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Item 8. Financial Statements and Supplementary Data

2026-03-27 compared with 2025-03-26 · 525 added, 446 removed, 898 unchanged (52% of the section changed)

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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:

LLP, PCAOB ID:

Consolidated Balance Sheets as of December 28, 2025 and December 29, 2024

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To the Board of Directors and

Shareholders of QuickLogic Corporation

Stockholders 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.

We have audited the accompanying consolidated balance sheets of QuickLogic Corporation and Subsidiaries (collectively, the “Company”) as of December 28, 2025 and December 29, 2024, and the related consolidated statements of operations, stockholders’ equity, and cash flows, for the years 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 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the two years ended December 28, 2025, 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 audit.

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

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.

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

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

We conducted our audits 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 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.

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.

Accordingly, we express no such opinion.

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.

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 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 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

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

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.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(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 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, 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.

Assessing the appropriateness of the formulaic calculation and management adjustments by product type.

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

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.

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 matter or on the accounts or disclosures to which it relates.

Revenue Recognition of Professional Services Contracts

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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:

Our audit procedures related to the 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.

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

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

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

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

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March 27, 2026

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.

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.

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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Current assets:

Cash and cash equivalents and restricted cash

Cash and cash equivalents

$ 18,840 $ 21,859

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

Accounts receivable

Contract assets

Note receivable

Prepaid expenses and other current assets

Assets of business held for disposal, net

Total current assets

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Property and equipment, net

18,233 15,699

Capitalized internal-use software, net

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Note receivable, non-current

Assets of business held for disposal, net

$ 44,804 $ 51,933

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Lease liabilities, current

Liabilities of business held for disposal

Total current liabilities

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Notes payable, non-current

Other long-term liabilities

Total liabilities

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(in thousands, except per share amounts)

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

Impairment charges

Restructuring costs

Operating income (loss)

( 3,431 ) 70 ( 3,800 )

Interest expense

( 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

Income (loss) from continuing operations before income taxes

(Benefit from) provision for income taxes

Net income (loss) from continuing operations

Net income (loss) from discontinued operations, net of taxes

Net income (loss)

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

Net income (loss) from continuing operations per share:

Net income (loss) per share:

Basic and diluted

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

Weighted average shares:

Basic and diluted

14,510 13,453 12,588

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

Additionally, the Company notes that income taxes related to discontinued operations were immaterial in nature for the periods presented and as such, only net income (loss) from discontinued operations was reported in the consolidated statements of operations.

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

( 4 ) 16 ( 9 )

Impairment of investment in non-affiliate

Impairment of assets held by SensiML entity

Expected credit loss expense

Non-cash interest expense

Loss on disposal of equipment

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

( 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:

Supplemental schedule of non-cash investing and financing activities from continuing operations:

Purchases of assets with financing arrangements

$ 3,107 $ 1,116 $ 650

Stock-based compensation capitalized as internal-use software

$ 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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Total Stockholders'

Balance at January 2, 2022

11,863 $ 12 $ 310,222 $ ( 301,025 ) $ 9,209

Common stock issued under stock plans and employee stock purchase plans

542 — 253 — 253

Common stock offering, net of issuance costs

797 1 4,664 — 4,665

Stock-based compensation

— — 2,035 — 2,035

— — — ( 4,267 ) ( 4,267 )

Balance at January 1, 2023

13,202 13 317,174 ( 305,292 ) 11,895

Balance at December 31, 2023

Common stock issued under stock plans and employee stock purchase plans

466 1 199 — 200

Common stock offering, net of issuance costs

450 — 2,293 — 2,293

Stock-based compensation

— — 2,770 — 2,770

— — — ( 263 ) ( 263 )

Balance at December 29, 2024

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

Common stock issued under stock plans and employee stock purchase plans

572 — 310 — 310

Common stock offering, net of issuance costs

646 1 6,758 — 6,759

Stock-based compensation

— — 4,764 — 4,764

— — — ( 3,841 ) ( 3,841 )

Balance at December 28, 2025

15,336 $ 15 $ 334,268 $ ( 309,396 ) $ 24,887

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

NOTE 1 — THE COMPANY AND BASIS OF PRESENTATION

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

The Company provides innovative, programmable silicon and software platforms to enable its customers to develop custom hardware products in a fast time-to-market and cost-effective way.

Specifically, QuickLogic is 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.

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

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

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

The Company licenses its eFPGA IP to semiconductor companies for integration into application-specific integrated circuits ("ASICs") and system-on-chips ("SoCs") devices, and also develops and sells programmable logic semiconductor devices, including discrete FPGAs.

These technologies enable customers to incorporate configurable hardware functionality into custom semiconductor devices and electronic systems.

The Company's programmable logic technologies are used in a variety of markets, including aerospace and defense systems, industrial and infrastructure systems, computing platforms, and semiconductor devices developed by fabless semiconductor companies.

The Company's products, software tools, and IP enable customers to efficiently implement programmable hardware functionality within custom semiconductor designs and system-level products.

In the first quarter of 2025, the Company discontinued operations at its wholly-owned subsidiary, SensiML Corporation ("SensiML"), and began actively exploring options for the possible sale of SensiML or its assets.

Furthermore, the Company started accounting for the SensiML subsidiary in accordance with ASC 205 - 20, Discontinued Operations.

At the balance sheet date of December 28, 2025, the Company impaired all of the SensiML non-cash assets to a zero value and redesignated SensiML as a disposal asset within Discontinued Operations in accordance with ASC 205 - 20 and ASC 360 - 10.

Furthermore, the Company has incurred $ 0.2 million in costs in connection with the planned disposition of SensiML in the Fiscal Year ended December 28, 2025.

These costs consisted primarily of one -time termination benefits and are split between the ‘Restructuring Costs’ line item and ‘Net Income (Loss) from Discontinued Operations, Net of Taxes’ line item in the Company’s consolidated statements of operations.

See Note 3 for additional information of discontinued operations.

All other notes to these consolidated financial statements present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented.

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

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

Fiscal Years 2025 and 2024 ended on December 28, 2025 and December 29, 2024 , 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 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").

As of December 28, 2025 , the Company’s principal sources of liquidity consisted of cash and cash equivalents of $ 18.8 million, inclusive of a $ 15 million advance from its Revolving Facility with Heritage Bank of Commerce ("Heritage Bank") and $ 8.7 million in net proceeds from the Company's sale of common stock in the Fiscal Year ended December 28, 2025 .

