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 June 30, 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 August 2, 2021, the number of shares outstanding of our no par value common stock totaled 36,884,544.

•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 II, Item 1A, Risk Factors in this Quarterly Report on Form 10-Q and in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, 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 June 30,												For the nine months ended June 30,
			2021						2020						2021						2020
Revenue			$	42,658					$	27,266					$	114,490					$	76,598
Cost of revenue			25,433						18,048						70,059						53,479
Gross profit			17,225						9,218						44,431						23,119
Operating expense:
Selling, general, and administrative			6,081						5,936						17,941						18,962
Research and development			4,500						4,807						12,567						14,033
Loss (gain) on sale of assets			250						(312)						439						(2,229)
Total operating expense			10,831						10,431						30,947						30,766
Operating income (loss)			6,394						(1,213)						13,484						(7,647)
Other income (expense):
Gain on extinguishment of debt			6,561						—						6,561						—
Interest income (expense), net			579						(40)						481						(54)
Foreign exchange gain (loss)			87						(20)						256						(29)
Total other income (expense)			7,227						(60)						7,298						(83)
Income (loss) before income tax (expense) benefit			13,621						(1,273)						20,782						(7,730)
Income tax (expense) benefit			(6)						(14)						(214)						27
Net income (loss)			$	13,615					$	(1,287)					$	20,568					$	(7,703)
Foreign exchange translation adjustment			(5)						2						(26)						(5)
Comprehensive income (loss)			$	13,610					$	(1,285)					$	20,542					$	(7,708)
Per share data
Net income (loss) per basic share			$	0.37					$	(0.04)					$	0.62					$	(0.27)
Weighted-average number of basic shares outstanding			36,768						29,295						33,069						29,052
Net income (loss) per diluted share			$	0.35					$	(0.04)					$	0.59					$	(0.27)
Weighted-average number of diluted shares outstanding			38,893						29,295						34,777						29,052

			As of
			June 30, 2021						September 30, 2020
ASSETS
Current assets:
Cash and cash equivalents			$	67,191					$	30,390
Restricted cash			1,106						148
Accounts receivable, net of credit loss of $192 and $227, respectively			31,536						25,324
Contract assets			220						1,566
Inventory			33,362						25,525
Prepaid expenses and other current assets			6,295						5,589
Assets held for sale			1,404						1,568
Total current assets			141,114						90,110
Property, plant, and equipment, net			21,847						21,052
Goodwill			69						69
Operating lease right-of-use assets			13,744						14,566
Other intangible assets, net			175						202
Other non-current assets			243						242
Total assets			$	177,192					$	126,241
LIABILITIES and SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable			$	19,184					$	16,484
Accrued expenses and other current liabilities			9,961						11,577
Operating lease liabilities - current			1,153						992
Total current liabilities			30,298						29,053
PPP liability - non-current			—						6,488
Operating lease liabilities - non-current			12,954						13,735
Asset retirement obligations			2,040						2,022
Other long-term liabilities			794						794
Total liabilities			46,086						52,092
Commitments and contingencies (Note 11)
Shareholders’ equity:
Common stock, no par value, 50,000 shares authorized; 43,787 shares issued and 36,881 shares outstanding as of June 30, 2021; 36,461 shares issued and 29,551 shares outstanding as of September 30, 2020			780,776						744,361
Treasury stock at cost; 6,906 shares as of June 30, 2021 and 6,910 shares as of September 30, 2020			(47,721)						(47,721)
Accumulated other comprehensive income			892						918
Accumulated deficit			(602,841)						(623,409)
Total shareholders’ equity			131,106						74,149
Total liabilities and shareholders’ equity			$	177,192					$	126,241

(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 (Loss) as a percentage of revenue:

			For the three months ended June 30,												For the nine months ended June 30,
			2021						2020						2021						2020
Revenue			100.0		%				100.0		%				100.0		%				100.0		%
Cost of revenue			59.6						66.2						61.2						69.8
Gross profit			40.4						33.8						38.8						30.2
Operating expense:
Selling, general, and administrative			14.3						21.8						15.7						24.8
Research and development			10.5						17.6						11.0						18.3
Loss (gain) on sale of assets			0.6						(1.1)						0.4						(2.9)
Total operating expense			25.4						38.3						27.0						40.2
Operating income (loss)			15.0						(4.5)						11.8						(10.0)
Other income (expense) :
Gain on extinguishment of debt			15.4						—						5.7						—
Interest income (expense), net			1.4						(0.1)						0.4						(0.1)
Foreign exchange gain (loss)			0.2						(0.1)						0.2						—
Total other income (expense)			16.9						(0.2)						6.4						(0.1)
Income (loss) before income tax expense			31.9						(4.7)						18.2						(10.1)
Income tax expense			—						—						(0.2)						—
Net income (loss)			31.9		%				(4.7)		%				18.0		%				(10.1)		%
Foreign exchange translation adjustment			—						—						—						—
Comprehensive income (loss)			31.9		%				(4.7)		%				17.9		%				(10.1)		%