​ This Quarterly Report on Form 10-Q, and in particular the following Management’s Discussion and Analysis of Financial Condition and Results of Operations, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements involve risks and uncertainties. Forward-looking statements are identified by words such as “anticipates,” “believes,” “expects,” “intends,” “may,” “will,” and other similar expressions. In addition, any statements which refer to expectations, projections, or other characterizations of future events or circumstances are forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including those set forth in this report under “Risk Factors,” those described elsewhere in this report, and those described in our other reports filed with the Securities and Exchange Commission (“SEC”). We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report, and we undertake no obligation to update these forward-looking statements after the filing of this report. You are urged to review carefully and consider our various disclosures in this report and in our other reports publicly disclosed or filed with the SEC that attempt to advise you of the risks and factors that may affect our business. ​ Overview ​ We are a provider of high-performance semiconductor memory solutions for in-place associative computing applications in high growth markets such as artificial intelligence and high-performance computing, including natural language processing and computer vision. Our initial APU products are focused on applications using similarity search, but have not resulted in material revenues to date. Similarity search is used in visual search queries for ecommerce, computer vision, drug discovery, cybersecurity and service markets such as NoSQL, Elasticsearch, and OpenSearch. We have solutions to accelerate multimodal vector search for OpenSearch and general Fast Vector Search, and for processing large area SAR images in real-time at high resolution. ​ 18 Table of Contents Our revenue is currently generated from the design, development and marketing of static random access memories, or SRAMs, that operate at speeds of less than 10 nanoseconds, which we refer to as Very Fast SRAMs, primarily for the networking and telecommunications, test equipment and the military/defense and aerospace markets. We are subject to the highly cyclical nature of the semiconductor industry, which has experienced significant fluctuations, often in connection with fluctuations in demand for the products in which semiconductor devices are used. Our revenues have been substantially impacted by significant fluctuations in sales to our largest end user customers, Nokia, KYEC and Cadence Design Systems. We expect that future direct and indirect sales to Nokia, KYEC and Cadence Design Systems will continue to fluctuate significantly on a quarterly basis. ​ The networking and telecommunications market has accounted for a significant portion of our net revenues in the past and has declined during the past several years and is expected to continue to decline. In anticipation of the decline of the networking and telecommunications market, we have been using the revenue generated by the sales of high-speed synchronous SRAM products to finance the development of our new in-place associative computing solutions and the marketing and sale of new types of SRAM products such as radiation-hardened and radiation-tolerant SRAMs. ​ In January 2026, we announced a new proof-of-concept (“POC”) engagement with two government agencies. GSI is partnering with G2 Tech, an Israeli deep-tech AI company, on Sentinel, a program to develop an autonomous perimeter security system that manages drones and cameras in real time for advanced monitoring, detection, and response. The project is jointly backed by the U.S. Department of War (Department of Defense), and a foreign government agency. Under the POC, G2 Tech is leading the system-level platform development, focusing on real-time data processing, monitoring, and autonomous response workflows for high-load and mission-critical environments across unmanned systems. The platform supports autonomous operation while maintaining human oversight and decision-support capabilities. Gemini-II leverages the APU’s compute-in-memory architecture to process sensor data in place, enabling on-device AI inference and real-time responsiveness. Total governmental funding for the POC is expected to be in the millions of dollars. GSI expects to receive roughly $1.0 million to support software optimization and integration of the Gemini-II platform into the Sentinel system. In May 2026, we announced that we were awarded Phase I of a Smart City project by a local government agency in Taiwan. The completion of Phase I will mark our first smart city deployment of the Gemini-II APU. In April 2026, we announced that we were awarded a Phase II award under the U.S. Army’s xTech Small Business Innovation Research (SBIR) program to develop a ruggedized edge AI platform using our Gemini-II APU for the tactical edge. Pursuant to an agreed-upon schedule, we will receive milestone payments which total an estimated $2.0 million upon successful completion of each milestone. These funds will offset the cost of designing and developing a ruggedized edge-processing platform based on the Gemini-II APU, with testing in representative operational environments intended to validate performance across real-time AI workloads, such as sensor data processing, object detection, and command-and-control analytics. During the first fiscal quarter, we made progress validating Gemini-II’s performance-per-watt advantages. We completed radiation testing on a standard commercial Gemini-II device, and confirmed that the device continued to operate normally under radiation levels representative of harsh aerospace environments. The