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Item 7. Management’s Discussion and Analysis

2026-03-27 compared with 2025-03-26 · 182 added, 163 removed, 259 unchanged (57% of the section changed)

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This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties including those discussed under Part I, Item 1A, “Risk Factors.” These risks and uncertainties may cause actual results to differ materially from those discussed in the forward-looking statements.

QuickLogic Corporation was founded in 1988 and reincorporated in Delaware in 1999.

We provide innovative, programmable silicon and software platforms to enable our customers to develop custom hardware products in a fast time-to-market and cost-effective way.

Specifically, we are a fabless semiconductor company with a variety of products:

embedded FPGA ("eFPGA") intellectual property ("IP"), low power, multi-core semiconductor system-on-chips ("SoCs"), discrete FPGAs, and AI software.

Our customers can use our eFPGA IP for hardware acceleration and pre-processing in their Application Specific Integrated Circuit (ASIC) products, our SoCs to run our customers' software and build their hardware around, and our discrete FPGAs to implement their custom functionality.

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

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

Our new products include the following:

eFPGA IP Licensing business, associated professional services, consisting of development and integration of eFPGA technology into custom semiconductor solutions, and our silicon products consisting of EOS™, QuickAI™, ArcticLink® III, PolarPro®3, PolarPro II, PolarPro, and Eclipse II products.

In addition to delivering our own semiconductor solutions, our new products category includes our AI/ML Software Platform from our wholly-owned subsidiary company, SensiML, which includes Software as a Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services, all of which are also included in the new products revenue category.

Our mature products include primarily FPGA families named PASIC®3 and QuickRAM®, as well as programming hardware and design software.

For our IP and silicon platforms, we collaborate with multiple partners on co-marketing and/or co-selling initiatives.

These partners could have primary business lines in semiconductor IP, Design Services, semiconductor foundry, semiconductor assembly and test, and others.

For our AI/ML Software, SensiML collaborates with several microcontroller and sensor manufacturers to integrate the microcontroller and/or sensor manufacturers’ development kits with SensiML’s Analytics Toolkit in order to showcase combined solutions for AI/ML applications.

Currently, these collaborations include On Semiconductor Corp., Microchip Technology Inc., Silicon Laboratories, Inc., Arduino, NXP Semiconductors N.V., Raspberry Pi, and Nordic Semiconductor.

Our eFPGA IP is currently developed on 12nm, 16nm, 22nm, 28nm, 40nm, 65nm, 90nm, 130nm, and 250nm process nodes with a roadmap to more advanced, sub 10nm nodes.

The licensable IP is generated by our automated compiler tool called Australis™, which enables our engineers to create an eFPGA IP for our licensees that they can then integrate into their SoC without significant involvement by QuickLogic.

We believe this flow enables a scalable development and support model for QuickLogic.

For our eFPGA strategy, we typically work with semiconductor manufacturing partners prior to this IP being licensed to a SoC company.

We have changed our manufacturing strategies to reduce the cost of our silicon solution platforms to enable their use in a range of unique products ranging from low to high volume.

Our EOS S3, EOS S3AI, QuickAI and ArcticLink III silicon platforms combine mixed signal physical functions and hard-wired logic alongside our field programmable logic.

Our EOS S3, EOS S3AI, and ArcticLink III solution platforms are manufactured on process nodes where we can benefit from smaller die sizes and lower power consumption.

We typically implement sophisticated logic blocks and mixed signal functions in hard-wired logic because it is very cost-effective and energy efficient.

We use small form factor packages, which are less expensive to manufacture and include smaller pin counts.

Reduced pin counts result in lower costs for our customers' printed circuit board space and routing.

Furthermore, our SRAM reprogrammable silicon platforms can be programmed in-system by our customers, and therefore, we do not incur programming costs, lowering the overall cost of ownership to our customers.

We expect to continue to invest in silicon solution platforms and manufacturing technologies that make us competitive for the variety of markets and applications that programmable logic serves.

In order to grow our revenue from its current level, we depend upon increased revenue from our new products, including existing new product platforms and platforms currently in development.

We expect our business growth to be driven mainly by eFPGA IP and our silicon solutions.

Therefore, our revenue growth needs to be strong enough to enable us to sustain profitability while we continue to invest in the development, sale, and marketing of our new solution platforms, IP, and software.

We market our programmable logic (FPGAs and eFPGA IP) solutions primarily to Defense Industrial Base contractors, U.S.

Government entities, System OEMs, and fabless semiconductor companies.

These customers may value one or more of our product categories.

A solution can be based on our programmable technology, which enables customized designs, low power, flexibility, rapid time-to-market, longer time-in-market, and lower total cost of ownership.

We are capable of providing complete solutions because of our investment in developing the low power IP and software required to implement specific functions, along with sensor software algorithms optimized for our architecture.

In some cases, we develop the IPs and either software or firmware ourselves and, in other cases, we utilize third parties to develop the mixed signal physical layers, logic, and/or software.

We market our SoC and SensiML solutions to OEMs and ODMs offering differentiated Consumer/IoT products, to processor vendors wishing to expand their served available market, and to sensor manufacturers and sensor processing software companies wishing to expand their ecosystems.

Our target markets for our SoC and SensiML products include Consumer/Industrial IoT and Consumer Electronics.

By using our silicon platforms, our IPs, our software, and our in-depth architecture knowledge, we can deliver energy efficient custom solutions that blend the benefits of traditional ASSPs with the flexibility, product proliferation, differentiation, and low total cost of ownership advantages of programmable logic.

We monetize our technology through hardware product sales and eFPGA IP licenses, with any necessary corresponding work delivered via professional engineering services, SensiML Analytics Toolkit subscriptions, and per unit royalties.

We specialize in enhancing the user experience in leading edge IoT hardware products.

For our customers, we enable hardware and sensor algorithmic differentiation quickly, cost-effectively, and at low power.

For our partners, we expand their reach into new segments and new use cases, thereby expanding the served available market for their existing hardware products.

Our embedded FPGA technology gives ASIC and SoC developers the benefit of flexibility to make post-manufacturing design changes at very fast time-to- and time-in-market, while keeping power consumption low.

