Washington, D.C. 20549

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended December 31, 2021
or
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from ___ to ___

Commission File Number 001-36632

(Exact name of registrant as specified in its charter)

2015 W. Chestnut Street, Alhambra, California, 91803

Registrant’s telephone number, including area code: (626) 293-3400

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ☐ Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☑ Smaller reporting company ☐ Emerging growth company

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

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

As of February 7, 2022, the number of shares outstanding of our no par value common stock totaled 37,277,592.

•uncertainties regarding the effects of the COVID-19 pandemic and the impact of measures intended to reduce its spread on our business and operations, which is evolving and beyond our control;

•the effect of component shortages and any alternatives thereto;

•the rapidly evolving markets for our products and uncertainty regarding the development of these markets;

•our historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period;

•delays and other difficulties in commercializing new products;

•the failure of new products: (a) to perform as expected without material defects, (b) to be manufactured at acceptable volumes, yields, and cost, (c) to be qualified and accepted by our customers, and (d) to successfully compete with products offered by our competitors;

•uncertainties concerning the availability and cost of commodity materials and specialized product components that we do not make internally;

•actions by competitors;

•risks and uncertainties related to applicable laws and regulations, including the impact of changes to applicable tax laws and tariff regulations;

•acquisition-related risks, including that (a) the revenues and net operating results obtained from the Systron Donner Inertial, Inc. ("SDI") business may not meet our expectations, (b) there could be losses and liabilities arising from the acquisition of SDI that we will not be able to recover from any source and (c) we may not realize sufficient scale in our Navigation and Inertial Sensing product line from the SDI acquisition and will need to take additional steps, including making additional acquisitions, to achieve our growth objectives for this product line;

•risks related to our ability to obtain capital;

•risks related to the transition of certain of our manufacturing operations from our Beijing facility to a contract manufacturer’s facility;

•risks and uncertainties related to manufacturing and production capacity and expansion plans related thereto; and

•other risks and uncertainties discussed in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, as such risk factors may be amended, supplemented or superseded from time to time by our subsequent periodic reports we file with the Securities and Exchange Commission (“SEC”).

			For the Three Months Ended December 31,
			2021						2020
Revenue			$	42,236					$	33,426
Cost of revenue			26,439						20,854
Gross profit			15,797						12,572
Operating expense:
Selling, general, and administrative			7,187						5,757
Research and development			4,627						4,296
Restructuring charge			1,298						41
Loss (gain) on sale of assets			187						(29)
Total operating expense			13,299						10,065
Operating income			2,498						2,507
Other income:
Interest expense, net			(11)						(49)
Foreign exchange gain			42						237
Total other income			31						188
Income before income tax expense			2,529						2,695
Income tax expense			(115)						(126)
Net income			$	2,414					$	2,569
Foreign exchange translation adjustment			20						(10)
Comprehensive income			$	2,434					$	2,559
Per share data
Net income per basic share			$	0.07					$	0.09
Weighted-average number of basic shares outstanding			36,950						29,503
Net income per diluted share			$	0.06					$	0.08
Weighted-average number of diluted shares outstanding			39,031						30,377

			As of
			December 31, 2021						September 30, 2021
ASSETS
Current assets:
Cash and cash equivalents			$	74,896					$	71,621
Restricted cash			1,062						61
Accounts receivable, net of credit loss of $425 and $260, respectively			32,382						31,849
Contract assets			238						361
Inventory			31,283						32,309
Prepaid expenses and other current assets			7,046						6,877
Assets held for sale			1,052						1,241
Total current assets			147,959						144,319
Property, plant, and equipment, net			23,219						22,544
Goodwill			69						69
Operating lease right-of-use assets			20,140						13,489
Other intangible assets, net			161						167
Other non-current assets			213						225
Total assets			$	191,761					$	180,813
LIABILITIES and SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	17,033					$	16,686
Accrued expenses and other current liabilities			10,344						9,936
Operating lease liabilities - current			941						1,198
Total current liabilities			28,318						27,820
Operating lease liabilities - non-current			19,628						12,684
Asset retirement obligations			2,058						2,049
Other long-term liabilities			794						794
Total liabilities			50,798						43,347
Commitments and contingencies (Note 10)
Shareholders’ equity:
Common stock, no par value, 50,000 shares authorized; 44,181 shares issued and 37,275 shares outstanding as of December 31, 2021; 43,890 shares issued and 36,984 shares outstanding as of September 30, 2021			783,329						782,266
Treasury stock at cost; 6,906 shares as of December 31, 2021 and September 30, 2021			(47,721)						(47,721)
Accumulated other comprehensive income			707						687
Accumulated deficit			(595,352)						(597,766)
Total shareholders’ equity			140,963						137,466
Total liabilities and shareholders’ equity			$	191,761					$	180,813

(unaudited)

You should read the following discussion of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included in Financial Statements under Item 1 within this Quarterly Report. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. See Cautionary Statement Regarding Forward-Looking Statements preceding Item 1 of this Quarterly Report.

