What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-26 compared with 2024-03-27 · 426 added, 267 removed, 918 unchanged (43% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (Frank, Rimerman & Co.

LLP, San Jose, CA, PCAOB ID:

Report of Independent Registered Public Accounting Firm (Moss Adams LLP, San Francisco, CA, PCAOB ID:

Consolidated Balance Sheets as of December 31, 2023 and January 1, 2023

Consolidated Balance Sheets as of December 29, 2024 and December 31, 2023

Consolidated Statements of Operations for the Fiscal Years 2024, 2023, and 2022

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

QuickLogic Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of QuickLogic Corporation (the “Company”) as of December 31, 2023, and January 1, 2023, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and schedules (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and January 1, 2023, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

To the Board of Directors and

Shareholders of QuickLogic Corporation

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of QuickLogic Corporation and Subsidiaries (collectively, the “Company”) as of December 29, 2024, and the related consolidated statements of operations, stockholders’ equity, and cash flows, for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 29, 2024, and the results of their operations and their cash flows as of and for the year ended December 29, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

federal securities laws and the applicable rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”) and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

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(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which it relates.

Write-downs of Excess and Obsolete Inventories

As described in Notes 1 and 4 to the consolidated financial statements, the Company’s inventories balance was $2.0 million as of December 31, 2023.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Inventory Valuation for Excess or Obsolete Inventory – Refer to Notes 1 and 4 in the Consolidated Financial Statements

As described in Notes 1 and 4 to the consolidated financial statements, the Company’s total inventories, net balance was $1.7 million, for both current and non-current, as of December 29, 2024.

The Company values its inventories at lower of standard cost or net realizable value.

Standard cost approximates actual cost on a first-in, first-out basis.

The Company writes down inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value, and inventory in excess of expected requirements.

The estimate of excess and obsolete inventories is subjective and primarily dependent on the estimates of future demand for a particular product.

Changes in assumptions of product demand could have a significant impact on the amount of write-down recorded.

The determination of write-down of inventories requires management to make significant assumptions and subjective judgments about the future salability of the inventory and the value of obsolete and unmarketable inventory.

These assumptions include the assessment of market conditions and trends, sales forecasts, historic usage, expected demand, anticipated sales price, the stage in the product life cycle of its customers’ products, new product development schedules, the effect new products might have on the sale of existing products, product obsolescence, customer design activity, customer concentrations, product merchantability and other factors.

We identified the write-down of inventories, in particular the estimates for excess and obsolete inventories, as a critical audit matter, because of the significant assumptions and subjective judgments used by management, which involved significant audit effort and the use of especially challenging and subjective auditor judgment when performing audit procedures and evaluating the results of those procedures.

The primary procedures we performed to address this critical audit matter included:

Evaluating the appropriateness of management’s process for developing the estimates for excess and obsolete inventories by:

Evaluating the methodology utilized to calculate the estimate.

The Company writes down inventory that has become obsolete, has a cost basis in excess of its expected net realizable value, or in excess of expected requirements.

The estimate of excess or obsolete inventories is subjective and dependent on the estimates of future demand for a particular product, which significantly relies on the Company’s historical sales.

The determination of the inventory valuation in regard to excess or obsolete inventory requires management to make significant assumptions and subjective judgments about the future salability of the inventory and the value of obsolete inventory.

These assumptions include the assessment of market conditions and trends, sales forecasts, historical sales, anticipated sales price, product obsolescence, customer concentrations, and other factors.

We identified the inventory valuation for excess or obsolete inventory as a critical audit matter due to the significant judgment required by management in estimating the allowance for inventory that is in excess or obsolete.

The complexity and subjectivity of these estimates are heightened by the need to consider historical sales trends, expected product life, forecasted sales demand, and product mix.

This involved significant audit effort and the use of auditor judgment when performing audit procedures and evaluating the results of those procedures.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the inventory valuation of excess or obsolete inventory, and the associated assumptions that the Company identified, included the following, among others:

Evaluating the internal controls related to the inventory valuation of excess or obsolete inventory and determining if those controls were designed and implemented appropriately.

• Evaluating the appropriateness of management’s process for developing the estimates related to the inventory valuation of excess or obsolete inventory by:

Evaluating management’s methodology utilized to calculate the estimates.

Performing inquiries with management as to the composition of the reserve for aged inventory items without recent sales.

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Evaluating the reasonableness of the significant assumptions used by management including those related to future demand by:

Evaluating management’s ability to provide reasonable forecast of sales by comparing management’s prior period sales forecasts to actual results.

Performing inquiries with non-financial personnel, including sales and production employees, regarding obsolete or discontinued inventory items and other factors to corroborate management’s assertions regarding qualitative judgments about excess and obsolete inventories.

Testing the completeness, accuracy, and relevance of the underlying data used in management’s estimate.

Testing the calculations related to the application of the methodology to specific inventory categories by agreement to supporting documentation and recalculation.

Evaluating management’s ability to sell inventory on hand based on the Company’s historical sales.

Performing inquiries with non-financial personnel, regarding obsolete or excess inventory items and other factors to corroborate management’s assertions regarding qualitative judgments about excess or obsolete inventories.

• Evaluating qualitative factors included within the determination of significant assumptions used by management.

Testing the completeness, accuracy, and relevance of the underlying data used in management’s estimates.

Revenue Recognition of Professional Services Contracts

As described in Notes 1 and 14 to the consolidated financial statements, the Company’s eFPGA-related professional services revenue was approximately $13.1 million for the year ended December 29, 2024.

The Company’s professional services revenue is generally recognized at a point in time when control of the asset is transferred to and accepted by the customer.

However, at times, revenue is recognized over time when there is no alternative use for the contract asset and there is an enforceable right to payment for performance completed to date.

We have identified the timing of when control is transferred to the customer as a critical audit matter.

eFPGA-related professional services contracts often include promises to transfer intellectual property licenses to customize hardware products and to provide professional services and technical support services to customers.

Judgment is required by management to allocate the transaction price to the separately identifiable performance obligations in the contract based on each performance obligation’s relative standalone selling price.

eFPGA intellectual property is rarely sold on a standalone basis, and as such, management is required to estimate the standalone selling price related to each performance obligation.

Management uses a variety of methods to determine the standalone selling price of each performance obligation, including an adjusted market assessment approach, residual approach or the expected cost plus a margin approach, depending on the characteristics and context of the deliverables.

We have identified the determination of the standalone selling price as a critical audit matter.

Auditing this element of revenue recognition involved especially challenging auditor judgment in the determination of distinct performance obligations and an increased extent of auditor effort due to;

(i) the existence of and variability in the termination for convenience clause within the contract including the enforceable right to payment for performance completed to date and (ii) consideration of the alternative use of the asset.

Evaluating management's significant accounting policies related to these customer agreements for reasonableness.

Evaluating the appropriateness of management's evaluation of various terms and conditions in revenue contracts by:

(i) the use of significant management judgment in determining the standalone selling price when observable inputs are not readily available and (ii) the inherent, unique nature of each performance obligation within each professional service contract.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to determination of the standalone selling price of professional services contracts, and the associated assumptions that the Company identified, included the following, among others:

Evaluating the internal controls related to the Company’s review and application of the revenue recognition guidance and determining if those controls were designed and implemented appropriately.

Evaluating the appropriateness of management's methodology used to determine the standalone selling price for a sample of contracts including:

Obtaining and reading contract source documents, including master agreements, and other related documents.

Assessing the terms of the contracts and evaluating the appropriateness of management's application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions.

Testing management's identification and treatment of contract terms, including evaluating termination for convenience clauses and enforceable right to payment for performance completed to date, and assessing the evidence of alternative use for the contract asset.

Evaluating when the customer obtained control of each performance obligation and the timing of revenue recognized either over time or at a point in time.

Assessing the appropriateness of the timing of revenue recognition for a sample of revenue contracts through:

Testing the mathematical accuracy of management's calculations of revenue and the associated timing of revenue recognized in the financial statements.

/s/ Moss Adams LLP

Assessing management’s application of the methodology based on the relevant guidance under Accounting Standards Codification 606, Revenue from Contracts with Customers .

• Evaluating the appropriateness of management’s determination of the standalone selling price, including:

Assessing assumptions utilized by management in determining the standalone selling price when comparative information is not readily observable.

• Corroborating management’s assumptions through review of similar contracts when available and applicable depending on the nature of the contract.

• Performing inquiries with individuals outside of the accounting department to corroborate management’s assertions and assumptions and performing sensitivity analysis to unobservable inputs.

• Testing the application of management’s methodology to each selected professional services contract.

• Testing the mathematical accuracy of management’s calculations of the standalone selling price of a selection of professional services contracts.

/s/ Frank, Rimerman + Co.

We have served as the Company's auditor since 2024.

San Francisco, California

March 25, 2025

We have served as the Company’s auditor since 2016.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

QuickLogic Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of QuickLogic Corporation (the “Company”) as of December 31, 2023, the related consolidated statements of operations, stockholders’ equity, and cash flows for the years ended December 31, 2023 and January 1, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the consolidated results of its operations and its cash flows for the years ended December 31, 2023 and January 1, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ Moss Adams LLP

San Francisco, California

March 26, 2024, except for Note 14 to the consolidated financial statements, as to which the date is March 25, 2025.

We served as the Company’s auditor from 2016 to 2024.