Our multi-core sensor processing products such as ArcticLink 3 S1, ArcticLink 3 S2, EOS 3, EOS S3 LV, and EOS S3AI provide an extremely power-efficient approach for real-time multi-modal (vision, motion, voice, location, biometric, and environmental) sensor processing independently of the cloud.

Our SensiML Analytics Toolkit is cutting-edge software that enables ultra-low power IoT endpoints that implement AI to transform raw sensor data into meaningful insight at the device itself.

The toolkit also provides an end-to-end development platform spanning data collection, labeling, algorithm and firmware auto generation, and testing.

We recognize that our markets require a range of solutions, and we intend to work with market-leading companies to combine silicon solution platforms, packaging technology, FPGA User Tools, sensor software algorithms, software drivers and firmware, to meet the product proliferation, high bandwidth, time-to-market, time-in-market, and form factor requirements of our customers.

We intend to continue to define and implement compelling solutions for our target customers and partners.

We believe our solutions are resonating with our target customers who value lower power consumption, platform design flexibility, rapid time-to-market, longer time-in-market, and low total cost of ownership available through the use of our solutions.

We sell our products through a network of sales managers in North America, Europe, and Asia.

In addition to our corporate headquarters in San Jose, California, we have international sales operations in Japan and the United Kingdom.

Our sales personnel and independent sales representatives are responsible for sales and application support for a given region, focusing on major strategic accounts, and managing our channel sales partners such as distributors.

Customers typically order our products through our distributors.

Currently, we have fourteen active distributors in North America and a network of nineteen active distributors and sales representatives throughout Europe and Asia to support our international business.

eFPGA IP customers and SensiML SaaS subscribers typically enter into licensing agreements directly with QuickLogic and SensiML, respectively.

We also have an Aerospace and Defense, industrial, and IoT product customer base that purchases our mature silicon products.

We expect to continue to offer silicon hardware products to these customers, as well as new eFPGA IP for when these customers choose to implement their own silicon platform solution.

New products revenue for the Fiscal Year ended December 29, 2024 was $16.1 million, a decrease of $2.1 million as compared to the Fiscal Year ended December 31, 2023 .

Of the $16.1 million in new products revenue, approximately $13.1 million was generated from eFPGA IP revenue, primarily eFPGA-related professional engineering services, as compared to approximately $16.8 million in the Fiscal Year ended December 31, 2023 .

Mature products revenue for the Fiscal Year ended December 29, 2024 was $4.0 million, an increase of $1.0 million compared to the Fiscal Year ended December 31, 2023 .

We shipped new products into multiple end market segments including Aerospace and Defense, Industrial, IoT, Consumer, and SaaS revenue from the new Artificial Intelligence ("AI") market beginning in the Fiscal Year ended December 29, 2024.

We reported a net loss of $3.8 million for the Fiscal Year ended December 29, 2024 compared to a net loss of $0.3 million in the Fiscal Year ended December 31, 2023 .

QuickLogic Corporation was founded in 1988 and completed its reincorporation in Delaware in 1999.

We are a fabless semiconductor company specializing in programmable logic technologies, including embedded FPGA ("eFPGA") intellectual property ("IP") and programmable logic semiconductor devices.

Our technologies enable semiconductor companies and system developers to incorporate configurable hardware functionality into custom semiconductor devices and electronic systems.

We generate revenue primarily through the sale of FPGA semiconductor devices and the licensing of eFPGA IP for integrating into application-specific integrated circuits ("ASICs") and system-on-chip ("SoC") devices.

In connection with these engagements, we may also provide professional engineering services to support customer integration efforts and may receive royalties based on customer production volumes.

Our programmable logic technologies are used across a range of markets including aerospace and defense systems, industrial and infrastructure systems, computing platforms, and semiconductor devices developed by fabless semiconductor companies.

These technologies enable system designers to implement adaptable hardware functionality, accelerate data processing workloads, and support evolving application requirements while maintaining low power consumption and design flexibility.

Our growth strategy focuses on expanding adoption of our eFPGA IP, continuing development of programmable logic semiconductor devices, and supporting customers integrating programmable logic technologies into custom semiconductor designs and mission-critical electronic systems.

New products revenue from continuing operations for the Fiscal Year ended December 28, 2025 was $10.5 million, a decrease of $5.2 million as compared to the Fiscal Year ended December 29, 2024 .

Of the $10.5 million in new products revenue from continuing operations, approximately $9.5 million was generated from eFPGA IP revenue, primarily eFPGA-related professional engineering services, as compared to approximately $13.1 million in the Fiscal Year ended December 29, 2024 .

Mature products revenue from continuing operations for the Fiscal Year ended December 28, 2025 was $3.3 million, a decrease of $0.7 million compared to the Fiscal Year ended December 29, 2024 .

We shipped new products into multiple end market segments including Aerospace and Defense, Industrial, IoT, and Consumer beginning in the Fiscal Year ended December 28, 2025.

We reported a net loss from continuing operations of $12.3 million for the Fiscal Year ended December 28, 2025 , compared to a net loss from continuing operations of $2.9 million in the Fiscal Year ended December 29, 2024 .

We have experienced net losses in the past years and expect to experience losses in at least some of the fiscal quarters during 2026 as we continue to develop new products, applications, and technologies.

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Whether we can achieve cash flow levels sufficient to support our operations cannot be accurately predicted, and our investment portfolio is subject to a degree of interest rate and liquidity risk.

Unless such cash flow levels are achieved, in addition to the $3.2 million, $3.5 million, and $2.3 million in net proceeds that we received in December 2024 , March 2024, and March 2023, respectively, fro m the sale of our equity securities, and the revolving line of credit we may be able to draw down from Heritage Bank of Commerce, we may need to obtain additional funds through strategic divestiture, or sell debt or equity securities, or some combination thereof, to provide fundin g for our operations.

Unless such cash flow levels are achieved, in addition to the $8.7 million and $6.8 million in net proceeds that we received from our 2025 and 2024 sales of our equity securities, respectively, and the revolving line of credit we may be able to draw down from Heritage Bank of Commerce, or any future similar banking partners, we may need to obtain additional funds through strategic divestiture, or sell debt or equity securities, or some combination thereof, to provide fundin g for our operations.

