additional warrants or convertible notes in connection with acquisitions, borrowing arrangement or other strategic or financial transactions. The exercise of outstanding warrants, and the vesting of restricted shares, will dilute the percentage ownership of our other shareholders. The exercise of these options and warrants and the vesting of restricted shares, with the subsequent sale of the underlying ordinary shares, could cause a decline in the market price of the ADSs.\n\nGeneral Risks\n\nThe loss of any of our key personnel could seriously harm our business, and our failure to attract or retain specialized technical, management or sales and marketing employees could impair our ability to grow our business.\n\nWe believe our future success will depend in large part upon our ability to attract, retain and motivate highly skilled management, engineering and sales and marketing personnel. The loss of any key employees or the inability to attract, retain or motivate qualified personnel, including engineers and sales and marketing personnel, could delay the development and introduction of and harm our ability to sell our semiconductor solutions. We believe that our future success is dependent on the contributions of Georges Karam, our co-founder and chief executive officer. The loss of the services of Dr. Karam, other executive officers or certain other key personnel could materially harm our business, financial condition and results of\n\n34\n\noperations. For example, if any of these individuals were to leave unexpectedly, we could face substantial difficulty in hiring qualified successors, and could experience a loss in productivity during the search for any such successor and while any successor is integrated into our business and operations.\n\nWe may not be successful in attracting, retaining and motivating sufficient technical and engineering personnel to support our anticipated growth. In addition, to expand our customer base and increase sales to existing customers, we will need to hire additional qualified sales personnel. The competition for qualified marketing, sales, technical and engineering personnel in our industry is very intense. If we are unable to hire, train and retain qualified marketing, sales, technical and engineering personnel in a timely manner, our ability to grow our business will be impaired. In addition, if we are unable to retain our existing sales personnel, our ability to maintain or grow our current level of revenue will be harmed.\n\nAdverse outcomes in tax disputes could subject us to tax assessments and potential penalties.\n\nFrom time to time, we are subject to tax audits that could result in tax assessments and potential penalties, particularly with respect to claimed research tax credits due to the judgment involved in determining which projects meet the tax code’s criteria for innovation and fundamental research. For example, in January 2022, we received notification from the French tax authorities that our tax declarations for the years ended December 31, 2019 and 2020 would be reviewed. In December 2022, we received notification of an adjustment related to employment taxes on employees in foreign offices totaling €80,000 ($82,000) for the year ended December 31, 2019. After we contested the finding, the adjustment was reduced to €38,000 ($39,000), which we recorded as an expense in 2022. In December 2023, the tax audit was finalized and did not result in any further tax expense. Our actual costs for any disputes in the future may be materially different from the provisions recorded if we are not successful in our appeal of any assessment, which could have a material adverse effect on our business.\n\nIn the year ended December 31, 2024, we realized a taxable profit in France due to the gain recognized on the sale of certain 4G assets to Qualcomm. Under French tax regulations, we may opt to apply a special lower-tax regime to sales or licenses of qualifying intellectual property, commonly referred to as \"IP Box\". Taxable income from such qualifying transaction is taxed at a rate of 10%. We opted to apply the IP Box regime to the taxable income arising from the sale of the Monarch 2 eligible intellectual property, which is the trademarkable software element. Our use of the IP Box regime for this transaction was submitted for review by the French tax administration and a favorable ruling received, but the tax declaration is still subject to audit. In the event of disqualification of the IP Box option, all our French taxable income would be taxed at 25%, resulting in an increase of taxes due of $4,280,000.\n\nOur business and operations could suffer in the event of security breaches.\n\nAttempts by others to gain unauthorized access to our information technology systems are becoming more sophisticated. These attempts, which might be related to industrial or other espionage, include covertly introducing malware to our computers and networks and impersonating authorized users, among others. Hackers may also develop and deploy viruses, worms and other malicious software programs that attack or otherwise exploit security vulnerabilities in our systems or products. Attacks may create system disruptions, cause shutdowns or result in the corruption of our engineering data, which could result in delays in product development or software updates and harm our business. Additionally, the theft, unauthorized use or publication of our intellectual property and/or confidential business information could harm our competitive position, reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. To the extent that any security breach results in inappropriate disclosure of our customers’ or business partners’ confidential information, we may incur liability as a result. We could also suffer monetary and other losses, including reputational harm, which costs we may not be able to recover. We seek to detect and investigate all security incidents and to prevent their recurrence, but in some cases, we might be unaware of an incident or its magnitude and effects. While we have identified some incidents involving attempts at unauthorized access, we are not aware of any that have succeeded. We expect to continue to devote resources to the security of our information technology systems.\n\nChanges in International Financial Reporting Standards (“IFRS”) could adversely affect our financial results and may require significant changes to our internal accounting systems and processes.\n\nWe prepare our consolidated financial statements in conformity with IFRS. These principles are subject to interpretation by the International Accounting Standard Board and various bodies formed to interpret and create appropriate accounting principles and guidance. The IFRS periodically issues new accounting standards on a variety of topics. For information regarding new accounting standards, please refer to Note 2.2 of Notes to Consolidated Financial Statements under the heading “Changes in accounting policy and disclosures.” These and other such standards generally result in different accounting principles, which may significantly impact our reported results or could result in variability of our financial results.\n\n35\n\nIn preparing our financial statements we make certain assumptions, judgments and estimates that affect amounts reported in our consolidated financial statements, which, if not accurate, may significantly impact our financial results.\n\nIn preparing our financial statements, we make assumptions, judgments and estimates for a number of items. These assumptions, judgments and estimates are drawn from historical experience and various other factors that we believe are reasonable under the circumstances as of the date of the consolidated financial statements. Actual results could differ materially from our estimates, and such differences could significantly impact our financial results.\n\nOur Swiss pension plan exposes us to various risks, including investment risk, interest rate risk, longevity risk and risk related to underfunding of the pension plan.\n\nAs an asset-based pension plan managed by a third party, the collective foundation Sammelstiftung Vita, Zürich, we' are exposed to potential undervaluation. The collective foundation Sammelstiftung Vita, Zürich is able to adapt the contributions and benefits at any time. In case of underfunding, this may involve special payments from the employer. The collective foundation Sammelstiftung Vita, Zürich may terminate the affiliation contract with the Company, so that we must join another foundation. Depending on the conditions of the affiliation contract and the current partial liquidation regulations, an underfunding within the meaning of pension law (Art. 44 BVV/OPP 2) and longevity may be transferred.\n\n36"}