Gemini-II device is production ready. As a result of these successful validation efforts, we have shifted our focus to commercializing Gemini-II, including expanding the range of applications Gemini-II can address and pursuing broader customer adoption. We also continued development of our AI-assisted Software Development Kit (“SDK”), which currently remains on track for release in September 2026. The SDK is expected to accelerate software development, simplify application deployment and provide a foundation for working with a broader network of partners and system integrators. ​ 19 Table of Contents As of June 30, 2026, we had cash and cash equivalents of $77.0 million, with no debt. We have a team in-place with tremendous depth and breadth of experience and knowledge, with a legacy business that is providing an ongoing source of funding for the development of new product lines. In May 2026, we sold 950,401 shares of common stock pursuant to an At-the-Market offering, at an average price of $10.10 for net proceeds of $9.3 million. Generally, our primary source of liquidity is cash equivalents. Our level of cash equivalents has historically been sufficient to meet our current and longer-term operating and capital needs. We believe that during the next 12 months, continued inflationary pressures, increased or new tariffs, export controls and other trade barriers, trade disputes, and increasing geopolitical tensions will continue to negatively impact general economic activity and demand in our end markets. Although it is difficult to estimate the length or severity of these conditions, we expect them to have an adverse effect on our results of operations, financial position, including potential impairments, and liquidity through the remainder of fiscal 2027. Revenues. Substantially all of our revenues are derived from sales of our Very Fast SRAM products. Direct and indirect sales to networking and telecommunications OEMs accounted for 16% to 34% of our net revenues during our last three fiscal years. We also sell our products to OEMs that manufacture products for military and aerospace applications such as radar and guidance systems, missiles and satellites, for test and measurement applications such as high-speed testers, for automotive applications such as smart cruise control, and for medical applications such as ultrasound and CAT scan equipment. ​ The average selling price of our products has increased or remained unchanged in recent years. However, as is typical in the semiconductor industry, the selling prices of our products have historically declined over the life of the product. If prices decline, our ability to increase net revenues, therefore, is dependent upon our ability to increase unit sales volumes of existing products and to introduce and sell new products with higher average selling prices in quantities sufficient to compensate for the anticipated declines in selling prices of our more mature products. Our ability to increase unit sales volumes is dependent primarily upon increases in customer demand but, particularly in periods of increasing demand, can also be affected by our ability to increase production through the availability of increased wafer fabrication capacity from TSMC, our wafer supplier, and our ability to increase the number of good integrated circuit die produced from each wafer through die size reductions and yield enhancement activities. We may experience fluctuations in quarterly net revenues for a number of reasons. Historically, orders on hand at the beginning of each quarter are insufficient to meet our revenue objectives for that quarter and are generally cancelable up to 30 days prior to scheduled delivery. Accordingly, we depend on obtaining and shipping orders in the same quarter to achieve our revenue objectives. In addition, the timing of product releases, purchase orders and product availability could result in significant product shipments at the end of a quarter. Failure to ship these products by the end of the quarter may adversely affect our operating results. Furthermore, our customers may delay scheduled delivery dates and/or cancel orders within specified timeframes without significant penalty. We sell our products through our direct sales force, international and domestic sales representatives and distributors. Our customer contracts, which may be in the form of purchase orders, contracts or purchase agreements, contain performance obligations for delivery of agreed upon products. Delivery of all performance obligations contained within a contract with a customer typically occurs at the same time (or within the same accounting period). Transfer of control occurs at the time of shipment, title and the risks and rewards of ownership have passed to the customer, and we have a right to payment. Thus, we will recognize revenue upon shipment of the product for direct sales and sales to our distributors. KYEC was our largest end user customer in fiscal 2026 and 2025. Nokia was our largest end user customer in fiscal 2024. KYEC purchases product through contract manufacturers and distributors. Based on information provided to us by KYEC’s contract manufacturers and distributors, purchases by KYEC represented approximately 16%, 14%, 23% and 3% of our net revenues in the three months ended June 30, 2026, and in fiscal 2026, 2025 and 2024, respectively. Nokia purchases products directly from us and through contract manufacturers and distributors. Based on information provided to us by its contract manufacturers and our distributors, purchases by Nokia represented approximately 5%, 6%, 12% and 21% of our net revenues in the three months ended June 30, 2026, and in fiscal 2026, 2025 and 2024, respectively. Cadence Design Systems purchases products through contract manufacturers and distributors. Based