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 8 for additional information.

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

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

Pursuant to the Sales Agreement, the Company is 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 , the Company 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 , the Company 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-

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$ 1.5 million.

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

Issuance costs related to the offering were

$ 20 thousand.

August 14, 2025 , the Company filed a new Registration Statement on Form S-

289610 ) ("New Registration Statement") with the SEC to replace the Company's expiring Registration Statement 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 in an aggregate amount of up to

$ 125,000,000 .

The Company's registration statement became effective

August 22, 2025.

In connection with the New Registration Statement, the Company filed a sales agreement prospectus whereby the Company amended, restated, and renewed its ATM program, allowing the Company to sell an aggregate offering price of up to

$ 20,000,000 (the "Amended ATM Offering").

The Company also amended and restated its At Market Sales Agreement with the Agent on

August 14, 2025.

$ 20,000,000 of shares of the Company's common stock that

may be sold under the Amended ATM Offering is included in the

$ 125,000,000 of its securities that

may be sold under the New Registration Statement.

August 14, 2025 through Fiscal Year ended

December 28, 2025 , the Company 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 Company's 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 , 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.

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.

Issuance costs related to the offering were $ 27 thousand.

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

Issuance costs related to the offering were $ 24 thousand.

Refer to Note 12 for additional information.

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

Based on past performance and current expectations, the Company believes that its existing cash and cash equivalents, together with

$ 6.8 million gross cash proceeds from the

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

$ 8.7 million in net proceeds from its Fiscal Year

2025 stock offerings, its revenues from operations, and the available financial resources from the Revolving Facility with Heritage Bank or a new debt agreement with an alternative lender, will be sufficient to fund its operations and capital expenditures and provide adequate working capital for the next

twelve months.

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 was 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 was due and payable to the Company.

If an event of default occurred, the interest rate would increase to 15.31 %.

All other terms of the Note remained the same.

As of December 31, 2023 , the related note receivable balance was $ 1.2 million, including $ 37 thousand in accrued interest.

As of December 29, 2024 , the related note receivable balance was $ 1.3 million, including $ 129 thousand in accrued interest.

In the fourth quarter of 2025, the Company signed an agreement that cancelled the Current Note and extinguished the note receivable balance and all accrued interest as of November 10, 2025 in the amount of $ 1.4 million, which included $ 240 thousand in accrued interest, in exchange for an irrevocable license to utilize software components owned by the customer into future releases of the Company's Aurora FPGA User Tools.

The irrevocable license is being accounted for under ASC 360 and is included within the 'Property and Equipment, net' line item on the Company's consolidated balance sheet.

The Company notes this was a non-cash transaction;

an exchange of a non-cash asset, the note receivable, for another non-cash asset, a software license.

Refer to the Company's consolidated statements of cash flows for additional information on cash paid for the acquisition of tangible and intangible assets.

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

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

Management has concluded that the Company will have sufficient liquidity to meet its 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, management 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.

The Company expects to execute definitive agreements with Sunflower Bank, N.A.

during the second quarter.

Various factors affect the Company’s liquidity, including, among others:

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market acceptance of existing and new products including solutions based on the Company's ArcticLink® and PolarPro® platforms, ArcticPro™, EOS

S3 SoC, Quick AI solution, QuickAI™, SensiML Analytics Toolkit, Eclipse II products, and eFPGA IP license and professional services;

S3 SoC, Eclipse II products, and eFPGA IP license and professional services;

fluctuations in revenue as a result of product end-of-life;

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and other factors related to the uncertainties of the industry and global economics.

Over the longer term, the Company anticipates that sales generated from its new product offerings, existing cash and cash equivalents, together with financial resources from its Revolving Facility with Heritage Bank, assuming renewal of the Revolving Facility or the Company entering into a new debt agreement with an alternative lender prior to the expiration of the revolving line of credit on

Over the longer term, the Company anticipates that sales generated from its new product offerings, existing cash and cash equivalents, together with financial resources from its Revolving Facility with Heritage Bank, assuming renewal of the Revolving Facility or entry into a new debt agreement with an alternative lender prior to the expiration of the revolving line of credit on

December 31, 2026 , and its ability to raise additional capital in the public capital markets will be sufficient to satisfy its operations and capital expenditures.

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The Company believes that it applies 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 the Company's financial statements.

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

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification ("ASC") Topic 606 and related Accounting Standards Updates ("ASUs").

The Company earns revenue from principal activities by (i) delivering standard hardware products, (ii) 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.

The Company earns 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, the Company applies a five -step model for recognizing revenue

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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 the Company's 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 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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eFPGA IP Revenue

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

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

The Company recognizes eFPGA intellectual property revenue from licensing its eFPGA intellectual property to customers and recognizes eFPGA-related professional services revenue from the fees associated with the custom development and integration of the Company's technology solutions into hardware products.

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

SaaS & 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 the Company licenses its software to customers and allows customers to access the software over a short-term subscription basis.

The Company grants the customer the right to access and use software at the outset of the arrangement and throughout the entire term of the arrangement.

The Company recognizes SaaS revenue ratably over the license term.

The Company recognizes revenue from software-related professional services as services are provided to the customer.

Other Miscellaneous Revenue

Other miscellaneous revenue is comprised primarily of royalties from licensing the Company’s technology.

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Although the Company makes every effort to ensure the accuracy of its 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 its inventory and its 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 goodwill is not amortized but is annually tested for impairment during the Company's fourth fiscal quarter, and more often if there is an indicator of impairment.

The Company either performs 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 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 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 the Company's 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.

The Company's annual goodwill impairment test performed in the fourth quarter of Fiscal Year 2024 indicated that no impairment was identified.

As of December 28, 2025, the Company 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, the Company 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, the Company 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 its evaluation, the Company 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

The Company’s long-lived assets include property and equipment, software, tooling, furniture and fixtures, leasehold improvements, and internal-use software.

The Company’s 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.

The Company notes the estimation of the useful lives of its long-lived assets involves judgment and estimation by management.

In the determination of an asset’s useful life, the Company considers 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, the Company considers 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 the Company's long-lived assets.

The Company recognizes 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.