COVID-19

The following table sets forth our Condensed Consolidated Statements of Operations and Comprehensive Income as a percentage of revenue:

			For the Three Months Ended December 31,
			2021						2020
Revenue			100.0		%				100.0		%
Cost of revenue			62.6						62.4
Gross profit			37.4						37.6
Operating expense:
Selling, general, and administrative			17.0						17.2
Research and development			11.0						12.9
Restructuring charge			3.1						0.1
Loss (gain) on sale of assets			0.4						(0.1)
Total operating expense			31.5						30.1
Operating income			5.9						7.5
Other income:
Interest expense, net			—						(0.1)
Foreign exchange gain			0.1						0.7
Total other income			0.1						0.6
Income before income tax expense			6.0						8.1
Income tax expense			(0.3)						(0.4)
Net income			5.7		%				7.7		%
Foreign exchange translation adjustment			0.1						—
Comprehensive income			5.8		%				7.7		%

•We maintain a credit facility with Wells Fargo that provides us with a revolving credit line of up to $15.0 million that can be used as required for operations, subject to certain liquidity and availability requirements. The Credit Facility had $13.4 million available for borrowing as of December 31, 2021. See Note 8 - Credit Facility and Debt in the notes to the condensed consolidated financial statements for additional information regarding the Credit Facility.

•On February 16, 2021, we closed our offering of 6,655,093 shares of our common stock at a price of $5.40 per share, resulting in net proceeds to us from the offering of $33.1 million. See Management’s Discussion and Analysis of Financial Condition and Results of Operations Recent Developments under the heading "Equity Offering" for additional information regarding the equity offering.

•In October 2019, we entered into the Hytera Asset Purchase Agreement pursuant to which we agreed to sell certain of our CATV Lasers and Transmitters manufacturing equipment for purposes of outsourcing manufacturing of our CATV Lasers and Transmitters product lines to Hytera. In August 2021, we entered into the Fastrain Asset Purchase Agreement, pursuant to which, among other items, Fastrain agreed to purchase the same equipment subject to the Hytera Asset Purchase Agreement, along with additional equipment, for aggregate consideration of $6.2 million. See Management’s Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments under the heading "Hytera and Fastrain Transactions" for additional information regarding the transactions with Hytera and Fastrain.

Accounts Receivable We generally expect the level of accounts receivable at any given quarter end to reflect the level of sales in that quarter. Accounts receivable balances have fluctuated historically due to the timing of account collections, timing of product shipments, and/or change in customer credit terms.

Inventory We generally expect the level of inventory at any given quarter end to reflect the change in our expectations of forecasted sales during the quarter. Inventory balances have fluctuated historically due to the timing of customer orders and product shipments, changes in internal forecasts related to customer demand, as well as adjustments related to excess and obsolete inventory.

Accounts Payable The fluctuation of our accounts payable balances is primarily driven by changes in inventory purchases as well as changes related to the timing of actual payments to vendors.

Accrued Expenses Our largest accrued expense typically relates to compensation. Historically, fluctuations of accrued expense accounts have primarily related to changes in the timing of actual compensation payments, receipt or application of advanced payments, adjustments to warranty accrual, and accruals related to professional fees.

			For the Three Months Ended December 31,
(in thousands, except percentages)			2021						2020						Change
Net cash used in investing activities			$	(1,936)					$	(870)					$	(1,066)					122.5		%

a.Evaluation of Disclosure Controls and Procedures

b.Changes in Internal Control over Financial Reporting

See the disclosures under the caption “Legal Proceedings” in Note 10 - Commitments and Contingencies in the notes to condensed consolidated financial statements for disclosures related to our legal proceedings, which disclosures are incorporated herein by reference.

** Filed herewith

*** Furnished herewith