on information provided to us by its contract manufacturers and our distributors, purchases by Cadence Design Systems represented approximately 7%, 12%, 8% and 8% of our net 20 Table of Contents revenues in the three months ended June 30, 2026, and in fiscal 2026, 2025 and 2024, respectively. Our revenues have been substantially impacted by significant fluctuations in sales to Nokia, KYEC and Cadence Design Systems, and we expect that future direct and indirect sales to Nokia, KYEC and Cadence Design Systems will continue to fluctuate substantially on a quarterly basis and that such fluctuations may significantly affect our operating results in future periods. To our knowledge, none of our other OEM customers accounted for more than 10% of our net revenues in the three months ended June 30, 2026 or in fiscal 2026, 2025 or 2024. Cost of Revenues. Our cost of revenues consists primarily of wafer fabrication costs, wafer sort, assembly, test and burn-in expenses, the amortized cost of production mask sets, stock-based compensation and the cost of materials and overhead from operations. All of our wafer manufacturing and assembly operations, and a significant portion of our wafer sort testing operations, are outsourced. Accordingly, most of our cost of revenues consists of payments to TSMC and independent assembly and test houses. Because we do not have long-term, fixed-price supply contracts, our wafer fabrication, assembly and other outsourced manufacturing costs are subject to the cyclical fluctuations in demand for semiconductors. In recent years, we have experienced increased costs as a result of supply chain constraints for wafers and outsourced assembly, burn-in and test operations. We review our manufacturing costs on a regular basis and pass on any cost increases to our customers when it makes sense to do so. Cost of revenues also includes expenses related to supply chain management, quality assurance, and final product testing and documentation control activities conducted at our headquarters in Sunnyvale, California and our operations in Taiwan. ​ Gross Profit. Our gross profit margins vary among our products and are generally greater on our radiation-hardened and radiation-tolerant SRAMs, on our higher density products and, within a particular density, greater on our higher speed and industrial temperature products. We expect that our overall gross margins will fluctuate from period to period as a result of shifts in product mix, changes in average selling prices and our ability to control our cost of revenues, including costs associated with outsourced wafer fabrication and product assembly and testing. ​ Research and Development Expenses. Research and development expenses consist primarily of salaries and related expenses for design engineers and other technical personnel, the cost of developing prototypes, stock-based compensation and fees paid to consultants. We charge all research and development expenses to operations as incurred. We charge mask costs used in production to cost of revenues over a 12-month period. However, we charge costs related to pre-production mask sets, which are not used in production, to research and development expenses at the time they are incurred. We believe that continued investment in research and development is critical to our long-term success, and we expect to continue to devote significant resources to product development activities. In particular, we are devoting substantial resources to the development of our in-place associative computing products. Accordingly, we expect that our research and development expenses will increase in future periods as we expand our hardware and software development teams to commercialize our Gemini-II product offerings and develop Plato product offerings. Research and development expenses will be substantial in future periods and may lead to operating losses in some periods. Such expenses as a percentage of net revenues may fluctuate from period to period. ​ Selling, General and Administrative Expenses. Selling, general and administrative expenses consist primarily of commissions paid to independent sales representatives, salaries, stock-based compensation and related expenses for personnel engaged in sales, marketing, administrative, finance and human resources activities, professional fees, costs associated with the promotion of our products and other corporate expenses. We expect that our sales and marketing expenses will increase in absolute dollars in future periods if we are able to grow and expand our sales force but that, to the extent our revenues increase in future periods, these expenses will generally decline as a percentage of net revenues. We also expect that, in support of any future growth that we are able to achieve, general and administrative expenses will generally increase in absolute dollars. ​ Goodwill. We had a goodwill balance of $8.0 million as of both June 30, 2026 and March 31, 2026. The goodwill resulted from the acquisition of MikaMonu Group Ltd. in fiscal 2016. We completed our annual impairment test during the fourth quarter of fiscal 2026 and concluded that there was no impairment, as it was more likely than not that the fair value of our sole reporting unit exceeded its carrying value and the performance of a quantitative impairment test was not required. ​ 21 Table of Contents Intangible Assets. We review identifiable amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess of the carrying value of the asset over its fair value. There were no impairment indicators noted as of June 30, 2026 and March 31, 2026. Based on the uncertainty of forecasts inherent with a new product, events such as the failure to generate forecasted revenue from the APU product, could result in a non-cash impairment charge in future periods. ​ Results of