QUICKLOGIC CORPORATION

CONSOLIDATED BALANCE SHEETS

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$ 21,880 $ 24,606

Accounts receivable, net of allowances for doubtful accounts of $ 34 and $ 18 , as of December 31, 2023 and January 1, 2023, respectively

Accounts receivable, net of allowances for credit losses of $ 30 and $ 34 , as of December 29, 2024 and December 31, 2023, respectively

Contract assets

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Non-marketable equity investment

Inventories, non-current

Note receivable, non-current

$ 51,933 $ 47,792

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200,000 shares authorized;

14,118 and 13,202 shares issued and outstanding as of December 31, 2023 and January 1, 2023, respectively

15,336 and 14,118 shares issued and outstanding as of December 29, 2024 and December 31, 2023, respectively

Additional paid-in capital

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Statements of Operations:

$ 20,112 $ 21,198 $ 16,180

Cost of revenue

8,226 6,711 7,378

11,886 14,487 8,802

Operating expenses:

Research and development

6,544 6,448 5,001

Selling, general and administrative

8,773 7,969 7,601

Operating income (loss)

( 3,431 ) 70 ( 3,800 )

Interest expense

Gain on forgiveness of PPP Loan

( 406 ) ( 215 ) ( 148 )

Interest income and other (expense) income, net

( 1 ) ( 116 ) ( 221 )

Income (loss) before income taxes

( 3,838 ) ( 261 ) ( 4,169 )

Provision for income taxes

Net income (loss)

$ ( 3,841 ) $ ( 263 ) $ ( 4,267 )

Net income (loss) per share:

Basic and diluted

$ ( 0.26 ) $ ( 0.02 ) $ ( 0.34 )

Weighted average shares:

Basic and diluted

Net income (loss) equals comprehensive income (loss) for all years presented.

14,510 13,453 12,588

Net income (loss) equals total comprehensive income (loss) for all years presented.

The accompanying notes form an integral part of these Consolidated Financial Statements.

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Net income (loss)

$ ( 3,841 ) $ ( 263 ) $ ( 4,267 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

3,613 1,807 1,147

ROU asset amortization

Stock-based compensation

4,606 2,522 2,035

Write-down of inventories

Gain on forgiveness of PPP Loan

( 4 ) 16 ( 9 )

Changes in operating assets and liabilities:

Accounts receivable

( 807 ) 1,048 ( 1,708 )

Contract assets

927 (1,622 ) (1,692 )

289 ( 142 ) ( 639 )

596 ( 958 ) ( 220 )

Trade payables

( 3,601 ) 91 1,455

Accrued liabilities

( 1,081 ) 1,003 ( 156 )

Deferred revenue

( 598 ) 780 ( 183 )

Lease liabilities

( 298 ) ( 389 ) ( 366 )

Other long-term liabilities

( 125 ) — ( 22 )

Net cash provided by (used in) operating activities

27 4,847 ( 4,056 )

Cash flows provided by (used in) investing activities:

Capital expenditures for property and equipment

( 5,404 ) ( 5,467 ) ( 142 )

Capitalized internal-use software

( 967 ) ( 872 ) ( 672 )

Purchases of intangible assets

Net cash provided by (used in) investing activities

( 6,465 ) ( 6,339 ) ( 814 )

Cash flows provided by (used in) financing activities:

Payment of notes payable

( 1,384 ) ( 701 ) ( 452 )

Proceeds from notes payable

Proceeds from line of credit

78,000 65,000 60,000

Repayment of line of credit

( 80,000 ) ( 60,000 ) ( 60,000 )

Proceeds from issuance of common stock

Proceeds from issuance of common stock to investors

6,810 2,313 4,682

Stock issuance costs

Taxes paid related to net settlement of equity awards

( 24 ) ( 20 ) ( 17 )

Net cash provided by (used in) financing activities

3,712 6,897 4,466

Net increase (decrease) in cash, cash equivalents and restricted cash

( 2,726 ) 5,405 ( 404 )

Cash, cash equivalents and restricted cash at the beginning of the period

24,606 19,201 19,605

Cash, cash equivalents, and restricted cash at the end of the period

$ 21,880 $ 24,606 $ 19,201

Supplemental disclosures of cash flow information:

Interest paid

$ 344 $ 81 $ 86

Income taxes paid

$ 33 $ 14 $ 16

Supplemental schedule of non-cash investing and financing activities:

Purchases of property and equipment with financing arrangements

Purchases of assets with financing arrangements

$ 3,107 $ 1,116 $ 650

Stock-based compensation capitalized as internal-use software

Purchases of property and equipment in accounts payable

$ 149 $ 248 $ —

Stock-based compensation capitalized as tooling and fixed assets

Purchases of property and equipment in accounts payable and accrued liabilities

$ 2,041 $ 2,101 $ 1

The accompanying notes form an integral part of these Consolidated Financial Statements.

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542 — 253 — 253

Common stock offering, net of issuance costs of $ 45 thousand

Common stock offering, net of issuance costs

797 1 4,664 — 4,665

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— — — ( 263 ) ( 263 )

Balance at January 1, 2023

Balance at December 31, 2023

14,118 14 322,436 ( 305,555 ) 16,895

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The Analytics Toolkit from SensiML Corporation ("SensiML"), the Company's wholly-owned subsidiary, provides an end-to-end Artificial Intelligence / Machine Learning solution with accurate sensor algorithms using AI technology.

The full range of platforms, software tools, and eFPGA IP enables the practical and efficient adoption of AI, voice, and sensor processing across Aerospace, and Defense, Consumer/Industrial IoT, and Consumer Electronics markets.

The full range of products, software tools, and eFPGA IP enables the practical and efficient programmability for the Company's customers across Aerospace, and Defense, Consumer/Industrial IoT, and Consumer Electronics markets.

QuickLogic’s Fiscal Year ends on the Sunday closest to December 31.

Fiscal Years 2023 , 2022 , and 2021 ended on December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

The Company has one reportable business segment based on how its Chief Operating Decision Maker (CODM) manages the business and in a manner consistent with the internal reporting provided to the CODM.

The CODM, the Company's Chief Executive Officer (CEO), reviews detailed income statements, balance sheets, and sales reports in order to assess performance of the Company.

Sales and operating income are some of the key variables monitored by the CODM and management when determining the Company's financial condition and operating performance.

Fiscal Years 2024 , 2023 , and 2022 ended on December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

The Company has financed its operations and capital investments through the sale of common stock, financing arrangements, operating leases, a revolving line of credit, and cash flows from operations.

As of December 31, 2023 , the Company’s principal sources of liquidity consisted of cash and cash equivalents of $ 24.6 million, inclusive of a $ 20 million advance from its Revolving Facility with Heritage Bank of Commerce ("Heritage Bank").

As of December 29, 2024 , the Company’s principal sources of liquidity consisted of cash and cash equivalents of $ 21.9 million, inclusive of an $ 18 million advance from its Revolving Facility with Heritage Bank of Commerce ("Heritage Bank").

The Company's principal contractual commitments include purchase obligations, re-payments of draw-downs from the revolving line of credit, and payments under operating and finance arrangements.

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See Note 7 for additional information.

On March 21, 2023 , the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of 450 thousand shares of its common stock, in a registered direct offering pursuant to an effective shelf registration statement on Form S- 3, resulting in net cash proceeds of approximately $ 2.3 million.

Issuance costs related to the offering were immaterial.

On September 14, 2022 and February 9, 2022 , the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of 487 thousand and 310 thousand shares of common stock, respectively, in registered direct offering direct offerings pursuant to an effective shelf registration statement on Form S- 3, resulting in net cash proceeds of approximately $ 3.2 million and $ 1.5 million, respectively.

Issuance costs related to the September 14, 2022 and the February 9, 2022 offerings were immaterial.

September 22, 2021 , the Company entered into a share subscription agreement for the sale of

125 thousand of its common stock.

September 30, 2021 , the Company entered into a common stock purchase agreement for the sale of

74 thousand shares of its common stock, in a registered direct offering pursuant to an effective shelf registration statement on Form S-

The net proceeds to the Company in aggregate, after deducting equity issuance costs of approximately

$ 45 thousand was approximately

December 5, 2024 , the Company entered into common stock purchase agreements with certain institutional investors and their affiliated entities for the sale of an aggregate of

424 thousand shares of common stock in a registered direct offering pursuant to an effective shelf registration statement on Form S-

3, resulting in net cash proceeds of approximately

$ 3.2 million.

11 for additional information.

Issuance costs of

$ 27 thousand related to the offering were

March 13, 2024 , the Company entered into common stock purchase agreements with certain institutional investors and their affiliated entities for the sale of an aggregate of

223 thousand shares of common stock in a registered direct offering

pursuant to an effective shelf registration statement on Form S- 3, resulting in net cash proceeds of approximately $ 3.5 million.

Issuance costs of $ 24 thousand related to the offering were immaterial.

On March 21, 2023, the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of 450 thousand shares of our common stock, in a registered direct offering pursuant to an effective shelf registration statement on Form S- 3, resulting in net cash proceeds of approximately $ 2.3 million.

Issuance costs related to the offering were immaterial.

September 14, 2022 and

February 9, 2022, the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of

487 thousand and

310 thousand shares of common stock, respectively, in registered direct offerings pursuant to an effective shelf registration statement on Form S-

3, resulting in net cash proceeds of approximately

$ 3.2 million and

$ 1.5 million, respectively.

Issuance costs related to the

September 14, 2022 and

February 9, 2022 offerings were immaterial.

The Company currently uses its cash to fund its working capital, to accelerate the development of next-generation products and for general corporate purposes.

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$ 6.8 million gross cash proceeds from the

March 21, 2023 financing, its revenues from operations, and the available financial resources from the Revolving Facility with Heritage Bank will be sufficient to fund its operations and capital expenditures and provide adequate working capital for the next

December 5, 2024 and

March 13, 2024 financings, its revenues from operations, and the available financial resources from the Revolving Facility with Heritage Bank will be sufficient to fund its operations and capital expenditures and provide adequate working capital for the next

twelve months.

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All intercompany accounts and transactions have been eliminated.

Certain prior period amounts and disclosures in the consolidated financial statements and accompanying notes have been reclassified or modified to conform to the current period's presentation.

Critical Accounting Policies and Use of Estimates

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The allowance for sales returns is based on a historical returns analysis of the prior four quarters that is performed on a quarterly basis.

Amounts recorded for hardware product sales returns were $ 8 thousand, $ 2 thousand and a sales return reversal of $ 13 thousand for the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively, on the Company's consolidated statements of operations.

Amounts recorded for hardware product sales returns were $ 1 thousand, $ 8 thousand, and $ 2 thousand for the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively, on the Company's consolidated statements of operations.

While hardware product sales returns have not been material to the Company in recent reporting periods, the Company notes there is an inherent uncertainty in estimating this allowance.

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In these judgments, the Company considers the context of the contract, historical experience with similar contracts, and the interdependency of the promised goods and services.