Such additional funding may not be available on commercially reasonable terms, or at all.

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Our Employees and Customers

QuickLogic nurtures a culture of teams of employees operating in a committed, execution-oriented, and globally collaborative environment.

Our close-knit, family-oriented team welcomes and encourages all perspectives and ideas to improve and innovate in our space, providing exciting career opportunities for the future of technology.

Collaboration is deeply ingrained in how we work with each other and our customers.

We offer competitive compensation and benefits.

Many of our personnel work from home except a few personnel required for minimum operations.

We embrace remote work and enable our employees to do their best work from anywhere in the United States, allowing them to balance their work obligations with their personal lives.

We are committed to our customers to provide the support they need to continue providing vital services and tools.

Our employees are critical to our ability to develop and support our programmable logic technologies and serve our customers.

We seek to maintain a collaborative work environment that supports innovation, operational execution, and technical expertise across our engineering, product development, sales, and administrative teams.

We offer competitive compensation and benefits programs designed to attract, retain, and motivate qualified employees.

Our workforce includes personnel located in the United States and internationally, and many of our employees operate in hybrid or remote work environments depending on their role and responsibilities.

We emphasize collaboration among our employees and with our customers in order to support the development and deployment of programmable logic technologies and solutions.

Our teams work closely with customers to support design, integration, and deployment of our programmable logic devices and IP technologies in a range of semiconductor and system-level applications.

Critical Accounting Policies and Estimates

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We believe that we apply judgments and estimates in a consistent manner and that such consistent application results in consolidated financial statements and accompanying notes that fairly represent all periods presented.

However, any factual errors or errors in these judgments and estimates may have a material impact on our financial statements.

However, any factual errors or errors in these judgments and estimates may have a material impact on our consolidated financial statements.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification ("ASC") Topic 606 and related Accounting Standards Updates ("ASUs").

We earn revenue from principal activities by (i) delivering standard hardware products, (2) delivering and providing eFPGA IP products and professional services, (iii) and providing software as a service to customers, as well as (iv) other miscellaneous revenue.

We earn revenue from principal activities by (i) delivering standard hardware products and (ii) delivering and providing eFPGA IP products and professional services, as well as (iii) other miscellaneous revenue.

In accordance with ASC 606, we apply a five-step model for recognizing revenue:

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However, we do record an allowance for hardware product sales returns, which requires some judgment by management.

We recognized hardware product revenue of approxima tely $6.1 million, or 30% of total revenue, $4.0 million, or 19% of total revenue, and $8.1 million, or 50% of total revenue, in the Fiscal Years ended December 29, 2024, December 31, 2023, and January 1, 2023, respectively.

We recognized hardware product revenue of approxima tely $4.2 million, or 31% of total revenue from continuing operations and $6.1 million, or 31% of total revenue from continuing operations in the Fiscal Years ended December 28, 2025 and December 29, 2024, respectively.

Hardware Product Sales Return Allowance

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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 $1 thousand, $8 thousand, and $2 thousand for the years ended December 29, 2024, December 31, 2023, and January 1, 2023, respectively, on our consolidated statements of operations.

Amounts recorded for hardware product sales returns were $2 thousand and $1 thousand for the Fiscal Years ended December 28, 2025 and December 29, 2024, respectively, on our consolidated statements of operations.

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

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This would result in an unfavorable impact to income from operations.

We recognized eFPGA IP revenue of approximately $13.1 million, or 65% of total revenue, $16.8 million, or 79% of total revenue, and $7.5 million, or 47% of total revenue, in the Fiscal Years ended December 29, 2024, December 31, 2023, and January 1, 2023, respectively.

SaaS and Other Revenue

SaaS & Other Revenue is comprised primarily of software as a service ("SaaS") revenue and software-related professional services revenue.

SaaS revenue is generated when we license our software to customers and allow customers to access the software over a short-term subscription basis.

We grant the customer the right to access and use software at the outset of the arrangement and throughout the entire term of the arrangement.

We recognize SaaS revenue ratably over the license term.

We recognize revenue from software-related professional services as services are provided to the customer.

We recognized eFPGA IP revenue of approximately $9.5 million, or 69% of total revenue from continuing operations and $13.1 million, or 67% of total revenue from continuing operations in the Fiscal Years ended December 28, 2025 and December 29, 2024, respectively.

Other Miscellaneous Revenue

Other miscellaneous revenue is comprised primarily of royalties from licensing our technology.

We recognize royalty revenue on the later of (i) the subsequent sale or usage, or (ii) satisfaction of a performance obligation to which some or all of the sales-based royalty has been allocated.

We recognized SaaS and Other Revenue of approxim ately $0.9 million , or 4% of total revenue, $0.4 million, or 2% of total revenue, and $0.6 million, or 3% of total revenue, in the Fiscal Years ended December 29, 2024, December 31, 2023, and January 1, 2023, respectively.

We recognized Other Miscellaneous Revenue of approxim ately $0.1 million , or 0.5% of total revenue from continuing operations and $0.4 million, or 2.2% of total revenue from continuing operations in the Fiscal Years ended December 28, 2025 and December 29, 2024, respectively.

Practical Expedients, Elections, and Exemptions

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Although we make every effort to ensure the accuracy of our forecasts of future product demand, any significant unanticipated changes in demand or frequent new product developments could have a significant impact on the value of our inventory and our results of operations.

Goodwill represents the excess fair value of consideration transferred over the fair value of net assets acquired in a business combination.

The carrying value of $0.2 million associated with our goodwill is not amortized but is annually tested for impairment during our fourth fiscal quarter, and more often if there is an indicator of impairment.

We either perform a qualitative assessment under ASC 350, including the consideration of factors such as macroeconomic conditions, industry and market considerations, and overall financial performance, or a quantitative assessment under ASU No.

2017-14, which involves comparing the carrying value of the reporting unit to its fair value.

Subsequent to our annual impairment testing in the fourth quarters of 2024 and 2023, there were no indicators of impairment that gave cause for additional impairment testing of goodwill.

No impairment of goodwill has been recognized to date.

Goodwill represents the excess fair value of the purchase price over the fair value of identifiable net assets acquired.