The Company recognizes 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.

Refer to Note 5 for additional information.

The Company capitalizes costs related to the development and enhancement of hosted services it provides to its 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.

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.

The Company capitalizes 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.

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.

The Company assesses possible impairment based on its 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 its long-lived 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 2024 and 2023 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 2024 and 2023 , there were no indicators of impairment that gave cause for additional impairment testing of the Company’s long-lived 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 .

The Company reviews the recoverability of its 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, the Company considers changes in legal factors, the business climate, technological obsolescence, and competitive conditions.

The Company's annual impairment assessments performed in the fourth quarters of Fiscal Years 2025 and 2024 indicated that no impairment of long-lived or intangible assets held by continuing operations was identified.

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

As a result of this classification, the Company 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 its evaluation, the Company 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, the Company recognized a loss of $5 thousand on the disposal o f equipment in the Fiscal Year December 28, 2025 .

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

NOTE 2 — OTHER RELEVANT ACCOUNTING POLICIES

Cash Equivalents and Restricted Cash

Cash Equivalents

The Company considers all short-term, highly liquid investments with an original or a remaining maturity at purchase of ninety days or less to be cash equivalents.

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The Company’s investment portfolio consists of money market accounts and funds.

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

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 $ 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.

The Company had contract asset s associated with eFPGA-related revenues of approximately $ 0.2 million, $ 2.7 million, and $ 3.6 million and contract liabilities (reflected as deferred revenue) associated with eFPGA-related revenue s of $ 0.1 million, $ 0.4 million, and $ 1.0 million on the consolidated balance sheets at December 28, 2025 , December 29, 2024 , and December 31, 2023 , respectively.

Assets Recognized from Costs to Obtain a Contract with a Customer

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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 and contract assets.

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.

As of December 31, 2023 and December 29, 2024, 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 statements 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.

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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.

During the Fiscal Year ended December 28, 2025, the Company cancelled the Current Note for its financing receivable in exchange for a software license.

Refer to Note 1 and Note 10 for additional information.

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.

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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.

As of December 28, 2025 and December 29, 2024 , the allowance for credit losses was $ 0 thousand in its consolidated balance sheets.

No credit loss expense was recognized for the Fiscal Years ended December 28, 2025 and December 29, 2024 .

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

Under ASC 842, all significant lease arrangements are generally recognized at the lease commencement date.

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

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

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.

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The Company does not apply lease recognition requirements to lease arrangements having terms of twelve months or less.

Instead, it recognizes payments in the consolidated statement of operations as rental costs on a straight-line basis over the lease term.

Instead, it recognizes payments in the consolidated statements of operations as rental costs on a straight-line basis over the lease term.

The Company has lease agreements which contain lease and non-lease components;

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The carrying value of cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to their relatively short maturities.

The Company's financial assets consisting of an investment in non-marketable equity without a readily determinable fair value are measured under a measurement election alternative to the requirement to carry equity interests at fair value.

The Company's financial assets as of Fiscal Year ended December 29, 2024 consisted of an investment in non-marketable equity without a readily determinable fair value.

In the Fiscal Year ended January 2, 2022, the Company recognized revenue from a contractual arrangement with an unaffiliated customer on the sale of eFPGA IP.

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In determining the fair value of the investment at acquisition of the common stock, the Company applied the Black-Scholes Option Pricing model using a back-solve technique and applied significant judgment to quantify inputs used in the model, in accordance with the AICPA Accounting and Valuation Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation ( 2013 ) .

The Company has neither significant influence nor control over the investee.

Post-acquisition, the Company accounts for the non-marketable equity investment under a practical expedient under ASC 321, in which equity investments without a readily determinable fair value are measured to fair value at “cost minus impairment.” Under the “cost minus impairment” method, when the non-marketable equity investment is determined to be impaired on the basis of a qualitative assessment, the carrying value of the non-marketable equity security is adjusted to fair value and is measured at cost, less any impairment.

The Company reviews its non-marketable equity investment for impairment periodically.

The carrying value of non-marketable equity securities is classified within Level 3 of the fair value hierarchy.

Any losses, should they occur, from impairments of non-marketable equity investments are recorded in the statements of operations within interest income and other (expense) income, net.

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 29, 2024 and December 31, 2023 .

The Company had neither significant influence nor control over the investee.

Post-acquisition, the Company accounted for the non-marketable equity investment under a practical expedient under ASC 321, in which equity investments without a readily determinable fair value are measured to fair value at “cost minus impairment.” Under the “cost minus impairment” method, when the non-marketable equity investment is determined to be impaired on the basis of a qualitative assessment, the carrying value of the non-marketable equity security is adjusted to fair value and is measured at cost, less any impairment.

The carrying value of non-marketable equity securities was classified within Level 3 of the fair value hierarchy.

The Company reviewed its non-marketable equity investment for impairment periodically.

Any losses, should they occur, from impairments of non-marketable equity investments were to be recorded in the statements of operations within interest income and other (expense) income, net.

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

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

In the second quarter of 2025, the Company determined there were observable indicators of impairment for its non-marketable equity investment.

As such, the Company realized a full impairment of its non-marketable equity investment in the amount of $ 0.3 million.

See Note 10 for additional information.

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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.

To have a controlling financial interest, the reporting entity must have the power to direct the activities of a VIE that most significantly 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.

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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.

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

In the second quarter of 2025, the Company realized a full impairment of its equity investment in the unaffiliated entity.

Refer to Note 10 for additional information.

Cost of Revenues

The Company records costs of revenue associated with hardware product revenues, eFPGA IP revenue, and SaaS revenue.

The Company records costs of revenues associated with hardware product revenue and eFPGA IP revenue.

Hardware product costs include the cost of materials, contract manufacturing fees, shipping costs, and quality assurance.

Hardware product costs also include indirect costs such as warranty, excess and obsolete inventory charges, general overhead costs, and depreciation and amortization of certain capitalized software.

eFPGA IP and SaaS costs include costs related to services under contractual agreements over the term of their respective agreements.

eFPGA IP costs include costs related to services under contractual agreements over the term of their respective agreements.

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.

The Company allocated $ 7.6 million and $ 4.8 million of R&D expenses associated with the performance of its revenue contracts to costs of revenues in the 2025 and 2024 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 29, 2024 , December 31, 2023 , and January 1, 2023 .