Additionally, judgment is required by management to allocation the transaction price to the separately identifiable performance obligations in the contract.

Additionally, judgment is required by management to allocate the transaction price to the separately identifiable performance obligations in the contract.

The Company allocates the transaction price of the contract to each performance obligation based on its relative SSP.

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As such, the Company is required to estimate the SSP for each performance obligation.

In instances where the SSP is not directly observable because the Company does not sell the promised goods or services separately, the Company typically determines the SSP using either the adjusted market assessment approach or the expected cost plus a margin approach, depending on the characteristics and context of the deliverable.

In instances where the SSP is not directly observable because the Company does not sell the promised goods or services separately, the Company typically determines the SSP using either the adjusted market assessment approach, residual approach, or the expected cost plus a margin approach, depending on the characteristics and context of the deliverable.

The selected method is applied by the Company consistently for similar arrangements and deliverables.

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Generally, the Company satisfies eFPGA-related contractual performance obligations over time as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as it performs, the Company's performance creates or enhances an asset that the customer controls as it is created or enhanced, or the Company’s performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.

When the Company satisfies performance obligations over time, it recognizes revenue by applying an over-time methodology that faithfully depicts the Company’s performance toward satisfaction of the performance obligation.

When the Company satisfies performance obligations over time, it recognizes revenue by applying an over-time methodology that depicts the Company’s performance toward satisfaction of the performance obligation.

The Company’s over-time methodologies include, but are not limited to the following:

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The Company also capitalizes costs related to internally used enterprise-level business and finance software in support of the Company’s operational needs as software.

Acquired intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited.

The Company reviews the recoverability of its long-lived assets annually and when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable.

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Subsequent to the Company's annual impairment testing in the fourth quarter of 2024 and 2023 , there were no indicators of impairment that gave cause for additional impairment testing of the Company’s long-lived assets.

Additionally, the Company did not recognize any gains or losses on the disposal of equipment in the year ended December 31, 2023 and recognized gains on disposal of equipment of $ 27 thousand in the year ended January 1, 2023 .

Acquired intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited.

The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable.

The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations.

If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value.

The measurement of impairment requires management to estimate future cash flows and the fair value of these assets.

In estimating future cash flows and the fair value of its intangible assets, the Company considers changes in legal factors and the business climate, product and technology obsolescence, and competition.

The Company performed an annual impairment assessment in the fourth quarter of 2023 and 2022 and deemed no impairment was necessary for the current or prior year.

Subsequent to the Company's annual impairment testing in the fourth quarter of 2023 and 2022, there were no indicators of impairment that gave cause for additional impairment testing of the Company’s intangible assets.

No impairment of intangible assets has been recognized to date.

Additionally, the Company did not recognize any gains or losses on the disposal of equipment in the years ended December 29, 2024 or December 31, 2023 .

NOTE 2 — OTHER RELEVANT ACCOUNTING POLICIES

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Restricted cash represents amounts pledged as cash security related to the use of credit cards.

Allowance for Doubtful Accounts

The Company estimates the amount of uncollectible accounts receivable at the end of each reporting period based on the aging of the receivable balance, current and historical customer trends, and communications with its customers.

Amounts are written off only after considerable collection efforts have been made and the amounts are determined to be uncollectible.

The Company provides an allowance for doubtful accounts based on both historical experience and a specific identification basis.

As of December 31, 2023 and January 1, 2023 , the allowance for doubtful accounts was $ 34 thousand and $ 18 thousand, respectively, in its consolidated balance sheets.

Bad debt expense for the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 was $ 24 thousand, $ 16 thousand, and $ 62 thousand, respectively.

Contract Balances

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The Company defers costs until related revenue is recognized.

The Company had contract asset s associated with eFPGA-related professional services revenue of approximately $ 3.6 million, $ 2.0 million, and $ 0.3 million and contract liabilities (reflected as deferred revenue) associated with eFPGA-related professional services revenue of $ 1.1 million, $ 0.3 million, and $ 0.5 million on the consolidated balance sheets at December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

The Company had contract asset s associated with eFPGA-related professional services revenue of approximately $ 2.7 million, $ 3.6 million, and $ 2.0 million and contract liabilities (reflected as deferred revenue) associated with eFPGA-related professional services revenue of $ 0.4 million, $ 1.1 million, and $ 0.3 million on the consolidated balance sheets at December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

Assets Recognized from Costs to Obtain a Contract with a Customer

The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year.

The Company has concluded that none of the costs it has incurred to obtain and fulfill its ASC 606 contracts during the years ended December 31, 2023 and January 1, 2023 met the capitalization criteria and as such, there are no costs deferred nor recognized as assets on the consolidated balance sheets at December 31, 2023 , and January 1, 2023 .

The Company has concluded that none of the costs it has incurred to obtain and fulfill its ASC 606 contracts during the years ended December 29, 2024 and December 31, 2023 met the capitalization criteria and as such, there are no costs deferred nor recognized as assets on the consolidated balance sheets at December 29, 2024 and December 31, 2023 .

Current Expected Credit Losses

The current expected credit loss ("CECL") reserve required under ASU 2016 - 13 "Financial Instruments - Credit Losses - Measurement of Credit Losses on Financial Instruments (Topic 326 )" ("ASU 2016 - 13" ), reflects the Company's current estimate of potential credit losses related to its financing receivables.

As of January 1, 2023, the Company's CECL reserve was $ 0 .

As of January 1, 2023 and December 31, 2023, the Company's CECL reserve was $0 .

Subsequent changes to the CECL reserve are recognized through a provision for or reversal of current expected credit loss reserve on the Company's consolidated statement of operations.

ASU 2016 - 13 specifies the reserve should be based on relevant information about past events, including historical loss experience, market conditions, and reasonable and supportable macroeconomic forecasts for the duration of each financing receivable.

For each financing receivable, the Company performs an annual quantitative assessment of the impact of CECL using a probability-of-default method.

For each financing receivable and contract asset, the Company performs an annual quantitative assessment of the impact of CECL using a probability-of-default method.

This includes estimating the probability that the loan will default before its maturity (probability of default) and the amount of the loss if the loan defaults (loss given default).

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The Company adjusts these factors for current conditions, including the financial condition of the borrower, the probability that it will grant the borrower a concession through modification of the loan terms, and reasonable and supportable forecasts of future losses as necessary.

Financing Arrangements & Correction of an Immaterial Error

The Company previously classified certain licensed tooling software as leased assets and liabilities under ROU assets and financing lease liabilities pursuant to lease accounting under ASC 842, Leases.

Upon further analysis, the Company determined these amounts are intangible assets subject to amortization in accordance with ASC 350, Intangibles, Goodwill, and Other and financed through financing arrangements.

As a result, the Company corrected immaterial errors to revise its financial statements as of January 1, 2023, to present $933 thousand as property and equipment, net instead of a right of use asset, and to present $887 thousand as notes payable instead of finance leases.

$616 thousand was incorporated into the Company's accumulated amortization for property and equipment balance as of January 1, 2023.

The statements of cash flows have been revised to present non-cash investing and financing activities of $ 650 thousand and $ 690 thousand for property and equipment purchased through financing arrangements during the fiscal years ended January 1, 2023 and January 2, 2022, respectively, previously presented as finance lease obligations.

Cash payments on notes payable during the fiscal years ended January 1, 2023 and January 2, 2022 were $ 452 thousand and $ 378 thousand, respectively, instead of presented as payments of finance lease obligations.

Refer to Note 7 for additional information.

The Company has determined the correction of this error did not have a material impact on the Company's financial statements for any of the periods presented.

For its trade accounts receivable, the Company estimates the current expected credit loss at the end of each reporting period based on the aging of the trade receivable balance, current and historical customer trends, and communications with its customers.

Amounts are written off only after considerable collection efforts have been made and the amounts are determined to be uncollectible.

The Company provides an allowance for credit losses for its trade accounts receivable based on both historical experience and a specific identification basis.

As of December 29, 2024 and December 31, 2023 , the allowance for credit losses was $ 30 thousand and $ 34 thousand, respectively, in its consolidated balance sheets.

Credit loss expense for the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 was $ 6 thousand, $ 24 thousand, and $ 16 thousand, respectively.

The Company accounts for leases under ASC 842 and related ASUs.

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Right-of-use ("ROU") assets and lease liabilities are recorded in the Company's consolidated balance sheet.

The Company determines if an arrangement is a lease at inception.

The Company determines if an arrangement is a lease at inception, including considering whether the Company has the right to obtain substantially all of the economic benefits from and direct the use of an identified asset for a period of time.

When an arrangement is a lease, the Company determines if it is an operating lease or a finance lease.

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non-lease components are generally accounted for separately.

The Company’s ROU assets were approximately $ 1 million and $ 0.5 million and lease liabilities were approximately $ 1.0 million and $ 0.5 million on the Company’s consolidated balance sheets at December 31, 2023 and January 1, 2023 , respectively.

The Company’s ROU assets were approximately $ 0.8 million and $ 1.0 million and lease liabilities were approximately $ 0.7 million and $ 1.0 million on the Company’s consolidated balance sheets at December 29, 2024 and December 31, 2023 , respectively.

See Note 8 for additional information.

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The non-marketable equity investment is classified as a non-current asset on the consolidated balance sheets.

There was no impairment assessed as of December 31, 2023 and January 1, 2023.

There was no impairment assessed as of December 29, 2024 and December 31, 2023 .

See Note 9 for additional information.

Variable Interest Entities

A variable interest entity (VIE) is a legal entity that 1 ) does not have sufficient equity at risk to finance its activities without additional subordinated financial support or 2 ) is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting or similar rights and/or do not substantively participate in the gains and losses of the entity.

Consolidation of a VIE by its primary beneficiary is not solely based on majority voting interest, but is based on whether the reporting entity has a controlling financial interest in the VIE.

To have a controlling financial interest, the reporting entity must have the power to direct the activities of a VIE that most significant impact the VIE's economic performance, as well as the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

When the Company enters into various arrangements with unaffiliated entities in the normal course of business, it assesses the entity to determine whether it qualifies as a VIE and if so, whether the Company is the primary beneficiary and should consolidate the entity.