Goodwill is not amortized but is tested for impairment annually during our fourth fiscal quarter and interim periods if events or changes in circumstances (triggering events) indicate that the carrying amount of goodwill may not be recoverable, in accordance with ASC 350.

Our annual goodwill impairment test performed in the fourth quarter of Fiscal Year 2024 indicated that no impairment was identified.

As of December 28, 2025, we determined that the criteria for a held-for-sale classification for the SensiML subsidiary were no longer met.

As run-off operations at the SensiML subsidiary concluded in Fiscal Year 2025, we decided to account for the SensiML subsidiary as an asset group held for disposal in accordance with ASC 360-10.

As a result of this classification, we evaluated the recoverability, or undiscounted cash flows expected to result from the disposition of the SensiML subsidiary, including goodwill associated with the SensiML acquisition, to determine fair value of the asset group.

In our evaluation, we determined that such goodwill was fully impaired, and accordingly, recorded an impairment of that goodwill in the amount of $0.2 million in accordance with ASC 350-20 and ASC 205-20.

Long-Lived and Intangible Assets

Our long-lived assets include property and equipment, software, tooling, furniture and fixtures, leasehold improvements, and internal-use software.

Our long-lived assets include property and equipment, software, tooling, furniture and fixtures, leasehold improvements, and internally developed software.

These assets are stated at cost less accumulated depreciation and amortization.

Depreciation and amortization of long-lived assets is calculated on a straight-line basis over the estimated useful lives of the assets, generally one to ten years, with the amortization period of internal-use software being generally five years and the amortization period of leasehold improvements being the shorter of the lease term or the estimated useful lives of the assets, which is generally three to five years.

We note the estimation of the useful lives of our long-lived assets involves judgment and estimation by management.

In the determination of an asset’s useful life, we consider the following factors:

obsolescence, competition, historical product life cycles, and industry and market considerations, among others.

Depreciation and amortization of long-lived assets is recognized on a straight-line basis over the estimated useful lives of the assets, which generally range from one to ten years.

Internal-use software is generally amortized over five years and leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset, generally three to five years.

Determining the useful lives of long-lived assets requires management judgment.

In estimating useful lives, we consider factors including technological obsolescence, competition, historical product life cycles, and industry and market conditions.

Refer to Note 6 for additional information on the useful life ranges of our long-lived assets.

We recognize assets for pre-production design and development costs for which there is a contractual reimbursement by the customer.

These assets are classified under 'tooling' within property and equipment and are depreciated over the estimated useful lives of the assets, generally seven years.

Refer to Note 4 for additional information.

We capitalize costs related to the development and enhancement of hosted services we provide to our customers and the development and enhancement of other internally used engineering software as internal-use software.

Costs incurred in the application development phase are capitalized and amortized on a straight-line basis over their useful lives, which are generally five to seven years.

Costs related to planning and other preliminary project activities and post-implementation activities are expensed as incurred.

We also capitalize costs related to internally used enterprise-level business and finance software in support of our operational needs as software.

We recognize assets for pre-production development and tooling costs for which there is an alternative use to the Company.

These assets are classified as 'tooling' within property and equipment and are depreciated over their estimated useful lives, generally seven years.

Tooling may include both tangible and intangible assets, including but not limited to, mask sets and other semiconductor production tooling used in the manufacture of customer-specific products.

We capitalize costs related to the development and enhancement of internally used engineering software, hosted services platforms provided to customers, and certain enterprise-level operational systems as internal-use software.

Capitalization of internally developed software for internal-use begins when the application development stage is reached and management determines that the project is probable for completion and the software will be used to perform the function intended.

Costs incurred during the application development stage, including upgrades and enhancements, are capitalized and amortized on a straight-line basis over their estimated lives, generally five to seven years.

Costs incurred during the planning stage and post-implementation activities are expensed as incurred.

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

We review the recoverability of our 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.

We assess possible impairment based on our 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, as well as the useful lives applied to the assets.

If these cash flows are less than the carrying value of the asset or asset group, an impairment loss is recognized for the difference between the estimated fair value and the carrying value, and the carrying value of the related assets is reduced by this difference.

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

In estimating future cash flows and the fair value of our long-lived assets, we consider changes in legal factors and the business climate, product and technology obsolescence, and competition.

We performed an annual impairment assessment in the fourth quarters of 2024 and 2023 and deemed no impairment was necessary for the current or prior year.

Subsequent to our annual impairment testing in the fourth quarters of 2024 and 2023, there were no indicators of impairment that gave cause for additional impairment testing of our long-lived assets.

No impairment of intangible assets has been recognized to date.

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

We review the recoverability of our long-lived assets annually and when events or changes in circumstances indicate that the carrying value of an asset group may not be recoverable.

Recoverability is assessed based on the expected future undiscounted cash flows of the asset group.

If the carrying value exceeds the expected future undiscounted cash flows, an impairment loss is recognized for the difference between the carrying value and the estimated fair value of the asset group.

In estimating future cash flows and fair value, we consider changes in legal factors, the business climate, technological obsolescence, and competitive conditions.

Our annual impairment assessments performed in the fourth quarters of Fiscal Years 2025 and 2024 indicated that no impairment of long-lived or intangible assets was identified for our continuing operations.

As of December 28, 2025, we determined that the criteria for a held-for-sale classification for the SensiML subsidiary were no longer met.

As run-off operations at the SensiML subsidiary concluded in Fiscal Year 2025, we decided to account for the SensiML subsidiary as an asset group held for disposal in accordance with ASC 360-10.

As a result of this classification, we evaluated the recoverability, or undiscounted cash flows expected to result from the disposition of the SensiML subsidiary, including its long-lived and intangible assets, to determine the fair value of the asset group.

In our evaluation, we decided to record impairment charges to reduce the carrying value of the long-lived and intangible assets within the SensiML subsidiary asset group.

The impairment charges of $2.2 million, reduced the carrying value of the long-lived and intangible assets within the SensiML subsidiary asset group to $0.

Additionally, we recogniz ed a loss of $5 thousand on the disposal of equipment i n the Fiscal Year December 28, 2025.

We did not recognize any gains or losses on the disposal of equipment in the year ended December 29, 2024 .