The Company does not have significant product warranty-related costs or liabilities for the Fiscal Years ended December 28, 2025 and December 29, 2024 .

Foreign Currency Transactions

All of the Company’s revenue transactions and inputs to its cost of revenue are denominated in U.S.

All of the Company’s revenue transactions and inputs to its cost of revenues are denominated in U.S.

The Company conducts sales and marketing activities in various countries outside of the United States.

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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 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 impact from foreign currencies was not significant for each of the Fiscal Years ended December 28, 2025 and December 29, 2024 .

Operating expenses denominated in foreign currencies represented approximately 7 % and 7 % of t otal operating expenses for the Fiscal Years ended December 28, 2025 , and December 29, 2024 , respectively.

The Company incurred a majority of such foreign currency expenses in the United Kingdom, Taiwan, and Japan in the Fiscal Years ended December 28, 2025 and December 29, 2024 .

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

Advertising and promotion expense s were $ 81 thousand and $ 42 thousand for the Fiscal Years ended December 28, 2025 and December 29, 2024 , 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.

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

The Company recognized $ 0.2 million and $ 0.1 million in associated matching contribution expenses for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

Stock-Based Compensation

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The expected stock price volatility for both stock options and ESPP shares is based on the historic volatility of the Company's stock, using the daily average of the opening and closing prices, and measured using historical data appropriate for the expected term.

The risk-free interest rate assumption approximates the risk-free interest rate of a Treasury Constant Maturity bond with a maturity appropriate for the expected term of stock awards under the Plan or the maturity appropriate for the term of the purchase period for the ESPP Plan.

The dividend yield assumption is based on the Company's intent not to issue a dividend under its dividend policy.

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As of December 29, 2024, the Company had one note receivable related to the conversion of accounts receivable for a customer.

Interest is accrued as earned and is reflected as an increase in the balance of the note receivable, as well as recognized as interest income on the Company's consolidated statement of operations.

All accrued and unpaid interest will be due and payable to the Company on the maturity date of the note receivable.

Refer to Note 9 for additional information.

Interest was accrued as earned and is reflected as an increase in the balance of the note receivable, as well as recognized as interest income on the Company's consolidated statements of operations.

As of December 28, 2025, the Company cancelled the Current Note for its financing receivable in exchange for a software license.

Refer to Note 1 and Note 10 for additional information.

Accounting for Income Taxes

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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.

The net income (loss) in the consolidated statements of operations for each of the Fiscal Y ears ended December 28, 2025 and December 29, 2024 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 sheets.

Concentrations of Credit and Suppliers

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents and accounts receivable.

Cash and cash equivalents are maintained with high-quality institutions.

Cash and cash equivalents are maintained with high-quality institutions, however, the Company regularly maintain cash balances at these financial institutions in amounts exceeding the Federal Deposit Insurance Corporation ("FDIC") insurance limit.

The Company’s accounts receivables are denominated in U.S.

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Subsequent changes to the fair value of such assets acquired and liabilities assumed are recognized in earnings, after the expiration of the measurement period, a period not to exceed 12 months from the acquisition date.

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.

Acquisition-related expenses and acquisition-related restructuring costs are recognized in the consolidated statements of operations in the period in which they are incurred.

SensiML Disposal Group (representing the SensiML business) and Discontinued Operations

SensiML, a wholly-owned subsidiary of the Company acquired in a prior business combination, was previously evaluated as a business held for sale.

fourth fiscal quarter of

2025, the Company determined that the criteria for held-for-sale classification were

no longer met because the anticipated sale of the SensiML business did

not occur within the previously expected time frame and management reassessed the expected timing of a potential disposition.

Accordingly, the Company evaluated the recoverability, or undiscounted cash flows expected to result from the disposal of the SensiML asset group (representing the SensiML subsidiary) and recorded impairment charges that reduced the carrying value of the long-lived and intangible assets and goodwill associated with the SensiML business.

As run-off operations at the SensiML subsidiary concluded in Fiscal Year

2025, the Company determined that a classification of asset group held for disposal for the SensiML subsidiary, in accordance with ASC

10, was appropriate.

Additionally, its results of operations are presented as discontinued operations in the consolidated financial statements.

Losses recognized during Fiscal Year

2025 primarily relate to impairment charges recorded in connection with the evaluation of the recoverability of the SensiML asset group, as well as limited ongoing costs to maintain certain infrastructure and administrative functions pending disposition of the business.

The Company continues to pursue strategic alternatives for the SensiML business, including a potential sale or other disposition.

Remaining expenses associated with the SensiML business are

not material and primarily relate to minimal infrastructure and administrative costs necessary to maintain the entity and its technology environment pending disposition.

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

3 for additional information regarding the disposal group and the related impairment charges.

Recent Accounting Standards Adopted

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 .

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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

The Company adopted ASU No.

2024 - 02 prospectively on December 30, 2024 and it had no material impact on the Company's consolidated financial statements or related disclosures.

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 Company adopted ASU No.

2023 - 09 prospectively on December 30, 2024 for its annual fiscal year ending December 28, 2025.

Refer to Note 11 for additional information.

New Accounting Pronouncements Pending Adoption

In December 2025, the FASB issued ASU 2025 - 12, Codification Improvements to make improvements to the Codification arising from technical corrections, unintended application of the Codification, and clarifications.

For all entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods.

Early adoption is permitted.

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

The adoption of ASU 2025 - 12 is not expected to have a significant impact on the Company's consolidated financial statements.

In December 2025, the FASB issued ASU 2025 - 11, Interim Reporting (Topic 270 ):

Narrow Scope Improvements to improve the navigability of the interim reporting guidance in ASC 270 and clarify when it applies.

For public business entities, the amendments in this Update are effective for interim reporting periods within annual reporting 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 2025 - 11 is not expected to have a significant impact on the Company's consolidated financial statements.

In September 2025, the FASB issued ASU 2025 - 06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350 - 40 ) to modernize the accounting for software costs that are accounted for under Subtopic 350 - 40, Intangibles - Goodwill and Other - Internal-Use Software .

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

Early adoption is permitted as of the beginning of an annual reporting period.

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

The adoption of ASU 2025 - 06 is not expected to have a significant impact on the Company's consolidated financial statements.