These assessments include a review of the entity's capital structure, related contractual relationships and terms, nature of the entity’s operations and purpose, nature of the entity’s interests issued, and the Company's involvement with the entity, including the breadth of the Company's decision-making ability and its ability to influence activities that significantly affect the economic performance of the VIE.

As of December 29, 2024, the Company held one interest in a VIE;

its $ 0.3 million equity investment in an unaffiliated entity.

The VIE’s activities consist of the development and commercialization of certain semiconductor technology, which are financed primarily through investors.

The Company's involvement is that of a passive equity investor and creditor without any active involvement in the management or direction of the VIE’s activities.

The Company is not required to consolidate the VIE and accounts for it under ASC 321.

The Company’s maximum exposure is its $ 0.3 million equity investment in the VIE, as well as the $ 1.3 million note receivable with the VIE.

Refer to Note 9 for additional information.

Cost of Revenues

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These costs are primarily comprised of employee salary and benefits and other employee-related costs to perform work on revenue-generating contracts with customers, software tool utilization costs, and contract engineering costs.

At times, the Company reclassifies certain costs and expenses to better attribute usage of labor and resources to their functional utilization.

The Company allocated $ 4.8 million, $ 3.0 million, and $ 3.3 million of R&D expenses associated with the performance of its revenue contracts to costs of revenues in the 2024, 2023, and 2022 annual fiscal periods, respectively.

Hardware Product Warranty Costs

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The terms and conditions of sale generally do not allow for refunds or product returns other than for warranty repairs.

The Company does not have significant product warranty-related costs or liabilities for the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 .

The Company does not have significant product warranty-related costs or liabilities for the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 .

Foreign Currency Transactions

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Gains and losses from the foreign currency transactions of the Company's foreign operations are recorded as interest income and other (expense) income, net in the consolidated statements of operations.

The impact from foreign currencies was not significant for each of the Fiscal Years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 .

Operating expenses denominated in foreign currencies represented approximately 8 %, 12 %, and 14 % o f t otal operating expenses for the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

The Company incurred a majority of such foreign currency expenses in India, the United Kingdom, China, Taiwan, and Japan in the Fiscal Years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 .

The impact from foreign currencies was not significant for each of the Fiscal Years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 .

Operating expenses denominated in foreign currencies represented approximately 6 %, 8 %, and 12 % o f t otal operating expenses for the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

The Company incurred a majority of such foreign currency expenses in the United Kingdom, China, India, Taiwan, and Japan in the Fiscal Years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 .

The Company does not use derivative financial instruments to hedge its exposure to fluctuations in foreign currency and therefore, is susceptible to fluctuations in foreign exchange gains or losses in its results of operations in future reporting periods.

Advertising and promotion expenses are charged to “selling, general, and administrative” expense in the consolidated statements of operations as incurred.

Advertising and promotion expense s were $ 44 thousand, $ 40 thousand, and $ 47 thousand for the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

Advertising and promotion expense s were $ 73 thousand, $ 44 thousand, and $ 40 thousand for the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

Defined Contribution Post-Retirement Benefit Plans

In July 2024, the Company started an employer match program for its 401 (k) post-retirement benefit plan.

In the fiscal year ended December 29, 2024, the Company recognized $ 0.1 million in associated matching contribution expenses.

Stock-Based Compensation

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Accounting for Income Taxes

As part of the process of preparing the Company's financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates.

This process involves estimating the Company's actual current tax exposure together with assessing temporary differences resulting from different tax and accounting treatment of items, such as deferred revenue, allowance for doubtful accounts, the impact of equity awards, depreciation and amortization, and employee-related accruals.

These differences result in deferred tax assets and liabilities, which are included on the Company's balance sheets.

As part of the process of preparing the Company's consolidated financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates.

This process involves estimating the Company's actual current tax exposure together with assessing temporary differences resulting from different tax and accounting treatment of items, such as deferred revenue, allowance for credit losses, the impact of equity awards, depreciation and amortization, and employee-related accruals.

These differences result in deferred tax assets and liabilities, which are included on the Company's consolidated balance sheets.

The Company must then assess the likelihood that its deferred tax assets will be recovered from future taxable income.

To the extent the Company believes that recovery is not likely, it must establish a valuation allowance.

To the extent the Company establishes a valuation allowance or increases this allowance in a period, it must include an expense within the tax provision in the statements of operations.

To the extent the Company establishes a valuation allowance or increases this allowance in a period, it must include an expense within the tax provision in the consolidated statements of operations.

The Company accounts for uncertainty in income taxes using a two -step approach for recognizing and measuring uncertain tax positions.

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Comprehensive Income (Loss)

The net income (loss) in the consolidated statements of operations for each of the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 is the same as the consolidated comprehensive income (loss).

The net income (loss) in the consolidated statements of operations for each of the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 is the same as the consolidated comprehensive income (loss).

The Company has no reportable items for other comprehensive income ("OCI") under comprehensive income nor under accumulated other comprehensive income on its consolidated balance sheet.

Concentrations of Credit and Suppliers

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Acquisition-related expenses and acquisition-related restructuring costs are recognized in earnings in the period in which they are incurred.

Recent Accounting Standards Adopted

November 2023, the FASB issued ASU

Segment Reporting (Topic 280 ) Improvements to Disclosures About Reportable Segments to enhance disclosures about significant segment expenses, among other interim disclosure requirements.

For public entities, the amendments in this Update are effective for fiscal years beginning after

December 15, 2023, and interim periods beginning after

December 15, 2024.

Early adoption is permitted.

The Company adopted ASU

07 prospectively on

January 1, 2024 and it had

no material impact on the Company's consolidated financial statements or related disclosures.

Refer to Note

14 for additional information.

New Accounting Pronouncements Pending Adoption

In November 2024, the FASB issued 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ) to improve the disclosures about a public entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions.

For public entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this new guidance on its consolidated financial statements.

The adoption of ASU 2024 - 03 is not expected to have a significant impact on the Company's consolidated financial statements

In March 2024, the FASB issued ASU 2024 - 02, Codification Improvements - Amendments to Remove References to Concept Statements to remove references to its concept statements from the FASB Accounting Standards Codification .

For public entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted for any fiscal year or interim period for which financial statements have not yet been issued or made available for issuance.

The Company is currently evaluating the impact of this new guidance on its consolidated financial statements.

The adoption of ASU 2024 - 02 is not expected to have a significant impact on the Company's consolidated financial statements

In December 2023, the FASB issued ASU No.

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Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements or disclosures.

In November 2023, the FASB issued ASU No.

2023 - 07, Segment Reporting (Topic 280 ) Improvements to Disclosures About Reportable Segments to enhance disclosures about significant segment expenses, among other interim disclosure requirements.

For public entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024.

Early adoption is permitted.

The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements or disclosures.

In June 2022, the FASB issued ASU No.

2022 - 03, Fair Value Measurement (Topic 820 ) Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions to clarify the measurement of the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and requires disclosures related to these types of equity securities.

For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years.

Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance.

The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements or disclosures.

In August 2020, the FASB issued ASU No.

2020 - 06, Debt — Debt with Conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and Hedging — Contracts in Entity ’ s Own Equity (Subtopic 815 - 40 ):

Accounting for Convertible Instruments and Contracts in an Entity ’ s Own Equity , which address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity.

The amendments in this Update are effective for public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted, but no earlier than Fiscal Years beginning after December 15, 2020, including interim periods within those Fiscal Years.

The adoption of ASU No.

2020 - 06 is not expected to have an impact on the Company's consolidated financial statements or related disclosures.

NOTE 3 — NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share was computed by dividing net income (loss) available by the weighted average number of common shares outstanding during the period.

Diluted net income (loss) per share was computed using the weighted average number of common shares outstanding during the period plus potentially dilutive common shares outstanding during the period under the treasury stock method.

In computing diluted net income (loss) per share, the weighted average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options and warrants.

The Company is currently evaluating the impact of this new guidance on its consolidated financial statements.

The adoption of ASU 2023 - 09 is not expected to have a significant impact on the Company's consolidated financial statements

NOTE 3 — EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share was computed by dividing earnings (loss) available by the weighted average number of common shares outstanding during the period.

Diluted earnings (loss) per share was computed using the weighted average number of common shares outstanding during the period plus potentially dilutive common shares outstanding during the period under the treasury stock method.

In computing diluted earnings (loss) per share, the weighted average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options and warrants.

For periods in which the Company has reported a net loss, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders as dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

For periods in which the Company has reported a net income, diluted net income per share attributable to common stockholders is different from basic net income per share attributable to common stockholders as dilutive common shares would increase the amount of shares outstanding reduced by the amounts of treasury shares repurchased from the proceeds at the average market price for the period.

Approximately 0.7 million, 0.8 million, and 0.7 million shares associated with equity awards outstanding and the estimated number of shares to be purchased under the current offering period of the ESPP Plan were not included in the calculation of diluted net loss per share, as they were considered antidilutive due to the net loss the Company experienced in the years ended December 31, 2023 , January 1, 2023 and January 2, 2022 , respectively.

Warrants to purchase up to 0.4 million shares were issued in connection with the May 29, 2018 stock offering were also not included in the diluted loss per share calculation as they were also considered anti-dilutive due to the net loss the Company experienced in the years ended January 1, 2023 and January 2, 2022 .

For periods in which the Company has reported a net income, diluted earnings per share attributable to common stockholders is different from basic earnings per share attributable to common stockholders as dilutive common shares would increase the amount of shares outstanding reduced by the amounts of treasury shares repurchased from the proceeds at the average market price for the period.

Approximately 0.7 million, 0.7 million, and 0.8 million shares associated with equity awards outstanding and the estimated number of shares to be purchased under the current offering period of the ESPP Plan were not included in the calculation of diluted net loss per share, as they were considered antidilutive due to the net loss the Company experienced in the years ended December 29, 2024 , December 31, 2023 and January 1, 2023 , respectively.

These warrants expired unexercised on May 29, 2023 .

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$ 9,623 $ 10,503

Software tools

Furniture and fixtures

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$ 1,611 $ 2,673

The majority of the Company's deferred charges balance as of December 29, 2024 relates to the Company's software tools and related subscriptions.