Continuing Operations

Results of Operations

The following table sets forth the percentage of revenue for certain items in our statements of operations for the periods indicated:

Statements of Operations:

Cost of revenue

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Selling, general and administrative

Impairment charges

Restructuring costs

Operating income (loss)

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Total revenue

New products revenue consists of revenues from the sale of hardware products manufactured on 180 nanometer or smaller semiconductor processes, eFPGA IP license, professional services, QuickAI, and SensiML AI software as a service (SaaS) revenues.

New products revenue consists of revenues from the sale of hardware products manufactured on 180 nanometer or smaller semiconductor processes and eFPGA IP licenses, as well as professional services.

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

Associated royalty revenues are included within their respective device's

Total revenue decreased approximately $5.9 million, or (30)% in Fiscal Year ended December 28, 2025 as compared to the Fiscal Year ended December 29, 2024 .

The decrease in total revenue was comprised of a decrease of $2.1 million in new product revenue, partially offset by an increase of $1.0 million in mature product revenue.

The decrease in total revenue was comprised of a decrease of $5.2 million in new product revenue and a decrease of $0.7 million in mature product revenue.

New Products Revenue .

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Total new products revenue

The decrease in new product revenue was primarily driven by a decrease in eFPGA IP revenue, partially offset by increases in new hardware product revenue and SaaS & Other revenue.

The decrease in new product revenue was primarily driven by a decrease in eFPGA IP revenue.

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

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The decrease in eFPGA IP revenue was primarily comprised of a $3.7 million decrease in eFPGA-related professional services revenue.

SaaS & Other revenue increased approximately $0.3 million, or 225% as compared to the Fiscal Year ended December 31, 2023.

The increase in SaaS & Other revenue was driven by a $0.3 million increase in SaaS IP revenue.

New hardware revenue increased by approximately $1.3 million, or 107%, in the Fiscal Year ended December 29, 2024 compared to the Fiscal Year endedDecember 31, 2023 .

The increase in new hardware product revenue was primarily comprised of an increase of $1.1 million in connectivity product revenue and $0.2 million in display product revenue.

Contract liabilities (deferred revenue) associated with eFPGA-related professional services revenue was $0.4 million and $1.0 million and were included in deferred revenue on the consolidated balance sheets as of December 29, 2024 and December 31, 2023, respectively.

Contract assets associated with eFPGA-related professional services revenue was $2.7 million and $3.6 million on the consolidated balance sheets as of December 29, 2024 and December 31, 2023, respectively.

New hardware revenue decreased by approximately $1.6 million, or (61)%, in the Fiscal Year ended December 28, 2025 compared to the Fiscal Year ended December 29, 2024 .

The decrease in new hardware product revenue was primarily comprised of a decrease of $1.6 million in connectivity product revenue.

Contract liabilities (deferred revenue) associated with eFPGA IP revenues were $0.1 million and $0.4 million and were included in deferred revenue on the consolidated balance sheets as of December 28, 2025 and December 29, 2024, respectively.

Contract assets associated with eFPGA IP revenues were $0.2 million and $2.7 million on the consolidated balance sheets as of December 28, 2025 and December 29, 2024, respectively.

Gross Profit.

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The change in gross profit reflects a decrease in revenue of $5.9 million, or (30)%, accompanied by an increase in cost of revenue of $3.2 million, or 42%.

The decrease in revenue was driven by a $2.1 million decrease in new product revenue, primarily due to reductions in eFPGA IP professional services revenue, partially offset by a $1.0 million increase in mature product rev enu e.

The $1.5 million increase in cost of revenue was primarily comprised of increases in labor, tooling, and tooling-related depreciation expense, offset by decreases in consulting costs, all collectively associated with performing for revenue contracts, including device production, and additionally further offset by changes in inventory reserves.

The decrease in revenue was driven by a $5.2 million decrease in new product revenue, primarily due to reductions in eFPGA IP professional services revenue, accompanied by a $0.7 million decrease in mature product rev enu e.

The $3.2 million increase in cost of revenue was primarily comprised of increases in compensation expense, tooling, and tooling-related depreciation expense, all collectively associated with performing for revenue contracts, in addition to an increase in reserves related to certain wafer product inventory.

In Fiscal Years 2025 and 2024, we capitalized costs associated with internal-use software of approxima tely $0.6 million and $0.4 million, respectively.

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The sale of inventories previously written-off was approximately $0.1 million and $0.1 million in Fiscal Years 2025 and 2024, respectively.

We wrote down approximately $0.1 million and $0.6 million to inventory reserves in Fiscal Years 2024 and 2023.

We wrote down approximately $0.6 million and $0.1 million to inventory reserves in Fiscal Years 2025 and 2024, respectively.

Operating Expenses.

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Selling, general and administrative

Impairment charges

Restructuring costs

Total operating expenses

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R&D expenses were $5.3 million and $5.8 million in Fiscal Years 2025 and 2024, respectively, which represented 39% and 30%, respectively, of revenue for those periods.

The $0.1 million increase in R&D expenses in Fiscal Year 2024 as compared to Fiscal Year 2023 was primarily attributable to increases in employee salaries, financing arrangement expenses, and reductions in the allocation of R&D expenses to cost of revenues, partially offset by a decrease in consulting costs, software maintenance costs, and amortization expense associated with software tools.

R&D costs allocable to cost of revenues are included in cost of revenue in the consolidated statements of operations.

The $0.6 million decrease in R&D expense s in Fiscal Year 2025 as compared to Fiscal Year 2024 was primarily attributable to an increase of R&D labor allocations to Cost of Revenues and decreases in salaries and compensation, partially offset by an increase in general allocations and software tool amortization.

Selling, General and Administrative Expenses.

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SG&A expenses were $9.3 million and $8.8 million in Fiscal Years 2025 and 2024, respectively, which represented 67% and 45%, respectively, of revenue for those periods.

The $0.8 million increase in SG&A expenses in Fiscal Year 2024 as compared to Fiscal Year 2023 was primarily attributable to an increase in salaries and stock-based compensation costs, partially offset by a decrease in incentive compensation.