In July 2025, the FASB issued ASU 2025 - 05, Measurement of Credit Losses for Accounts Receivable and Contract Assets to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606.

For all entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2025 and interim periods within those annual reporting periods.

Early adoption is permitted.

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

The adoption of ASU 2025 - 05 is not expected to have a significant impact on the Company's consolidated financial statements.

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

NOTE 3 — DISCONTINUED OPERATIONS

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

This decision by the Company and its 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 QuickLogic's eFPGA IP and ruggedized FPGA business, the Company will focus all of its resources on leveraging and growing the cornerstones of its 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 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.

Preliminary discussions commenced with potential strategic partners regarding the possible sale of SensiML of its assets throughout Fiscal Year 2025.

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

During Fiscal Year 2025, the Company continued to evaluate strategic alternatives for SensiML, including a potential sale of the business or its underlying technology assets.

As of December 28, 2025, the Company determined that the anticipated sale of SensiML had not occurred within the originally expected time frame and management reassessed the expected timing of a potential disposition.

As run-off operations at the SensiML subsidiary concluded in Fiscal Year 2025, the Company determined that a classification of asset group held for disposal for the SensiML subsidiary, in accordance with ASC 360 - 10, was appropriate.

Additionally, its results of operations are presented as discontinued operations in the consolidated financial statements.

As a result of this reassessment, the Company evaluated the recoverability, or undiscounted cash flows expected to result from the disposition of the SensiML asset group (representing the SensiML subsidiary), including capitalized internal-use software, identifiable intangible assets, and goodwill associated with the SensiML acquisition.

Based on this evaluation, the Company recorded impairment charges of approximately $ 2.4 million during the Fiscal Year 2025 to reduce the carrying value of these assets.

During Fiscal Year 2025, in connection with the evaluation of the recoverability of the SensiML asset group, the Company forgave approximately $ 7.9 million of intercompany payables owed by SensiML to the parent company.

As of December 29, 2024, SensiML owed approximately $ 7.2 million to the parent company.

Intercompany payables owed by SensiML to the Company are primarily related to historical funding of operations and development activities.

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.

The transaction had no impact on the Company's consolidated financial statements, as the intercompany balances were eliminated in consolidation.

Additionally, the forgiveness of the intercompany payable represented a non-cash capital contribution and had no impact to the Company's consolidated statements of cash flows.

Following the impairment, the remaining assets of the SensiML business were reduced to nominal amounts consisting of cash balances.

Operations of the SensiML business have substantially ceased, and the losses recognized in Fiscal Year 2025 primarily related to the impairment charges recorded during the year, as well as limited ongoing costs required to maintain certain infrastructure and administrative functions pending disposition of the business.

These costs primarily consist of minimal hosting, insurance, information technology support, and facility-related expenses.

The Company continues to pursue strategic alternatives for the SensiML business, including a potential sale or other disposition of the entity or its underlying technology assets.

The material reduction in assets presented below primarily reflects impairment charges recorded during Fiscal Year 2025 in connection with the evaluation of the recoverability of the SensiML asset group.

The following table provides details relating to major classes of assets and liabilities of the SensiML disposal group presented as discontinued operations, excluding intercompany balances that are eliminated in consolidation, as of December 28, 2025 and December 29, 2024 (in thousands):

Current assets:

Accounts receivable, net of allowance for credit losses of $ 0 and $ 30 , as of December 28, 2025 and December 29, 2024, respectively

Total current assets

Capitalized internal-use software, net

Intangible assets, net

Current liabilities:

Trade payables

Accrued liabilities

Deferred revenue

Total current liabilities

TOTAL LIABILITIES

The following table provides details relating to internal-use software held by the SensiML disposal group as of December 29, 2024 (in thousands):

Capitalized internal-use software, net:

Capitalized internal-use software

Accumulated amortization

The following table provides details relating to intangible assets held by the SensiML disposal group as of December 29, 2024 (in thousands):

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Developed technology

$ 959 $ ( 575 ) $ 384

Customer relationships

Trade names and trademarks

116 ( 70 ) 46

Total intangible assets related to discontinued operations

$ 1,156 $ ( 726 ) $ 430

The Company recorded depreciation and amortization expense for discontinued operations of $ 0.0 million and $ 0.8 million for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

No interest was capitalized for any period presented.

As of January 7, 2025, depreciation and amortization of assets held by SensiML was discontinued in accordance with ASC 205.

Depreciation and amortization expense for the Fiscal Years ended December 28, 2025 and December 29, 2024 included approximately $ 0 and $ 0.7 million, respectively, of amortization expense related to capitalized internal-use software.

For its trades receivable, the Company provides an allowance for credit losses based on historical experience and a specific identification basis.

As of December 28, 2025 , December 29, 2024 , and December 31, 2023 , the allowance for credit losses from discontinued operations was $ 0 thousand, $ 30 thousand, and $ 34 thousand, respectively.

The Company recorded credit loss expense in discontinued operations of $ 7 thousand and $ 6 thousand for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

Accounts receivable related to discontinued operations, net of allowances for credit losses, was $ 2 thousand as of December 31, 2023 .

The following table provides details relating to major line items constituting income (loss) for the SensiML group, classified as discontinued operations, for the Fiscal Years ended December 28, 2025 and December 29, 2024 (in thousands):

Cost of revenue

Gross profit (loss)

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

( 2,481 ) ( 936 )

(Benefit from) provision for income taxes

Net income (loss) from discontinued operations

$ ( 2,481 ) $ ( 936 )

Net income (loss) from discontinued operations per share:

$ ( 0.15 ) $ ( 0.06 )

Weighted average shares outstanding:

16,243 14,510

The Company has incurred $ 0.1 million in costs in connection with the planned disposition of SensiML in the Fiscal Year ended December 28, 2025 .

These costs primarily consist of one -time termination benefits and are included within the 'Restructuring Costs' line item in the table above.

The Company does not expect total costs incurred in connection with the disposal of SensiML to differ materially from the expenses already recognized in the Fiscal Year ended December 28, 2025 .

Contract liabilities related to discontinued operations were $ 0 , $ 10 thousand, and $ 21 thousand as of December 28, 2025 , December 29, 2024 , and December 31, 2023, respectively.

In the Fiscal Year ended December 28, 2025 , all of the $ 10 thousand in deferred revenues related to discontinued operations that were outstanding as of December 29, 2024 were recognized by the Company as revenue.