The Company's deferred charges balance as of December 31, 2023 relates primarily to the Company's software subscriptions, as well as legal and revolving credit facility fee accruals.

The Company amortizes its deferred charges over their estimated useful lives using the straight-line method.

As of December 29, 2024 and December 31, 2023, work-in-process ("WIP") inventories, net consist primarily of $ 0.5 million and $ 0.5 million, respectively, of die wafers and $ 1.0 million and $ 1.1 million, respectively, of tested, unmarked devices held for sale, which are completed upon customer orders.

During its 2024 fiscal year, the Company reclassified certain of its work-in-process and finished goods inventory in the amount of $ 0.7 million and $ 28 thousand, respectively, from current to non-current to better reflect the business cycles of its certain customers for that family of inventory.

Additionally, in conduction of its annual excess and obsolete (E&O) inventory analysis, the Company determined that none of said work-in-process inventory was subject to a reserve.

The Company capitalized $ 7.27 million in pre-production design and development costs as tooling to be utilized under its long-term professional services contracts for the fiscal year ended December 29, 2024 .

The capitalized assets recognized in the period are owned by the Company.

No pre-production design and development costs were capitalized in the fiscal year ended January 1, 2023.

The Company recorded depreciation and amortization expense of $ 1.8 million, $ 1.1 million, and $ 1 million for the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively .

$ 7.09 million in pre-production design and development costs were capitalized in the fiscal year ended December 31, 2023 .

The Company recorded depreciation and amortization expense of $ 3.6 million, $ 1.8 million, and $ 1.1 million for the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively .

No interest was capitalized for any period presented.

D epreciation and amortization expense included approximately $ 0.6 million, $ 0.4 million, and $ 0.3 million in amortization expense of capitalized internal-use software for the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

Accounts receivable, net of allowances for doubtful accounts of $ 0.1 million, was $ 1.0 million as of January 2, 2022 .

D epreciation and amortization expense included approximately $ 0.7 million, $ 0.6 million, and $ 0.4 million in amortization expense of capitalized internal-use software for the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

Accounts receivable, net of allowances for credit losses of $ 18 thousand, was $ 2.7 million as of January 1, 2023 .

NOTE 5 - — PROPERTY, PLANT, AND EQUIPMENT

23 unchanged sentences

$ 1,156 $ ( 726 ) $ 430

The following table provides the details of the carrying value of intangible assets recorded from the 2019 acquisition of SensiML at January 1, 2023 (in thousands):

January 1, 2023

The following table provides the details of the carrying value of intangible assets recorded from the 2019 acquisition of SensiML at December 31, 2023 (in thousands):

December 31, 2023

Remaining Useful Life

10 unchanged sentences

$ 1,156 $ ( 619 ) $ 537

The following table provides the details of future annual amortization of intangible assets, based upon the current useful lives at December 31, 2023 (in thousands):

The following table provides the details of future annual amortization of SensiML intangible assets, based upon the current useful lives at December 29, 2024 (in thousands):

Annual Fiscal Years

In the fiscal year ended December 29, 2024, the Company capitalized $ 385 thousand in litigation costs related to the Company's successful defense of its patents in a lawsuit.

The following table provides the details of the carrying value of the related intangible asset at December 31, 2023 (in thousands):

December 29, 2024

Remaining Useful Life

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Capitalized patent litigation costs

9 $ 418 $ ( 39 ) $ 378

Total intangible assets related to patents

$ 418 $ ( 39 ) $ 378

The following table provides the details of future annual amortization of intangible assets related to our patents, based upon the current useful lives at December 29, 2024 (in thousands):

Annual Fiscal Years

NOTE 7 — DEBT OBLIGATIONS

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one half of one percentage point ( 0.50 %) above the prime rate .

December 31, 2023 , the Company had a

December 29, 2024 , the Company had an

$ 18 million outstanding balance on the Revolving Facility with an interest rate of

January 1, 2023 , the Company had a

December 31, 2023 , the Company had a

$ 20 million outstanding balance on the Revolving Facility with an interest rate of

The Company was in compliance with all loan covenants under the Loan Agreement, as of the end of the current reporting period.

Additionally, the Company fully expects to renew the Revolving Facility prior to its maturity date of

December 31, 2025.

Heritage Bank has a

first -priority security interest in substantially all of the Company’s tangible and intangible assets to secure any outstanding amounts under the Loan Agreement.

Paycheck Protection Program Loan

On May 6, 2020, the Company entered into a loan agreement with Heritage Bank (“PPP Loan”) for a loan of $ 1.2 million pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") as implemented by the U.S.

Small Business Administration and enacted on March 27, 2020.

The PPP Loan was evidenced by a promissory note (“Note”) dated May 6, 2020, maturing two years from the disbursement date.

The Note bore interest at a rate of 1.00 % per annum, with the first six months of interest deferred.

Principal and interest were payable monthly commencing six months after the disbursement date.

Principal and interest were allowed to be prepaid by the Company at any time prior to maturity with no prepayment penalties.

The Note contained customary events of default relating to, among other things, payment defaults or breaches of the terms of the Note.

Upon the occurrence of an event of default, the lender may require immediate repayment of all amounts outstanding under the Note.

The Company applied for loan forgiveness in the fourth quarter of fiscal 2020, in accordance with the terms under the CARES Act.

On January 26, 2021, the Company received a notice from Heritage Bank that amounts under the PPP Loan had been forgiven.

The Company recorded the loan forgiveness under gain on forgiveness of PPP Loan on its consolidated statement of operations in the year ended January 2, 2022.

Financing Arrangements

The Company previously classified certain licensed tooling software as leased assets and liabilities under ROU assets and financing lease liabilities.

Upon further analysis, the Company determined it is more appropriate to classify these amounts as financing arrangements.

The amount of fixed assets, net purchased through financing arrangements on the balance sheet were $ 1.4 million and $ 0.9 million as of December 31, 2023 and January 1, 2023, respectively.

The corresponding note payable amount for these financing arrangements was $ 1.4 million and $ 0.9 million as of December 31, 2023 and January 1, 2023, respectively.

Payments related to financing arrangements were $ 0.7 million, $ 0.5 million, and $ 0.4 million for the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

The amount of net assets purchased through financing arrangements on the consolidated balance sheets were $ 3.3 million and $ 1.4 million as of December 29, 2024 and December 31, 2023 , respectively.

The corresponding note payable amount for these financing arrangements was $ 3.1 million and $ 1.4 million as of December 29, 2024 and December 31, 2023 , respectively.

Payments related to financing arrangements were $ 1.4 million, $ 0.7 million, and $ 0.5 million for the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

The Company's outstanding financing arrangements as of December 29, 2024 have remaining terms of 0.64 years to 2.32 years, with a weighted average remaining term of 1.68 years.

Stated interest rates for its financing arrangements outstanding as of December 31, 2023 range from 3.75 % to 9.89 %, with a weighted average interest rate of 8.34 %.

The Company's outstanding financing arrangements as of January 1, 2023 had remaining terms of 1.67 years to 2.01 years, with a weighted average remaining term of 1.91 years.

Stated interest rates for its financing arrangements outstanding as of January 1, 2023 ranged from 3.75 % to 6.75 %, with a weighted average interest rate of 5.95 %.

Amounts due to be paid in Fiscal Years 2024 and 2025 are $ 1.0 million and $ 0.5 million, respectively, less amounts representing interest of $ 0.1 million results in the total notes payable amount of $ 1.4 million.

Stated and imputed interest rates for its financing arrangements outstanding as of December 29, 2024 range from 8.00 % to 9.89 %, with a weighted average interest rate of 8.88 %.

The Company's outstanding financing arrangements as of December 31, 2023 had remaining terms of 0.91 years to 2.25 years, with a weighted average remaining term of 1.81 years.

Stated and imputed interest rates for its financing arrangements outstanding as of December 31, 2023 ranged from 3.75 % to 9.89 %, with a weighted average interest rate of 8.34 %.

Amounts due to be paid in Fiscal Years 2025 , 2026, and 2027 are $ 2.1 million, $ 1.0 million, and $ 0.3 million, respectively, less amounts representing interest of $ 0.3 million results in the total notes payable amount of $ 3.1 million.

NOTE 8 — LEASES

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The Company's corporate facility is located at 2220 Lundy Avenue, San Jose, California, 95131, where the Company occupies approximately 24,164 square feet of space.

The original five -year lease was entered into in February 2019 and on October 24, 2023, was extended to April 14, 2027 under similar terms.

The original five -year lease was entered into in February 2019 and has since been extended to June 14, 2027 under similar terms.

Upon expiration, the Company has the ability to extend the term of the lease for an additional period of five years at a base rent equal to the prevailing market rent rate.

Due to the Company's uncertainty in renewing the lease upon expiration, the option to renew is not included within the Company's measurement of the related ROU asset and operating lease liability.

The Company's SensiML subsidiary in Beaverton, Oregon occupies approximately 925 square feet of space.

2 unchanged sentences

The sales offices are rented under short-term leases.

Total rent expense was approximately $ 0.4 million for each of the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

Total rent expense was approximately $ 0.4 million for each of the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

The following table provides the activity related to operating leases (in thousands):

December 29, 2024

January 1, 2023

December 31, 2023

Operating lease costs:

3 unchanged sentences

December 29, 2024

January 1, 2023

December 31, 2023

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows used for operating leases

Non-cash ROU assets related to operating leases included in the operating cash flows for the fiscal year ended December 31, 2023 and January 1, 2023 were $ 348 thousand and $ 345 thousand, respectively.

Non-cash ROU assets related to operating leases included in the operating cash flows for the fiscal year ended December 29, 2024 and December 31, 2023 were $ 269 thousand and $ 348 thousand, respectively.

The following table provides the details of ROU assets and lease liabilities (in thousands):

December 29, 2024

January 1, 2023

December 31, 2023

Right-of-use assets:

13 unchanged sentences

NOTE 9 — FAIR VALUE MEASUREMENTS

The Company's cash, cash equivalents and restricted cash balances were $ 24.6 million and $ 19.2 million, including amounts in money market funds, as of December 31, 2023 and January 1, 2023 , respectively.