The $0.5 million increase in SG&A expenses in Fiscal Year 2025 as compared to Fiscal Year 2024 was primarily attributable to an increase in bonus incentive compensation, partially offset by decreases in stock-based compensation costs.

Impairment Charges.

The $0.3 million in impairment charges in Fiscal Year 2025 were attributable to the full impairment of the Company's non-marketable equity investment.

Restructuring Costs:

The $75 thousand in restructuring costs in Fiscal Year 2025 were primarily attributable to severance payments for employees within QuickLogic related to SensiML discontinued operations.

Interest Expense and Interest Income and Other (Expense) Income, net.

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Provision for income taxes

Income tax expense for the Fiscal Year 2024 and 2023 relates primarily to foreign income tax provisions.

Income tax expense for the Fiscal Year 2025 and 2024 relates primarily to US state and foreign income tax provisions.

As of the end of Fiscal Year 2025, our ability to utilize our U.S.

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We will continue to assess the realizability of deferred tax assets in future periods.

Comparison of Fiscal Years 2023 and 2022

For discussion related to the results of operations and changes in financial condition for Fiscal Year 2023 compared to Fiscal Year 2022, please refer to “Part II, Item 7.

Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Fiscal Year 2023 Form 10-K, which was originally filed with the SEC on March 27, 2024.

Discontinued Operations

In the first quarter of 2025, we announced our Board of Directors was actively exploring options for our wholly owned subsidiary, SensiML.

This decision by the Company and our Board of Directors was influenced by recent events, including eFPGA IP design wins with strategic customers, expansion of large government ruggedized FPGA and eFPGA IP contracts, performance improvements of its eFPGA IP products, recent changes in the FPGA market competitor landscape, and an increase in inbound interest from customers of former eFPGA market competitors.

With the success of our eFPGA IP and ruggedized FPGA business, we plan to focus all of our resources on leveraging and growing the cornerstones of our core business model.

SensiML's Analytics Toolkit provides an end-to-end Artificial Intelligence / Machine Learning development platform with accurate sensor algorithms using AI technology, spanning data collection, labeling, algorithm and firmware auto generation, and testing.

This cutting-edge software enables ultra-low power IoT endpoints that implement AI to transform raw sensor data into meaningful insight at the device itself.

Revenue streams from SensiML included Software as a Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services.

As of January 7, 2025, the Company began accounting for the SensiML subsidiary in accordance with ASC 205-20, Discontinued Operations.

As of December 28, 2025, we determined that the criteria for a held-for-sale classification for the SensiML subsidiary were no longer met.

As run-off operations at the SensiML subsidiary concluded in Fiscal Year 2025, we decided to account for the SensiML subsidiary as an asset group held for disposal in accordance with ASC 360-10.

As a result of this classification, we evaluated the recoverability, or undiscounted cash flows expected to result from the disposition of the SensiML subsidiary.

Based on our evaluation, we decided to fully impair the asset group of the SensiML subsidiary in the amount of $2.4 million, constituting a significant portion of the SensiML subsidiary's net loss from discontinued operations of $2.5 million for the Fiscal Year ended December 28, 2025 .

This is compared to a net loss from discontinued operations of $0.9 million in the Fiscal Year ended December 29, 2024 .

Additionally, we forgave approximately $7.9 million of intercompany payables owed by SensiML to the parent company.

The forgiveness of this intercompany balance was accounted for as a capital contribution to SensiML and was approved by the Company's Board of Directors as a related-party transaction.

Refer to Note 3 for additional information related to the related party transaction.

We marketed our SensiML solutions to OEMs and ODMs offering differentiated Consumer/IoT products, to processor vendors wishing to expand their served available market, and to sensor manufacturers and sensor processing software companies wishing to expand their ecosystems.

Our target markets for our SensiML products included Consumer/Industrial IoT and Consumer Electronics.

SensiML SaaS subscribers typically entered into licensing agreements directly with SensiML.

New products revenue from discontinued operations

for the Fiscal Year ended

December 28, 2025

was $11 thousand, a decrease of $0.5 million

as compared to the Fiscal Year ended

December 29, 2024

Contract liabilities (deferred revenue) associated with SensiML were $0 and $10 thousand and were included in deferred revenue on the consolidated balance sheets as of December 28, 2025 and December 29, 2024, respectively.

Revenue Recognition

The following is a description of our revenue recognition policy by principal activity for discontinued operations:

SensiML revenues were comprised primarily of software as a service ("SaaS") revenue and software-related professional services revenue.

SaaS revenue was generated when we licensed our software to customers and allowed customers to access the software over a short-term subscription basis.

We granted the customer the right to access and use software at the outset of the arrangement and throughout the entire term of the arrangement.

We recognized SaaS revenue ratably over the license term.

We recognized revenue from software-related professional services as services are provided to the customer.

In Fiscal Years 2025 and 2024, we capitalized costs associated with SensiML internal-use software of approxima tely $0 and $0.7 million, respectively.

For Fiscal Years 2025 and 2024, we recognized $0 and $0.7 million, respectively, in amortiza tion expense of SensiML internal-use software in cost of revenues on our consolidated statements of operations.

Results of Operations

The following table sets forth the percentage of revenue from discontinued operations for certain items in our consolidated statements of operations for the periods indicated:

Cost of revenue

Operating expenses:

Research and development

Selling, general and administrative

Impairment charges

Restructuring costs

Interest income and other income (expense), net

Income (loss) from discontinued operations before income taxes

(Benefit from) provision for income taxes

Net income (loss) from discontinued operations

Key Performance Indicators

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We have historically financed our operating losses and capital investments through the sale of our common stock, financing arrangements, operating leases, and cash flows provided by operations.

We also have the ability to draw advances from our revolving facility with Heritage Bank of Commerce ("Heritage Bank").

We also have a revolving facility with Heritage Bank of Commerce ("Heritage Bank").

As of December 28, 2025, our principal sources of liquidity consisted of cash, cash equivalents, and restricted cash of $18.8 million, inclusive of $15.0 million in advances from our $20 million revolving facility.

The revolving credit facility with Heritage Bank expires on December 31, 2025, and the Company fully expects to renew it before expiration.

The revolving credit facility with Heritage Bank expires on December 31, 2026.