The following table presents disaggregated revenues for discontinued operations by geographical location for the Fiscal Years ended December 28, 2025 and December 29, 2024 (in thousands).

Revenue attributed to geographic location is based on the destination of the product or service.

All revenues from discontinued operations in North America were in the United States.

North America

Total revenue

The following customers accounted for 10% or more of the Company's revenue from discontinued operations for the Fiscal Years ended December 28, 2025 and December 29, 2024 :

The following customers accounted for 10% or more of the Company's accounts receivable from discontinued operations as of the Fiscal Years ended December 28, 2025 and December 29, 2024 :

The following table provides the expenses from discontinued operations relating to operating leases for the Fiscal Years ended December 28, 2025 and December 29, 2024 (in thousands):

Operating lease costs from discontinued operations:

Stock-based compensation expense from discontinued operations for the Fiscal Years ended December 28, 2025 and December 29, 2024 was as follows (in thousands):

Cost of revenue

Research and development

Selling, general and administrative

$ ( 32 ) $ 107

The Company grants restricted stock units (“RSUs”) and performance restricted stock units ("PRSUs") to employees and directors with various vesting terms.

RSUs entitle the holder to receive, at no cost, one common share for each RSU as it vests.

In general, the Company's policy is to withhold shares in settlement of employee tax withholding obligations upon the vesting of RSUs.

The stock-based compensation expense related to RSUs and PRSUs from discontinued operations was approximately ($ 32 thousand) and $ 105 thousand for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

Total stock-based compensation in discontinued operations related to the Company's Employee Stock Purchase Plan was approximately $ 0 thousand and $ 2 thousand for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

The following table provides cash flows from discontinued operations for the Fiscal Years ended December 28, 2025 and December 29, 2024 (in thousands):

Net cash provided by (used in) operating activities

$ ( 205 ) $ 39

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

The Company capitalized certain stock-based compensation amounts to capitalized internal-use software related to discontinued operations of $ 0 and $ 0.1 million for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

The capitalized stock-based compensation amounts relate to compensation for employees involved in the development of capitalized internal-use software.

NOTE 4 — EARNINGS (LOSS) PER SHARE

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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.

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 year ended January 1, 2023 .

These warrants expired unexercised on May 29, 2023 .

Approximately 0.8 million and 0.7 million shares associated with equity awards and the estimated number of shares to be purchased under the current offering period of the ESPP Plan were outstanding and were not included in the calculation of diluted net loss per share, as they were considered anti-dilutive due to the net loss the Company experienced in the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

NOTE 5 — BALANCE SHEET COMPONENTS

(in thousands)

Inventories, net - current:

Work-in-process

$ 710 $ 1,602

Finished goods

Inventories, net - non-current:

Work-in-process

Finished goods

$ 1,143 $ 1,658

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Software tools

18,428 14,357

Furniture and fixtures

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$ 1,779 $ 1,587

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 majority of the Company's deferred charges balances as of December 28, 2025 and December 29, 2024 relate primarily to the Company's software tools and related subscriptions.

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.

$ 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 .

As of December 28, 2025 and December 29, 2024 , work-in-process ("WIP") inventories, net consist primarily of $ 0.1 million and $ 0.5 million, respectively, of die wafers and $ 0.8 million and $ 1.0 million, respectively, of tested, unmarked devices held for sale, which are completed upon customer orders, and open work orders.

The Company capitalized $ 4.1 million and $ 7.3 million in pre-production design and development costs as tooling to be utilized under its long-term professional services contracts for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

These capitalized assets are owned by the Company.

The Company recorded depreciation and amortization expense of $ 5.4 million and $ 3.2 million for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively .

No interest was capitalized for any period presented.

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 .

D epreciation and amortization expense included approximately $ 0.2 million and $ 0.1 million in amortization expense of capitalized internal-use software for the Fiscal Years ended December 28, 2025 and December 29, 2024 .

Accounts receivable, net of allowances for credit losses of $ 0 thousand, was $ 1.6 million as of December 31, 2023 .

NOTE 6 — PROPERTY, PLANT, AND EQUIPMENT

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NOTE 7 — INTANGIBLE ASSETS

The following table provides the details of the carrying value of intangible assets recorded from the 2019 acquisition of SensiML at December 29, 2024 (in thousands):

December 29, 2024

Remaining Useful Life

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Developed technology

4 $ 959 $ ( 575 ) $ 384

Customer relationships

— 81 ( 81 ) —

Trade names and trademarks

4 116 ( 70 ) 46

Total acquired identifiable intangible assets

$ 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 December 31, 2023 (in thousands):

The following table provides the details of the carrying value of intangible assets capitalized related to the Company's successful defense of its patents in a lawsuit as of December 28, 2025 (in thousands):

December 28, 2025

3 unchanged sentences

Net Carrying Amount

Developed technology

5 $ 959 $ ( 480 ) $ 479

Customer relationships

— 81 ( 81 ) —

Trade names and trademarks

Capitalized patent litigation costs

8 $ 418 $ ( 78 ) $ 339

Total acquired identifiable intangible assets

Total intangible assets related to patents

$ 418 $ ( 78 ) $ 339

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

7 unchanged sentences

$ 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):

The following table provides the details of future annual amortization of intangible assets related to our patents, based upon the current useful lives as of December 28, 2025 (in thousands):

Annual Fiscal Years

6 unchanged sentences

December 8, 2023, the Company entered into the Seventh Amendment to the Loan Agreement, which increased the line of credit to

$ 20 million, extended the maturity date from

December 31, 2024 to

December 31, 2025 , and increased the annual facility fee to

$ 60 thousand from

$ 20 million.

The Revolving Facility bears an annual facility fee of

$ 60 thousand, payable each

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 .

December 29, 2024 , the Company had an

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

one percentage point (

0.50 %) above the prime rate.

March 14, 2025, the Company 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.

December 28, 2025 , the Company had a

$ 15.0 million outstanding balance on the Revolving Facility with an interest rate of

December 29, 2024 , the Company had an

$ 18.0 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

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Financing Arrangements

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 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.

The Company has acquired certain assets consisting of tooling for performance under revenue contracts with customers, with smaller amounts related to IT infrastructure components, which were financed through financing arrangements.

