Revenue Performance - Revenue for the three months ended March 31, 2024, was 40,673,000,adecreaseof23.353,030,000 for the same period in 2023[118]. - Data center revenue increased by 42.4% to 28,986,000,representing71.38,736,000, representing 21.5% of total revenue[121]. - The company’s top ten customers accounted for 92% of revenue in the three months ended March 31, 2024, highlighting the need for diversification in the customer base[122]. Profitability and Loss - Gross profit for the three months ended March 31, 2024, was 7,591,000,withagrossmarginof18.79,244,000 and a margin of 17.4% in the same period of 2023[118]. - The net loss for the three months ended March 31, 2024, was 23,170,000,or57.016,292,000, or 30.8% of revenue, in the same period of 2023[118]. - Comprehensive loss increased by 10.2million,or69.529,237,000, representing 71.9% of revenue, with research and development expenses increasing to 11,712,000,or28.83.2 million, or 37.2%, for the three months ended March 31, 2024, primarily due to increased personnel-related expenses and project costs[126]. - Sales and marketing expenses increased by 1.5million,or63.21.2 million, or 9.4%, for the three months ended March 31, 2024, mainly due to higher legal fees and share-based compensation[128]. Cash Flow and Financing - For the three months ended March 31, 2024, net cash used in operating activities was 28.5million,comparedto9.4 million for the same period in 2023, reflecting a significant increase in cash outflow[143][144]. - Net cash used in investing activities for the three months ended March 31, 2024, was 8.1million,upfrom0.8 million in the same period of 2023, primarily due to the purchase of additional plant, machinery, and equipment[145]. - Net cash used in financing activities for the three months ended March 31, 2024, was 1.4million,adecreasefromacashinflowof1.1 million in the same period of 2023, attributed to net repayment of bank acceptance[146]. - The company sold approximately 270,000 shares of common stock with gross proceeds of approximately 4.0millionunderthecurrentATMOffering[139].StrategicInitiatives−Thecompanyhasenteredintoafive−yearsupplyagreementwithMicrosofttodesignandmanufacturedatacenterproducts,indicatingastrategicfocusonexpandingpartnerships[122].−Thecompanyanticipatesincreaseddemandfor400Gdatacenterproductsthroughtheendof2024basedoncustomerforecasts[122].−ThecompanyoperatesthreemanufacturingsitesinSugarLand,Texas,Ningbo,China,andTaipei,Taiwan,withafocusonmaintainingdomesticproductioncapacityforcompetitiveadvantage[110].−ThecompanyisexperiencingatransitionintheCATVmarketduetotheshiftfromDOCSIS3.1toDOCSIS4.0,impactingordervolumesforolderproducts[121].FinancialPosition−AsofMarch31,2024,thecompanyhad29.4 million of unused borrowing capacity from all loan agreements and cash, cash equivalents, and restricted cash totaling 17.4million[135].−AsofMarch31,2024,thecompanyhad29.4 million of unused borrowing capacity and a total loan balance of 24.1 million from various lenders in China[147][152]. - The company anticipates future capital requirements will depend on growth rate, R&D spending, and expansion of sales and marketing activities, with cash and cash equivalents decreasing by approximately 37.7 million compared to December 31, 2023[151]. - The construction of a new factory in Ningbo, China, is estimated to cost approximately 27.5million,with27.4 million already paid as of March 31, 2024[150]. - The company issued 80.2millionof5.2580.5 million of 5% convertible senior notes due in 2024[148]. Economic Environment - The annual inflation rate in the US was 3.4% in 2023, which has not materially impacted the company's sales or operating results during the three months ended March 31, 2024[154]. - The net loss for the three months ended March 31, 2024, was 23.2million,whichincludednon−cashitemsof10.2 million, while the net loss for the same period in 2023 was 16.3million[143][144].−Interestincomeincreasedby0.2 million, or 688.3%, for the three months ended March 31, 2024, due to higher saving balances and interest rates[130].