Our principal contractual commitments include purchase obligations, re-payments of advances from our revolving facility, and payments under financing arrangements and operating leases.

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Credit Agreement

On December 21, 2018 , we entered into an Amended and Restated Loan and Security Agreement with Heritage Bank (as amended, the "Loan Agreement") which among other things, provided a revolving facility ("Revolving Facility") allowing us to draw advances up to $15.0 million.

On December 21, 2018 , we entered into an Amended and Restated Loan and Security Agreement with Heritage Bank of Commerce (as amended, the "Loan Agreement") which among other things, provided a revolving line of credit facility (as amended, the "Revolving Facility") allowing the us to draw advances up to $15 million.

The Revolving Facility includes a number of customary and restrictive financial covenants including maintaining certain minimum cash levels with the lender.

On December 8, 2023, we entered into the Seventh Amendment to the Loan Agreement, which increased the line of credit to $20.0 million, extended the maturity date from December 31, 2024 to December 31, 2025, and increased the annual facility fee to $60 thousand from $45 thousand, payable each December 31st.

On December 8, 2023, we entered into the Seventh Amendment to the Loan Agreement, which increased the line of credit to $20 million.

The Revolving Facility bears an annual facility fee of $60 thousand, payable each December 31st.

Advances under the Revolving Facility bear a variable annual interest rate equal to one half of one percentage point (0.50%) above the prime rate.

On December 29, 2024, we had an $18 million outstanding balance on the Revolving Facility with an interest rate of 8.00%.

On March 14, 2025, we entered into the Eighth Amendment to the Loan Agreement, which extended the loan maturity date for one year from December 31, 2025 to December 31, 2026.

On December 28, 2025, we had a $15.0 million outstanding balance on the Revolving Facility with an interest rate of 7.25%.

On December 29, 2024, we had an $18.0 million outstanding balance on the Revolving Facility with an interest rate of 8.00%.

We were in compliance with all loan covenants under the Loan Agreement, as of the end of the current reporting period.

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.

Se e Note 7 to the consolidated fi nancial statements for additional information.

See Note 8 to the consolidated financial statements for additional information regarding our Loan Agreement and other debt obligations.

In accordance with ASC 205-40, Presentation of Financial Statements - Going Concern , we evaluated whether conditions or events, considered in the aggregate, raise concerns about our ability to meet our obligations as they become due within one year after the date that the consolidated financial statements are issued.

As part of this evaluation, we identified conditions and events related primarily to the maturity of our current revolving credit facility on December 31, 2026.

We have concluded that we will have sufficient liquidity to meet our obligations as they become due within one year after the date the consolidated financial statements are issued.

In anticipation of the maturity of the current revolving credit facility, we signed a term sheet with Sunflower Bank, N.A., who has approved with their credit committee, a $10 million credit facility where parties have agreed upon all material terms, with a maturity date that extends beyond one year after the date the consolidated financial statements are issued.

We expect to execute definitive agreements with Sunflower Bank, N.A.

during the second quarter.

Common Stock Offerings

On March 6, 2025, we entered into common stock purchase agreements with certain institutional investors for the sale of an aggregate of 256 thousand shares of common stock in a registered direct offering pursuant to an effective shelf registration statement on Form S-3.

These share placements resulted in gross proceeds of approximately $1.5 million.

Issuance costs related to the offering are accounted for as a reduction in proceeds, and they were immaterial.

Refer to Note 16 to the consolidated financial statements for additional information.

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

On December 5, 2024, we 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.

Issuance costs related to the offering were $27 thousand and are accounted for as a reduction in proceeds.

On March 13, 2024, we 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.

February 25, 2025, we entered into an At Market Sales Agreement (the "Sales Agreement") with Needham & Company, LLC, as sales agent (the "Agent").

Pursuant to the Sales Agreement, we are able to offer and sell, from time to time, through the Agent, shares of the Company's common stock, par value of $0.001 per share, having an aggregate offering price of up to $20,000,000 (the "ATM Offering").

February 25, 2025 to

August 14, 2025, we sold

713 thousand shares under the ATM Offering, resulting in net cash proceeds of approximately

$4.2 million.

Issuance costs related to the ATM Offering were

$339 thousand.

March 6, 2025, we entered into common stock purchase agreements with certain institutional investors and their affiliated entities for the sale of an aggregate of

256 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

$1.5 million.

Issuance costs related to the offering were

$20 thousand.

August 14, 2025, we filed a new Registration Statement on Form S-3 (File No 333-289610) ("New Registration Statement") with the SEC to replace our expiring Registration Statement on Form S-3, under which we 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 in an aggregate amount of up to $125,000,000.

Our registration statement became effective August 22, 2025.

In connection with the New Registration Statement, we filed a sales agreement prospectus whereby we amended, restated, and renewed our ATM program allowing us to sell an aggregate offering price of up to $20,000,000 (the "Amended ATM Offering").

We also amended and restated our At Market Sales Agreement with the Agent on August 14, 2025.

The $20,000,000 of shares of our common stock that may be sold under the Amended ATM Offering is included in the $125,000,000 of our securities that may be sold under the New Registration Statement.

From August 14, 2025 through Fiscal Year ended

December 28, 2025, we sold

487 thousand shares under the Amended ATM Offering, resulting in net cash proceeds of approximately

$3.1 million.

Issuance costs related to the Amended ATM Offering were

$98 thousand.

Issuance costs for the our ATM Offering and Amended ATM Offering are recorded on a pro-rata basis reflective of the percentage of shares sold to total shares available for sale under the ATM Offering and Amended ATM Offering, respectively.

December 5, 2024, we 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.

Issuance costs related to the offering were $27 thousand.

On March 21, 2023, we 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.

On September 14, 2022 and February 9, 2022, we 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.

On August 17, 2022, we filed a new Registration Statement on Form S-3 with the SEC to replace a previously expired Registration on Form S-3, under which we 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.

Our registration statement became effective on August 26, 2022.

See N ote 11 to the consolid ated financial statements for additional information.

On March 13, 2024, we entered into common stock purchase agreements with certain institutional investors for the sale of an aggregate of 223 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 $3.5 million.

Issuance costs related to the offering were $24 thousand.