The following table provides details for assets financed through financing arrangements as of December 28, 2025 and December 29, 2024 (in thousands):

Assets purchased through financing arrangements

$ 5,229 $ 4,562

Accumulated depreciation

( 2,315 ) ( 1,219 )

Assets purchased through financing arrangements, net

$ 2,914 $ 3,343

Corresponding note payable for financing arrangements

$ 2,796 $ 3,130

Minimum remaining term for outstanding financing arrangements

Maximum remaining term for outstanding financing arrangements

Weighted average remaining term for outstanding financing arrangements

Minimum stated interest rate for outstanding financing arrangements

8.00 % 8.00 %

Maximum stated interest rate for outstanding financing arrangements

9.89 % 9.89 %

Weighted average stated interest rate for outstanding financing arrangements

8.64 % 8.88 %

The following table provides details on payments related to financing arrangements for the Fiscal Years ended December 28, 2025 and December 29, 2024 (in thousands):

Payments related to financing arrangements

$ 2,151 $ 1,384

The following table provides the details of future payments for assets purchased through financing arrangements as of December 28, 2025 (in thousands):

Financing Arrangements

Total payments

Present value of financing arrangements

NOTE 9 — LEASES

The Company's principal research and development and corporate facilities are leased office buildings located in the United States.

These lease facilities are classified as operating leases.

Operating leases generally have lease terms of 1 to 5 years.

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 Company's principal research and development and corporate facility is a leased office building located at 2220 Lundy Avenue, San Jose, California, 95131.

This lease facility is classified as an operating lease.

T he Company occupies approximately 24,164 square feet of space.

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

1 unchanged sentence

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.

The original four -year lease was entered into in April 2019 and on April 1, 2023, was extended to March 31, 2025 under similar terms.

The Company maintains sales offices out of which it conducts sales and marketing activities in various countries outside of the United States.

The sales offices are rented under short-term leases.

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.

Total rent expense was approximately $ 0.4 million for each of the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

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

2 unchanged sentences

Operating lease costs:

Right-of-use assets obtained in exchange for obligations lease:

Right-of-use assets obtained in exchange for lease obligations:

Operating leases

12 unchanged sentences

Operating leases

The following table provides the details of future lease payments for operating leases as of December 29, 2024 and (in thousands):

The following table provides the details of future lease payments for operating leases as of December 28, 2025 (in thousands):

Annual Fiscal Years

8 unchanged sentences

NOTE 10 — FAIR VALUE MEASUREMENTS

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 .

The Company's cash and cash equivalents balances were $ 18.8 million and $ 21.9 million, including amounts in money market funds, as of December 28, 2025 and December 29, 2024 , respectively.

Interest in these funds is earned at a 0.35 % annual percentage rate ( "APR").

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

During Fiscal Year 2025, in connection with the fair value assessment, or evaluation of the recoverability of the SensiML asset group, the Company estimated the fair value of certain long-lived and intangible assets using valuation techniques that relied on significant unobservable inputs.

Due to the absence of observable market transactions and the limited availability of verifiable market data, the valuation relied primarily on management's assumptions regarding potential future economic benefits and market participant considerations.

Based on this evaluation, the Company determined that the carrying value of the SensiML asset group was not recoverable and recorded impairment charges as described in Note 3.

The inputs used in this valuation would be considered Level 3 within the fair value hierarchy.

As these valuations rely on significant unobservable inputs and management judgment, the resulting fair value estimates may differ materially from amounts that could be realized in an actual market transaction.

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").

2 unchanged sentences

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.

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

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

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

All other terms of the Original Note remained the same.

As of December 29, 2024 , the related note receivable balance was $ 1.3 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.

The CECL model does not specify a threshold for the recognition of an impairment allowance.

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

In Fiscal Year 2024, 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.

The Company utilized the probability-of-default method in Fiscal Year 2024 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.

fourth fiscal quarter of

2025, the Company entered into an agreement that cancelled the Current Note and extinguished the note receivable balance and all accrued interest as of

November 10, 2025 in the amount of

$ 1.4 million, which included

$ 240 thousand in accrued interest.

In exchange, the Company received an unlimited license to utilize certain software components owned by the customer in future releases of the Company's Aurora FPGA User Tools.

The Company derecognized the note receivable upon execution of the agreement and recorded the license rights obtained as consideration received in the transaction.

The irrevocable license is being accounted for under ASC

360 and is included within the 'Property and Equipment, net' line item on the Company's consolidated balance sheet.

In the third quarter of 2021, in connection with a revenue contract with the same non-affiliated customer, the Company received shares of the customer's common stock.

20 unchanged sentences

0.75 % - 0.92 %.

Volatility was estimated by utilizing a selected peer group of companies within the customer's industry with a valuation date as of

October 2021.

After initial recognition fair value of the non-cash consideration, the Company elected to utilize the practical expedient under ASC

321 by which entities can elect to measure equity securities without readily determinable fair values at “cost minus impairment,” basis for periods subsequent to the acquisition date.

Under the “cost minus impairment” methods, when the investment is determined to be impaired on the basis of a qualitative assessment or there is an observable price change in an orderly transaction, entities that have made the election in ASC

321 must remeasure such equity securities at fair value in accordance with ASC

321 indicates that the adjustments to the carrying value of an equity security without a readily determinable fair value should reflect the fair value of the security as of the date that the observable transaction for the similar security took place.

Subsequent to the valuation date and through

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 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

$ 0.3 million as of

December 29, 2024 and

December 31, 2023 .

Volatility was estimated by utilizing a selected peer group of companies within the customer's industry with a valuation date as of October 2021.

After initial recognition fair value of the non-cash consideration, the Company elected to utilize the practical expedient under ASC 321 by which entities can elect to measure equity securities without readily determinable fair values at “cost minus impairment,” basis for periods subsequent to the acquisition date.

ASC 321 indicates that the adjustments to the carrying value of an equity security without a readily determinable fair value should reflect the fair value of the security as of the date that the observable transaction for the similar security took place.

Subsequent to the valuation date and through December 29, 2024, there were no observable price changes or indicators of impairment for the non-marketable equity investment.

In the second quarter of 2025, the Company determined there were observable indicators of impairment for its non-marketable equity investment.

As such, the Company realized a full impairment of its non-marketable equity investment in the amount of $ 0.3 million.