The money market funds are collateral for the company's credit card debt and had a balance of $ 0.1 million at December 31, 2023 and January 1, 2023 .

The Company's cash, cash equivalents and restricted cash balances were $ 21.9 million and $ 24.6 million, including amounts in money market funds, as of December 29, 2024 and December 31, 2023 , respectively.

The money market funds are collateral for the company's credit card debt and had a balance of $ 0.1 million at December 29, 2024 and December 31, 2023 .

Interest in these funds is earned at a 0.01 % annual percentage rate ( "APR").

Due to the short-term nature of the money market funds, the Company believes that carrying value approximates fair value.

On April 28, 2023 , the Company converted accounts receivable for a customer in the amount of approximately $ 1.16 million to notes receivable (the "Note").

At the time, the Note bore an interest rate of 3.0 % compounded monthly.

On June 28, 2023 , the Company cancelled the original note and entered into a revised promissory note with the customer, where the interest rate changed to 4.69 % compounded monthly, or a 4.8 % effective annual interest rate, accruing from the date of the prior note.

If not prepaid prior to the Note maturity date of June 28, 2024 , the principal and all accrued and unpaid interest will be due and payable to the Company.

On April 28, 2023, the Company converted accounts receivable for a customer in the amount of approximately $ 1.16 million to notes receivable (the "Original Note").

At the time, the Original Note bore an interest rate of 3.0 % compounded monthly.

On June 28, 2023, the Company cancelled the Original Note and entered into a revised promissory note ("Second Revised Note") with the customer, where the interest rate changed to 4.69 % compounded monthly, or a 4.8 % effective annual interest rate, accruing from the date of the Original Note.

On June 27, 2024, the Company cancelled the Second Revised Note and entered into a revised promissory note ("Current Note") with the customer, where the interest rate changed to 10.0 % per annum.

Accrued but unpaid interest will be compounded monthly, accruing from the date of the Current Note.

Additionally, if not prepaid prior to the Current Note maturity date of the earlier of (i) 24 months from June 28, 2024 or (ii) the closing of the customer's Series B financing, the principal and all accrued and unpaid interest will be due and payable to the Company.

If an event of default occurs, the interest rate will increase to 15.31 %.

All other terms of the note remained the same.

All other terms of the Original Note remained the same.

As of December 29, 2024, the related note receivable balance was $ 1.29 million, including $ 129 thousand in accrued interest.

The Company evaluated the note receivable under the current expected credit loss ("CECL") model, which requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

1 unchanged sentence

The Company utilized the probability-of-default method to determine the current expected credit loss for the note receivable.

The probability-of-default method represents the likelihood that a receivable that has reached the point of default will not be collected in full.

The Company updates its loss rate and factors annually to incorporate the most recent historical data and qualitative factors, including knowledge of industry and technological trends and understanding of the customer's business and history as a start-up entity.

Additionally, these factors may include forward-looking information.

Using this method, the Company measured the current expected credit loss associated with the note receivable to be de minimis as of December 29, 2024 .

29 unchanged sentences

Subsequent to the valuation date and through

January 1, 2023 , there were

no observable indicators of impairment for the non-marketable equity investment.

December 31, 2023, there were

no observable price changes or indicators of impairment for the non-marketable equity investment.

During Fiscal

2024 , there were

no observable indicators of impairment for the non-marketable equity investment.

no observable price changes or indicators of impairment for the non-marketable equity investment.

no change to the carrying value of the non-marketable equity investment of

1 unchanged sentence

December 29, 2024 and

January 1, 2023 .

December 31, 2023 .

NOTE 10 — INCOME TAXES

The components of loss before provision of income taxes and the components for the provision for income taxes are as follows (in thousands):

The following table presents the U.S.

and foreign components of consolidated income (loss) before income taxes and the provision for (benefit from) income taxes (in thousands):

Income (loss) before income taxes:

4 unchanged sentences

Provision for income taxes:

Provision for income taxes

( 20 ) ( 6 ) 36

The difference between income taxes computed at the statutory federal income tax rate and the provision for income taxes is attributable to the following (in thousands):

Provision for income taxes

The following table presents the rate reconciliation between income tax provisions at the U.S.

federal statutory rate and the effective rate reflected in the consolidated statements of operations (in thousands):

Income tax benefit at statutory rate

$ ( 806 ) 21.0 % $ ( 55 ) 21.0 % $ ( 876 ) 21.0 %

( 2 ) 0.1 % 9 - 3.4 % 3 - 0.1 %

Foreign taxes

17 - 0.4 % — - 0.1 % 106 - 2.5 %

Stock compensation and other permanent differences

8 - 0.2 % ( 740 ) 282.9 % 21 - 0.5 %

PPP loan forgiveness

147 - 3.8 % — 0.0 % — 0.0 %

R&D tax credits

12 unchanged sentences

The Company believes it is more likely than not it will be able to realize its foreign deferred tax assets.

Significant components of the Company's deferred tax balances are as follows (in thousands):

December 31, 2023 January 1, 2023

Deferred tax balances are comprised of the following (in thousands):

December 29, 2024 December 31, 2023

Deferred tax assets:

54 unchanged sentences

Lapse of statutes of limitations

— ( 54 ) ( 178 )

Ending balance of unrecognized tax benefits

1 unchanged sentence

Out of $ 2.7 million of unrecognized tax benefits, there are no unrecognized tax benefits that would result in a change in the Company's effective tax rate if recognized in future years.

The accrued interest and penalties related to uncertain tax positions was not significant as of December 31, 2023 , January 1, 2023 , and January 2, 2022 .

The accrued interest and penalties related to uncertain tax positions was not significant as of December 29, 2024 , December 31, 2023 , and January 1, 2023 .

The Company is not currently under tax examination in the U.S.

5 unchanged sentences

tax years from 2005 forward remain effectively open to examination due to the carryover of unused net operating losses and tax credits.

Significant components of the Company's income taxes paid are as follows (in thousands):

State and local

Other foreign jurisdictions

Total income taxes paid

$ 33 $ 14 $ 16

NOTE 11 — STOCKHOLDERS’ EQUITY

3 unchanged sentences

Issuance of Common Stock

On December 5, 2024 , the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of 424 thousand shares of its common stock, in a registered direct offering pursuant to an effective shelf registration statement on Form S- 3, resulting in net cash proceeds of approximately $ 3.2 million.

Issuance costs of $ 27 thousand related to the offering were immaterial.

The purchase price for each share of common stock in the December 2024 offering was $ 7.67 .

March 13, 2024 , the Company entered into common stock purchase agreements with certain institutional investors and their affiliated entities for the sale of an aggregate of

223 thousand shares of common stock in a registered direct offering

pursuant to an effective shelf registration statement on Form S- 3, resulting in net cash proceeds of approximately $ 3.5 million.

Issuance costs of $ 24 thousand related to the offering were immaterial.

The purchase price for each share of common stock in the March 2024 offering was $ 16.00 .

On March 21, 2023, the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of 450 thousand shares of its common stock, in a registered direct offering pursuant to an effective shelf registration statement on Form S- 3, resulting in net cash proceeds of approximately $ 2.3 million.

Issuance costs related to the offering were immaterial.

The purchase price for each share of common stock in the Share Placement was $ 5.14 .

September 14, 2022 and

February 9, 2022 , the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of

487 thousand and

310 thousand shares of common stock, respectively, in registered direct offering direct offerings pursuant to an effective shelf registration statement on Form S-

3, resulting in net cash proceeds of approximately

$ 3.2 million and

$ 1.5 million, respectively.

Issuance costs related to the

September 14, 2022 and the

February 9, 2022 offerings were

The purchase price for each share of common stock in the

September 14, 2022 and

February 9, 2022 placements were

$ 4.78 , respectively.

August 17, 2022, the Company filed a new Registration Statement on Form S-

3 with the SEC to replace a previously expired Registration on Form S-

3, under which the Company

may sell, from time-to-time common stock, preferred stock, depositary shares, warrants, debt securities, and units, individually or as units comprised of

one or more of the other securities or a combination thereof.

The Company's registration statement became effective on

August 26, 2022.

September 22, 2021 , the Company entered into a share subscription agreement for the sale of

125 thousand shares of its common stock.

September 30, 2021 , the Company entered into a common stock purchase agreement for the sale of

74 thousand shares of its common stock, in a registered direct offering pursuant to an effective shelf registration statement on Form S-

The net proceeds to the Company in aggregate, after deducting equity issuance costs of approximately

$ 45 thousand was approximately

$ 1.0 million.

The purchase price for each share of common stock in the Share Placements was

At January 2, 2023 , warrants exercisable for

The purchase price for each share of common stock in the March 2023 offering was $ 5.14 .

On September 14, 2022 and February 9, 2022, the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of 487 thousand and 310 thousand shares of common stock, respectively, in registered direct offering direct offerings pursuant to an effective shelf registration statement on Form S- 3, resulting in net cash proceeds of approximately $ 3.2 million and $ 1.5 million, respectively.

Issuance costs related to the September 14, 2022 and the February 9, 2022 offerings were immaterial.

The purchase price for each share of common stock in the September 14, 2022 and February 9, 2022 offerings were $ 6.57 and $ 4.78 , respectively.

On August 17, 2022, the Company filed a new Registration Statement on Form S- 3 with the SEC to replace a previously expired Registration on Form S- 3, under which the Company may sell, from time-to-time common stock, preferred stock, depositary shares, warrants, debt securities, and units, individually or as units comprised of one or more of the other securities or a combination thereof.

The Company's registration statement became effective on August 26, 2022.

Warrants exercisable for

386 thousand shares of common stock at an exercise price of

per share remained outstanding.

These warrants were issued on

per share were issued on

May 29, 2018 and were exercisable any time for a period of

The warrants expired unexercised on

These warrants expired unexercised on

May 29, 2023 .

4 unchanged sentences

On April 24, 2019, the Company’s Board of Directors and shareholders approved the QuickLogic Corporation 2019 Stock Plan ( "2019 Stock Plan").

The 2019 Stock Plan was extended ten years through March 15, 2028.

Under the 2019 Stock Plan, 357 thousand shares of common stock were available for grants, plus any shares subject to any outstanding options or other awards granted under the 2009 Stock Plan that expire, are forfeited, cancelled, returned to the Company for failure to satisfy vesting requirements, settled for cash, or otherwise terminated without payment being made thereunder.