See N ote 12 to the consolid ated financial statements for additional information regarding our common stock offerings, such as purchase price of shares sold.

As of December 28, 2025, most of our cash and cash equivalents were invested in a Heritage Bank money market account.

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Net Cash provided by (used in) Operating Activities

In Fiscal Year 2025, net cash used in operating activities was $3.3 million, which was primarily due to the Company's net loss of $14.8 million and changes in working capital of $0.7 million, which consisted of a decrease in accounts payable of $1.8 million, a decrease in deferred revenue of $0.4 million, an increase in accounts receivable of $0.4 million, and a decrease in lease liabilities of $0.3 million, partially offset by a decrease in contract assets of $2.5 million and an increase in accrued liabilities of $0.2 million.

The Company's net loss and changes in working capital were partially offset by non-cash charges of $12.3 million.

Non-cash charges primarily consisted of depreciation and amortization of long-lived assets and certain definite-lived intangible assets of $5.7 million, stock-based compensation expense of $3.3 million, impairment of assets held by SensiML disposal group of $2.4 million, impairment of investments in non-affiliates of $0.3 million, and write-down of inventories of $0.6 million

In Fiscal Year 2024, net cash provided by operating activities was $27 thousand, which was primarily due to non-cash charges of $8.9 million.

Non-cash charges primarily consisted of stock-based compensation expense of $4.6 million, depreciation and amortization of long-lived assets and certain definite-lived intangible assets of $3.9 million, and write-down of inventories of $0.1 million.

Non-cash charges were partially offset by a net loss of $3.8 million and changes in working capital of $4.7 million.

Changes in working capital consisted of a decrease in trades payable of $3.6 million, a decrease in accrued liabilities of $1.1 million, an increase in accounts receivable of $0.8 million, a decrease in deferred revenue of $0.6 million, and a decrease in lease liabilities of $0.3 million, partially offset by a decrease in contract assets of $0.9 million, a decrease in other assets of $0.6 million, and a decrease in inventories of $0.3 million.

Historically, our operating cash flows represented cash used in operating activities.

In Fiscal Year 2023, net cash provided by operating activities was $4.8 million, which was primarily due to non-cash charges of $5.3 million.

Non-cash charges primarily consisted of stock-based compensation expense of $2.5 million, depreciation and amortization of long-lived assets and certain definite-lived intangible assets of $2.2 million, and write-down of inventories of $0.6 million.

Non-cash charges consisted of stock-based compensation expense of $4.6 million, depreciation and amortization of long-lived assets and certain definite-lived intangible assets of $4.2 million, and write-downs of inventories of $0.1 million.

Non-cash charges were partially offset by a net loss of $3.8 million and changes in working capital of $5.1 million.

Changes in working capital consisted of an increase in contract assets of $1.6 million, an increase in other assets of $1.2 million, and a decrease in lease liabilities of $0.4 million, partially offset by a decrease in accounts receivable of $1.0 million, an increase in accrued liabilities of $1.0 million, and an increase in deferred revenue of $0.8 million.

Historically, our operating cash flows represented cash used in operating activities.

Changes in working capital consisted of a decrease in trades payable of $3.6 million, a decrease in accrued liabilities of $1.1 million, an increase in accounts receivable of $0.8 million, a decrease in deferred revenue of $0.6 million, and a decrease in lease liabilities of $0.3 million, partially offset by a decrease in contract assets of $0.9 million, a decrease in inventories of $0.3 million, and a decrease in other assets of $0.2 million.

Net Cash provided by (used in) Investing Activities

Net cash used in investing activities in Fiscal Year 2025 was approximately $3.7 million, which was primarily attributable to capital expenditures related to property and equipment of $3.2 million and the capitalization of internal-use software in the amount of $0.5 million.

Net cash used in investing activities in Fiscal Year 2024 was approximately $6.5 million, which was primarily attributable to capital expenditures related to property and equipment of $5.4 million, $0.1 million in expenditures related to intangible assets, and the capitalization of internal-use software in the amount of $1.1 million, partially offset by stock-based compensation capitalized to property and equipment and internal-use software in the amount of $9 thousand and $149 thousand, respectively.

Net cash used in investing activities in Fiscal Year 2023 was approximately $6.3 million, which was primarily attributable to capital expenditures primarily related to property and equipment of $5.6 million and the capitalization of internal-use software in the amount of $1.0 million, partially offset by stock-based compensation capitalized to internal-use software in the amount of $0.2 million.

Net Cash provided by (used in) Financing Activities

In Fiscal Year 2025, net cash provided by financing activities was $3.9 million, primarily attributable to net proceeds from the issuance of common stock in the amount of $9.1 million, partially offset by $2.2 million in payments related to financing arrangements primarily for tooling related to revenue contracts with customers and $3.0 million in greater payments than borrowings on the Company's revolving line of credit.

In Fiscal Year 2024, net cash provided by financing activities was $3.7 million, primarily attributable to proceeds from the issuance of common stock in the amount of $7.1 million, partially offset by $1.4 million in payments related to financing arrangements primarily for tooling related to revenue contracts with customers and $2.0 million in greater payments than borrowings on the Company's revolving line of credit.

In Fiscal Year 2023, net cash provided by financing activities was $6.9 million, primarily attributable to an increase in our revolving credit facility in the amount of $5.0 million and proceeds from the issuance of common stock in the amount of $2.5 million, partially offset by $0.7 million in payments related to financing arrangements primarily for tooling related to revenue contracts with customers.

We require substantial cash to fund our business.

However, we believe that our existing cash and cash equivalents, together with available financial resources from the revolving facility will be sufficient to satisfy our operations and capital expenditures over the next twelve months.

However, we believe that our existing cash and cash equivalents, together with available financial resources from the Revolving Facility and our Amended ATM Offering, will be sufficient to satisfy our operations and capital expenditures over the next twelve months.

Our revolving facility will expire on December 31, 2026.

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The current maturity date on our Revolving Facility is December 31, 2026.

See Note 7 to th e consolidated financial statements for additional information.

See Note 8 to the consolidated financial statements for additional information.

Certain wafer manufacturers require us to forecast wafer starts several months in advance.

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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 7. Management’s Discussion and Analysis