Operations ​ The following table sets forth statement of operations data as a percentage of net revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ ​ 2026 ​ ​ 2025 ​ Net revenues ​ 100.0 % ​ 100.0 % Cost of revenues ​ 46.6 ​ ​ 41.9 ​ Gross profit ​ 53.4 ​ ​ 58.1 ​ Operating expenses: ​ ​ ​ ​ ​ ​ Research and development ​ 93.5 ​ ​ 49.3 ​ Selling, general and administrative ​ 45.2 ​ ​ 43.4 ​ Total operating expenses ​ 138.7 ​ ​ 92.7 ​ Loss from operations ​ (85.3) ​ ​ (34.6) ​ Interest and other income, net ​ 8.2 ​ ​ 0.2 ​ Loss before income taxes ​ (77.1) ​ ​ (34.4) ​ Provision (benefit) for income taxes ​ (1.2) ​ ​ 0.9 ​ Net loss ​ (75.9) ​ ​ (35.3) ​ ​ Net Revenues. Net revenues were $6.3 million in each of the three months ended June 30, 2025 and 2026. The overall average selling price of all units shipped in the quarter ended June 30, 2026 decreased by 17.7% compared to the quarter ended June 30, 2025 and the number of units shipped increased by 21.2% in the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025. The change in the average selling price was due to changes in product mix. KYEC, which is a leading provider in the test and measurement market, was our largest end user customer in fiscal 2026. Direct and indirect sales to KYEC increased by $749,000 from $267,000 in the three months ended June 30, 2025 to $1.0 million in the three months ended June 30, 2026. Direct and indirect sales to Nokia decreased by $229,000 from $536,000 in the three months ended June 30, 2025 to $307,000 in the three months ended June 30, 2026. Direct and indirect sales to Cadence Design Systems decreased by $1.0 million from $1.5 million in the three months ended June 30, 2025 to $465,000 in the three months ended June 30, 2026. ​ Shipments to KYEC, Nokia and Cadence Design Systems will continue to fluctuate on a quarterly basis as a result of demand and shipments to their end customers. While recent customer order patterns have been particularly variable, these fluctuations are related to economic and external factors, which include worldwide inflationary pressures, increased or new tariffs, export controls and other trade barriers and trade disputes, increasing geopolitical tensions and the decline in the global economic environment. ​ Cost of Revenues. Cost of revenues increased by 11.8% from $2.6 million in the three months ended June 30, 2025 to $2.9 million in the three months ended June 30, 2026. The increase in cost of revenues was primarily related to changes in the mix of products and customers. Cost of revenues included a provision for excess and obsolete inventories of $124,000 in the three months ended June 30, 2026 compared to $70,000 in the three months ended June 30, 2025. Cost of revenues included stock-based compensation expense of $70,000 and $44,000 in the three months ended June 30, 2026 and 2025, respectively. ​ Gross Profit. Gross profit decreased by 7.7% from $3.7 million in the three months ended June 30, 2025 to $3.4 million in the three months ended June 30, 2026. Gross margin decreased from 58.1% in the three months 22 Table of Contents ended June 30, 2025 to 53.4% in the three months ended June 30, 2026. The change in gross margin was primarily related to changes in the mix of products and customers. ​ Research and Development Expenses. Research and development expenses increased 90.5% from $3.1 million in the three months ended June 30, 2025 to $5.9 million in the three months ended June 30, 2026. The increase in research and development spending was primarily related to increases of $1.1 million in outside design consulting expenses for our Plato project, $916,000 in payroll related expenses and $322,000 in stock-based compensation. Research and development expense also reflects higher software development costs from our Israeli-based team, primarily due to the strengthening of the Israeli shekel relative to the U.S. dollar. Research and development expenses in the three months ended June 30, 2026 and 2025 were also offset by $336,000 and $543,000, respectively, of funding received under the government contracts discussed above. Research and development expenses included stock-based compensation expense (credit to expense) of $260,000 and ($62,000) in the three months ended June 30, 2026 and 2025, respectively. ​ Selling, General and Administrative Expense. Selling, general and administrative expenses increased 4.6% from $2.7 million in the three months ended June 30, 2025 to $2.9 million in the three months ended June 30, 2026. The increase in selling, general and administrative expenses was primarily due to an increase of $198,000 in stock-based compensation expense which was partially offset by a $132,000 decrease in payroll related expense. Selling, general and administrative expenses included stock-based compensation expense of $557,000 and $359,000 in the three months ended June 30, 2026 and the three months ended June 30, 2025, respectively. ​ Interest Income and Other Expense, Net. Interest income and other income expense, net increased from income of $13,000 in the three months ended June 30, 2025 to $517,000 in the three months ended June 30, 2026. Interest income increased by $454,000 primarily due to higher cash balances invested in money market funds, reflecting proceeds from stock option exercises under our employee stock option plans and sales of common stock under our At-the-Market offering during the quarter. The foreign currency exchange loss decreased from ($53,000) in the three months ended June 30, 2025 to ($3,000) in the three months ended June 30, 2026. The exchange loss in each period was primarily related to our Taiwan operations and operations in Israel. ​ Provision (benefit) for Income Taxes. The provision for income taxes decreased from $54,000 in the three months ended June 30, 2025 to a