The 2019 Stock Plan was extended ten years through April 24, 2029.

Under the 2019 Stock Plan, 5.0 million shares of common stock were available for grants, plus any shares subject to any outstanding options or other awards granted under the 2009 Stock Plan that expire, are forfeited, cancelled, returned to the Company for failure to satisfy vesting requirements, settled for cash, or otherwise terminated without payment being made thereunder.

On December 23, 2019, the Company filed a Certificate of Amendment to the Company's Amended and Restated Certificate of Incorporate with the Secretary State of Delaware to effect a 1 -for- 14 reverse stock split ("Reverse Stock Split") became effective on December 23, 2019.

As such, 357 thousand shares of common stock were now authorized for grants under the 2019 Stock Plan, plus any shares subject to any outstanding options or other awards granted under the 2009 Stock Plan that expire, are forfeited, cancelled, returned to the Company for failure to satisfy vesting requirements, settled for cash, or otherwise terminated without payment being made thereunder.

The Company's Board of Directors approved and on April 22, 2020, stockholders subsequently ratified an increase in the total number of shares available for future awards under the 2019 Stock Plan.

The approved increase in the total number of shares available for future awards was 550 thousand shares, for an overall authorized amount of 907 thousand shares, plus any shares subject to any outstanding options or other awards granted under the Company's 2009 Stock Plan that are terminated, canceled, surrendered, or forfeited as of April 22, 2020.

On April 28, 2020, the Company filed a Registration Statement on Form S- 8 with the Securities and Exchange Commission to register an additional 550 thousand shares of its common stock that may be issued under the Company’s 2019 Stock Plan.

The Company's Board of Directors approved and on May 12, 2021, stockholders subsequently ratified an increase in the total number of shares available for future awards under the 2019 Stock Plan.

The increase in the total number of shares available for future awards consisted of the sum of ( 1 ) 900 thousand, ( 2 ) 522 thousand shares which were available for future awards under the plan immediately before such approval, and ( 3 ) any shares subject to outstanding awards under the 2019 Stock Plan or the 2009 Stock Plan, that are terminated, canceled, surrendered, or forfeited as of May 10, 2022.

On May 19, 2022, the Company filed a Registration Statement on Form S- 8 with the Securities and Exchange Commission to register an additional nine hundred thousand shares of its common stock that may be issued under the Company’s 2019 Stock Plan.

The approved increase in the total number of shares available for future awards was 600 thousand shares, for an overall authorized amount of 1.5 million shares, plus any shares subject to any outstanding options or other awards granted under the Company's 2009 Stock Plan that are terminated, canceled, surrendered, or forfeited as of May 12, 2021.

On May 19, 2021, the Company filed a Registration Statement on Form S- 8 with the Securities and Exchange Commission to register an additional 600 thousand shares of its common stock that may be issued under the Company’s 2019 Stock Plan.

The Company's Board of Directors approved and on May 10, 2022, stockholders subsequently ratified an increase in the total number of shares available for future awards under the 2019 Stock Plan.

The approved increase in the total number of shares available for future awards was 900 thousand shares, for an overall authorized amount of 2.4 million shares, plus any shares subject to any outstanding options or other awards granted under the Company's 2009 Stock Plan that are terminated, canceled, surrendered, or forfeited as of May 10, 2022.

On May 19, 2022, the Company filed a Registration Statement on Form S- 8 with the Securities and Exchange Commission to register an additional 900 thousand shares of its common stock that may be issued under the Company’s 2019 Stock Plan.

As of December 29, 2024 , approximate ly 65 thousand shares of t he Company’s common stock were reserved for issuance under the 2019 Stock Plan.

2 unchanged sentences

The Company may implement different vesting schedules in the future with respect to any new equity awards.

2009 ESPP Stock Plan

The QuickLogic Corporation 2009 Employee Stock Purchase Plan ( "2009 ESPP Stock Plan"), as amended on March 6, 2019, was adopted in March 2009.

The 2009 ESPP Stock Plan extends ten years until March 5, 2029 and provides for six -month offering periods.

2009 Employee Stock Purchase Plan

The 2009 Employee Stock Purchase Plan, or 2009 ESPP, was adopted in March 2009 and subsequently approved by the Company's stockholders on April 22, 2009.

Under the 2009 ESPP, 2.3 million shares were reserved for issuance.

The 2009 ESPP originally extended for ten years until March 6, 2019 and provides for six -month offering periods.

Participants purchase shares through payroll deductions of up t o 20 % of an employee’s total compensation (maximum of 20,000 shares per offering period).

The 2009 ESPP Stock Plan permits the Board of Directors to determine, prior to each offering period, whether participants purchase shares at:

The 2009 ESPP permits the Board of Directors to determine, prior to each offering period, whether participants purchase shares at:

(i) 85% of the fair market value of the common stock at the end of the offering period;

or (ii) 85% of the lower of the fair market value of the common stock at the beginning or the end of an offering period.

The Board of Directors has determined that, until further notice, future offering periods will be made at 85 % of the lower of the fair market value of the common stock at the beginning or the end of an offering period.

The Company's Board of Directors approved and on April 23, 2015, stockholders subsequently ratified an increase in the total number of shares available for sale under the 2009 ESPP.

The approved increase in the total number of shares available for sale was 1.0 million shares, for an overall authorized amount of 3.3 million shares.

On November 16, 2015, the Company filed a Registration Statement on Form S- 8 with the Securities and Exchange Commission to register an additional 1.0 million shares of its common stock that may be issued under the Company’s 2009 ESPP.

The Company's Board of Directors approved and on April 26, 2017, stockholders subsequently ratified an increase in the total number of shares available for sale under the 2009 ESPP.

The approved increase in the total number of shares available for sale was 1.5 million shares, for an overall authorized amount of 4.8 million shares.

As such, 343 thousand shares of common stock were now authorized for issuance under the 2009 ESPP and participants could now purchase a maximum of 1,428 shares per six -month offering period.

The Company's Board of Directors approved and on April 22, 2020, stockholders subsequently ratified an increase in the total number of shares available for sale under the 2009 ESPP.

The approved increase in the total number of shares available for sale was 300 thousand shares, for an overall authorized amount of 643 thousand shares.

Additionally, stockholders approved an extension of the term for the 2009 ESPP for ten years until March 5, 2029.

On April 28, 2020, the Company filed a Registration Statement on Form S- 8 with the Securities and Exchange Commission to register an additional 407 thousand shares of its common stock that may be issued under the Company’s 2009 ESPP, which consisted of 300 thousand shares approved on April 22, 2020 and the 1.5 million shares approved on April 26, 2017 after accounting for the reverse stock split, or 107 thousand shares.

In November 2020, the Board of Directors approved to increase the maximum number of shares available to be purchased per six -month offering from 1,428 shares to 10,000 shares.

Additionally, the Board of Directors has determined that, until further notice, future offering periods will be made at 85 % of the lower of the fair market value of the common stock at the beginning or the end of an offering period.

As of December 29, 2024 , approximate ly 121 thousand shares of t he Company’s common stock were reserved for issuance under the 2009 ESPP Stock Plan.

3 unchanged sentences

To date, awards granted under the program consist of stock options, RSUs, and PRSUs.

The majority of stock-based awards granted under the program vest over four years.

The majority of stock-based awards granted under the program vest over two years.

Stock options granted under the program have a maximum contractual term of ten years.

Stock-based compensation expense recognized in the Company’s consolidated statements of operations for the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively is as follows (in thousands):

Stock-based compensation expense recognized in the Company’s consolidated statements of operations for the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively is as follows (in thousands):

Stock-based compensation expense included in:

3 unchanged sentences

Research and development

1,048 595 652

Selling, general and administrative

7 unchanged sentences

$ 4,606 $ 2,522 $ 2,035

The Company capitalized stock-based compensation amounts to capitalized internal-use software and tooling, net of $ 248 thousand for the year ended December 31, 2023 .

No stock-based compensation was capitalized or included in inventories for the years ended January 1, 2023 and January 2, 2022 .

The Company capitalized stock-based compensation amounts to capitalized internal-use software and tooling, net of $ 158 thousand and $ 248 thousand for the years ended December 29, 2024 and December 31, 2023, respectively.

No stock-based compensation was capitalized to internal-use software and tooling for the year ended January 1, 2023.

No stock-based compensation was capitalized or included in inventories for the years ended December 29, 2024, December 31, 2023, and January 1, 2023 .

Stock-Based Compensation Award Activity

2 unchanged sentences

Balance at January 1, 2023

RSUs and PRSUs granted

Options forfeited or expired

RSUs forfeited

Balance at January 1, 2023

RSUs and PRSUs forfeited

Balance at December 31, 2023

Options forfeited or expired

RSUs forfeited

RSUs and PRSUs granted

RSUs and PRSUs forfeited

Balance at December 29, 2024

8 unchanged sentences

(in thousands)

Balance outstanding at December 29, 2019

Forfeited or expired

Balance outstanding at January 3, 2021

4 unchanged sentences

Forfeited or expired

Balance outstanding at December 31, 2023

Forfeited or expired

Outstanding, exercisable, and vested at December 29, 2024

1 unchanged sentence

The intrinsic value for the stock options, based on the Company’s closing stock pri ce of $ 9.86 per share at December 27, 2024 , the last trading day of the Company’s current reporting period, was $ 0 which would have b een received by the option holders had all option holders exercised their options as of that date.

No options were exercised or granted during the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 .

No options were exercised or granted during the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 .

As of December 29, 2024 , there were no unvested stock options.

12 unchanged sentences

Nonvested at January 1, 2023

Nonvested at December 31, 2023

Nonvested at December 29, 2024

2009 ESPP Stock Plan

The Company issued 45 thousand shares of common stock at an average price of $ 4.48 per share, 52 thousand shares of common stock at an average price of $ 4.82 per share, and 84 thousand shares of common stock at an average price of $ 3.14 per share to employees in the years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively .

The weighted average grant date fair value and the weight-average assumptions used to estimate the fair value of ESPP option rights granted is as follows:

The Company issued 41 thousand shares of common stock at an average price of $ 7.65 per share, 45 thousand shares of common stock at an average price of $ 4.48 per share, and 52 thousand shares of common stock at an average price of $ 4.82 per share to employees in the years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively .

The weighted average grant date fair value and the weighted-average assumptions used to estimate the fair value of ESPP option rights granted is as follows:

Expected life (months)

5 unchanged sentences

$ 2.93 $ 2.14 $ 2.04

NOTE 14 — INFORMATION CONCERNING PRODUCT LINES, GEOGRAPHIC INFORMATION, ACCOUNTS RECEIVABLE AND REVENUE CONCENTRATION

NOTE 14 — INFORMATION CONCERNING SEGMENTS, PRODUCT LINES, GEOGRAPHIC INFORMATION, ACCOUNTS RECEIVABLE AND REVENUE CONCENTRATION

The Company identifies its business segments based on business activities, management responsibility, and geographic location.

For all periods presented, the Company operated in a single reportable business segment.

The Company has one reportable operating segment based on how its Chief Operating Decision Maker (CODM) manages the business and in a manner consistent with the availability of discrete financial information and the internal reporting provided to the CODM.

The CODM, the Company's Chief Executive Officer (CEO), reviews detailed income statements, balance sheets, and sales reports in order to assess performance of the Company.

The CODM does not review assets at a different asset level or category than at the consolidated level and the consolidated statements of operations are presented to the CODM without further disaggregation.

Significant segment expenses also include depreciation, amortization, and stock-based compensation, which are disclosed within the consolidated statements of cash flows.

The Company does not have any significant intra-entity sales or transfers.

Sales, operating income, and net income are some of the key variables monitored by the CODM and management when determining the Company's financial condition and operating performance.

The CODM uses sales, operating income (loss), and net income (loss) to evaluate income generated in deciding whether to reinvest profits into the segment or to use such profits for other purposes, such as for acquisitions or share repurchases.

These key variables are also used to monitor budget versus actual results, as well as in competitive analyses by benchmarking to the Company’s competitors.

The following is a breakdown of revenue by product family (in thousands):

6 unchanged sentences

Mature products include all products produced on semiconductor processes larger than 180 nanometer.

Associated royalty revenues are included within their respective device's classification.

The following is a breakdown of new products revenue (in thousands):

5 unchanged sentences

eFPGA IP revenue is comprised primarily of eFPGA intellectual property license revenue, eFPGA-related professional services revenue, and eFPGA-related support and maintenance revenue.

eFPGA-IP revenue related to professional services was approximately $ 16.6 million, $ 7.4 million, and $ 1.5 million in the Fiscal Years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

Contract assets were approximately $ 3.6 million, $ 2.0 million, and $ 0.3 million at December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively and were included under current assets on the Company's consolidated balance sheets.

Contract liabilities of $ 1.1 million, $ 0.3 million, and $ 0.5 million were included in deferred revenue on the Company's consolidated balance sheets at December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

eFPGA-IP revenue related to professional services was approximately $ 13.1 million, $ 16.6 million, and $ 7.4 million in the Fiscal Years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

Contract assets were approximately $ 2.7 million, $ 3.6 million, and $ 2.0 million at December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively and were included under current assets on the Company's consolidated balance sheets.

Changes in the Company's contract asset balance resulted from the Company gaining the unconditional right to invoice its customers for previously recognized revenue, partially offset by additional revenue recognition in the period for contracts that contain a different payment schedule than the Company's revenue recognition timeline.

The Company expects to invoice the $ 2.7 million in contract assets as of December 29, 2024 by the end of fiscal Q3'25.

Contract liabilities of $ 0.5 million, $ 1.1 million, and $ 0.3 million were included in deferred revenue on the Company's consolidated balance sheets at December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

In the twelve months ended December 29, 2024 , the Company recognized the previously outstanding contract liabilities as of December 31, 2023 of $ 1.1 million as revenue.

The Company expects to recognize the $ 0.5 million in deferred revenues as of December 29, 2024 using the output time-based method through the end of Q2'25.

Of its remaining unsatisfied performance obligations not currently on the Company's balance sheet, the Company expects to recognize $ 4.7 million by Q3'25, either through the input time-based method or the output method, recognizing revenue as deliverables such as IP and various technologies and training are transferred or provided to the customer.

For the majority of the Company's contracts, payment schedules are in place and cash receipts will not always follow the timeline of the Company's revenue recognition policies.

As such, the Company will typically record contract assets and liabilities on its consolidated balance sheet in relation to these contracts.

During the year ended January 1, 2023, the Company entered into a multiple-year agreement with a customer to provide professional services over multiple phases of which each phase has to be separately approved prior to commencement of work.

5 unchanged sentences

Further, revenue for the contract is recognized at a point in time when control of the asset is transferred to and accepted by the customer.

Associated with this agreement, the Company recognized professional services revenue amounting to $ 14.8 million and $ 3.3 million for the fiscal years ended December 31, 2023 and January 1, 2023, respectively.

Associated with this agreement, the Company recognized professional services revenue amounting to $ 10.9 million and $ 14.8 million and $ 3.3 million for the fiscal years ended December 29, 2024 , December 31, 2023 and January 1, 2023, respectively.

As of December 29, 2024 and December 31, 2023, the Company had $ 2.6 million and $ 3.6 million, respectively, in contract assets on its consolidated balance sheets associated with this agreement.

The Company derives revenue from sales to customers located in North America, Europe and Asia Pacific.

North America includes revenue from the United States.

Revenue from the Uni ted States was $ 18.6 million or 88 % of total revenue, $ 10.6 million or 67 % of total revenue, and $ 6.9 million or 54 % of total revenue in th e years ended December 31, 2023 , January 1, 2023 , and January 2, 2022 , respectively.

Revenue from the Uni ted States was $ 16.9 million or 84 % of total revenue, $ 18.6 million or 88 % of total revenue, and $ 10.6 million or 67 % of total revenue in th e years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively.

The Company attributes revenues from external customers to individual countries based on the end customer's country, if available.

If not available, the Company will utilize the country of the furthest entity in the supply chain for which the country is known, such as the distributor or assembly.

The following is a breakdown of revenue by shipping destination (in thousands):

11 unchanged sentences

Distributor "B"

Distributor "C"

54 % 70 % 20 %

* Represents less than 10% of revenue as of the date presented.

The following distributors and customers accounted for 10% or more of the Company's accounts receivable as of the dates presented:

The following distributors and customers accounted for 10% or more of the Company's accounts receivable and contract asset balance as of the dates presented:

Distributor "A"

* Represents less than 10% of trade accounts receivable, net, as of the date presented.

Approxi mately 0.4 % and 1.2 % of the Compa ny’s long-lived assets, including property and equipment and other assets, were located outside the United States as of December 31, 2023 and January 1, 2023 , respectively.

Distributor "D"

* Represents less than 10% of trade accounts receivable and contract assets, net, as of the date presented.

Approxi mately 0.1 % and 0.4 % of the Compa ny’s long-lived assets, including property and equipment and other assets, were located outside the United States as of December 29, 2024 and December 31, 2023 , respectively.

NOTE 15 — COMMITMENTS AND CONTINGENCIES

13 unchanged sentences

Absolute assurance cannot be given that any such third -party assertions will be resolved without costly litigation;

in a manner that is not adverse to the Company’s financial position, results of operations, or cash flows;

in a manner that is not adverse to the Company’s consolidated financial position, results of operations, or cash flows;

or without requiring royalty or other payments which may adversely impact gross profit.

NOTE 16 — SUBSEQUENT EVENTS

On March 13, 2024, QuickLogic Corporation (the “Company”) entered into Common Stock Purchase Agreements with certain institutional investors and their affiliated entities for the sale of an aggregate of 222,500 shares of common stock, par value $ 0.001 (the “Common Stock”), in a registered direct offering.

On January 7, 2025, the Company announced its Board of Directors was actively exploring options for its wholly owned subsidiary, SensiML.

Preliminary discussions commenced with potential strategic partners regarding the possible sale of SensiML or its assets.

As of the announcement date, the Company started accounting for its SensiML subsidiary under restructuring activities in accordance with ASC 420.

Additionally, as of the filing date of March 25, 2025, for the Company's fiscal 2024 annual report on Form 10 -K, there have not been any new material developments regarding the disposal of SensiML.

As such, the Company is unable to estimate any financial effects related to the disposal of SensiML.

The Company continues to evaluate various options for the future of SensiML.

On February 25, 2025, the Company entered into an At Market Issuance Sales Agreement (the "Sales Agreement") with Needham & Company, LLC (the "Agent"), pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent, shares of the Company's common stock, par value $ 0.001 per share, having an aggregate offering price of up to $ 20,000,000 (the "ATM Offering").

The Company intends to use the net proceeds from the ATM Offering for general corporate purposes, which may include, but is not limited to, working capital, licensing or acquiring intellectual property or technologies to incorporate in the Company's products, capital expenditures, to fund possible investments in and acquisitions of complementary businesses, partnerships, or minority investments, or to repay debt.

As of March 21, 2025, the Company sold 182 thousand shares under the ATM Offering.

On March 6, 2025, the Company entered into Common Stock Purchase Agreements with certain institutional investors for the sale of an aggregate of 256,200 shares of common stock, par value $ 0.001 (the “Common Stock”), in a registered direct offering.

These share placements resulted in gross proceeds of approximately $ 1.5 million (the “Financing”).

The purchase price for each share of Common Stock in the Financing was $ 5.93 .

The per share purchase price reflects a zero discount based upon the 10 -day volume weighted average price on the day pricing was agreed.

Issuance costs related to the offering were immaterial.

The per share purchase price reflects no discount based upon the 3 -day volume weighted average price as of the close of trading on March 5, 2025.

On March 14, 2025, the Company entered into the Eighth Amendment (the “Eighth Amendment”) to their Amended and Restated Loan and Security Agreement (as amended, the “Loan Agreement”) dated December 21, 2018, with Heritage Bank of Commerce.

The Eighth Amendment, which became effective on March 17, 2025, amends the Loan Agreement to, among other things, extend the loan maturity date for one year through December 31, 2026.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data