benefit of ($76,000) in the three months ended June 30, 2026. This change was primarily due to fluctuations in the relative mix of income among our operating jurisdictions and changes in deferred tax assets. Net Loss. Net loss increased from $2.2 million in the three months ended June 30, 2025 to $4.8 million in the three months ended June 30, 2026. This fluctuation was primarily due to the changes in net revenues, gross profit and operating expenses discussed above. ​ Liquidity and Capital Resources ​ As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents of $77.0 million compared to cash and cash equivalents of $67.2 million as of March 31, 2026. ​ Net cash used in operating activities was $3.9 million and $1.7 million in the three months ended June 30, 2026 and 2025, respectively. The primary uses of cash in the three months ended June 30, 2026 were the net loss of $4.8 million and an increase of $2.2 million in prepaid expenses and other assets. The increase in prepaid expenses and other assets was primarily due to prepayments related to design consulting services for our Plato project. The primary source of cash in the three months ended June 30, 2026 was a reduction in accounts receivable of $1.7 million. ​ Inventory increased from $4.1 million at March 31, 2026 to approximately $4.5 million at June 30, 2026. This increase was primarily attributable to a build of inventory undertaken in response to extended and increasingly unpredictable manufacturing lead times and rising minimum order quantity requirements imposed by our back-end manufacturing suppliers. We expect that we may continue to carry higher levels of inventory for the foreseeable future in order to mitigate the risk of supply disruptions and meet customer delivery commitments in light of these industry-wide constraints. 23 Table of Contents The primary uses of cash in the three months ended June 30, 2025 were the net loss of $2.2 million and a decrease of $1.7 million in accrued expenses and other liabilities. The decrease in accrued expenses and other liabilities was primarily related to payment made for a production mask set for our APU2 that was accrued at March 31, 2025. The primary source of cash in the three months ended June 30, 2025 was a reduction in accounts receivable of $1.6 million. ​ Net cash used in investing activities was $358,000 in the three months ended June 30, 2026 compared to $21,000 in the three months ended June 30, 2025. Investment activities in the three months ended June 30, 2026 and 2025 primarily consisted of the purchase of property and equipment. ​ Net cash provided by financing activities in the three months ended June 30, 2026 primarily consisted of the net proceeds from the sale of common stock pursuant to an At-the-Market offering of $9.3 million and the proceeds from the sale of common stock pursuant to our employee stock plans of $4.8 million. Net cash provided by financing activities in the three months ended June 30, 2025 primarily consisted of the net proceeds from the sale of common stock pursuant to an At-the-Market offering of $10.8 million and the proceeds from the sale of common stock pursuant to our employee stock plans of $226,000. ​ We believe that our existing balances of cash and cash equivalents will be sufficient to meet our cash needs for working capital and capital expenditures for at least the next 12 months. Our future capital requirements will depend on many factors, including revenue growth, if any, that we experience, any additional manufacturing cost increases resulting from supply constraints and the continuation of the impact of inflation may have on our business, the extent to which we utilize subcontractors, the levels of inventory and accounts receivable that we maintain, the timing and extent of spending to support our product development efforts and the expansion of our sales and marketing team. Additional capital may also be required for the consummation of any acquisition of businesses, products or technologies that we may undertake. ​ On June 28, 2023, we filed a registration statement on Form S-3, which was declared effective by the SEC on July 19, 2023. On August 1, 2023, we commenced a registered securities offering pursuant to a Sales Agreement (the “Sales Agreement”) with Needham & Company, LLC (“Needham”). The Sales Agreement provides that we may offer and sell our common stock having an aggregate offering price of up to $25.0 million from time to time (the “Offering”) through Needham, acting as our sales agent. In May 2026, we sold 950,401 shares pursuant to the Offering at an average price of $10.10 for proceeds of $9.6 million, less offering costs of $321,000. The registration statement expired in July 2026. ​ We cannot assure you that additional equity financing or debt financing, if required, will be available on terms that are acceptable or at all. ​ As of June 30, 2026, we had $16.8 million in purchase obligations for facility leases, wafer, software and design services obligations that are binding commitments of which $7.4 million are payable in the next twelve months and $9.4 million are committed in the long term. ​ Critical Accounting Estimates ​ Our critical accounting estimates are disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. ​ Off-Balance Sheet Arrangements ​ At June 30, 2026, we did not have any off-balance sheet arrangements or relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Accordingly, we are not exposed to the type of financing, liquidity, market or credit risk that could arise if we had engaged in such relationships. ​ 24 Table of Contents Recent Accounting Pronouncements Please refer to Note 1 to our condensed consolidated financial statements appearing under Part I, Item 1 for a discussion of recent accounting pronouncements that may impact the Company. ​ ​