NOTE 11 — INCOME TAXES

The Company notes that Note 11 - Income Taxes, is presented at the consolidated level, inclusive of continuing and discontinued operations, due to income taxes related to discontinued operations being immaterial in nature for the periods presented.

The following table presents the U.S.

5 unchanged sentences

$ ( 14,798 ) $ ( 3,838 )

Provision for income taxes:

( 20 ) ( 6 ) 36

Provision for income taxes

(Benefit from) provision for income taxes:

(Benefit from) provision for income taxes

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

2 unchanged sentences

$ ( 3,108 ) 21.0 %

State and local income taxes (net of federal income tax effect)

Foreign tax effects

( 335 ) 2.3 %

Foreign taxes

Change in valuation allowance

2,706 ( 18.3 %)

Stock compensation and other permanent differences

Nontaxable or nondeductible items

Stock compensation

Other permanent items

Other reconciling items

Expired tax attributes

(Benefit from) provision for income taxes

$ 18 ( 0.1 %)

Income tax (benefit) at statutory rate

$ ( 806 ) 21.0 %

Foreign taxes

Stock compensation and other permanent differences

R&D tax credits

4 unchanged sentences

597 ( 15.6 %)

Provision for income taxes

$ 3 - 0.1 % $ 2 - 0.7 % $ 98 - 2.4 %

(Benefit from) provision for income taxes

Based on the available objective evidence, management believes it is more likely than not that the U.S.

48 unchanged sentences

As a result, the future utilization of the Company's NOL and R&D credit carryovers generated since 2005 are not subject to any limitations, assuming the Company does not experience an ownership change in the future.

Foreign withholding taxes associated with the repatriation of earnings of foreign subsidiaries were not provided for on the undistributed earnings of certain foreign subsidiaries as of the end of fiscal 2024 .

The Company intends to reinvest these earnings indefinitely in the Company’s foreign subsidiaries.

2 unchanged sentences

subsidiaries.

During fiscal 2024 , there were no changes to this balance, and at December 29, 2024 , the balance for this deferred tax liability was approximately $ 0.1 million.

The foreign withholding taxes are not expected to have a material impact on the Company’s financial position and results of operation.

During Fiscal Year 2025 , there were no changes to this balance, and at December 28, 2025 , the balance for this deferred tax liability was approximately $ 0.1 million.

The foreign withholding taxes are not expected to have a material impact on the Company’s financial position and results of operations.

Certain impairment charges recorded during Fiscal Year 2025 did not result in a material tax benefit due to the Company's valuation allowance against its U.S.

deferred tax assets.

Uncertain Tax Positions

3 unchanged sentences

Additions (subtractions) for tax positions related to the prior year

( 69 ) ( 63 )

Additions for tax positions related to the current year

3 unchanged sentences

Out of $ 2.9 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 29, 2024 , December 31, 2023 , and January 1, 2023 .

The accrued interest and penalties related to uncertain tax positions were not significant as of December 28, 2025 and December 29, 2024 .

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

9 unchanged sentences

Total income taxes paid

$ 33 $ 14 $ 16

State and local

Total income taxes paid

NOTE 12 — STOCKHOLDERS’ EQUITY

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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.

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

Pursuant to the Sales Agreement, the Company is 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").

From February 25, 2025 to August 14, 2025 , the Company 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.

On March 6, 2025 , the Company 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.

The purchase price for each share of common stock in the March 2025 offering was $ 5.93 .

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

The Company's registration statement became effective August 22, 2025.

The Company also amended and restated its At Market Sales Agreement with the Agent on August 14, 2025.

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

From August 14, 2025 through Fiscal Year ended December 28, 2025 , the Company 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.

The Company intends to use the net proceeds from the ATM Offering and Amended 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.

Of the $ 0.5 million in stock issuance costs recognized on the Company's consolidated statements of stockholders' equity for the Fiscal Year ended December 28, 2025, approximately $ 95 thousand were prepaid in Fiscal Year 2024 and amortized in Fiscal Year 2025.

Furthermore, $ 11 thousand of the Company's stock issuance costs amortized in Fiscal Year 2025 were unpaid as of December 28, 2025.

Refer to the Company's consolidated statements of cash flows for additional information on the cash paid related to stock issuance costs in Fiscal Year 2025.

On 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.

Issuance costs related to the offering were $ 27 thousand.

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

Issuance costs related to the offering were $ 24 thousand.

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

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 were issued on

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

These warrants expired unexercised on

May 29, 2023 .

NOTE 13 — EMPLOYEE STOCK PLANS

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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.

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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.

The Company's Board of Directors approved and on May 8, 2025, 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 1.1 million shares, for an overall authorized amount of 3.5 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 8, 2025.

On May 15, 2025, the Company filed a Registration Statement on Form S- 8 with the Securities and Exchange Commission to register an additional 1.1 million shares of its common stock that may be issued under the Company’s 2019 Stock Plan.

As of December 28, 2025 , approximate ly 584 thousand shares of t he Company’s common stock were reserved for issuance under the 2019 Stock Plan.

3 unchanged sentences

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.

The 2009 Employee Stock Purchase Plan ( "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).

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 but subject to further limitations as outlined herein).

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

6 unchanged sentences

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.

5 unchanged sentences

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.

The Company's Board of Directors approved and on May 8, 2025, 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 200 thousand shares, for an overall authorized amount of 843 thousand shares.

On May 15, 2025, the Company filed a Registration Statement on Form S- 8 with the Securities and Exchange Commission to register an additional 200 thousand shares of its common stock that may be issued under the Company’s 2009 ESPP.

Due to a prior administrative error, the increase in the maximum number of shares available to be purchased per six -month offering of 10,000 that was previously approved by the Board of Directors in November 2020 ( "Prior 2020 Approval") was never reflected in an amendment to the 2009 ESPP.

In February 2026, the Board ratified the Prior 2020 Approval and authorized the Company to reflect the amendment in the 2009 ESPP.

A copy of the amended 2009 ESPP is filed as an exhibit hereto.

As of December 28, 2025 , approximate ly 258 thousand shares of t he Company’s common stock were reserved for issuance under the 2009 ESPP Stock Plan.

5 unchanged sentences

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 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively is as follows (in thousands):

Stock-based compensation expense recognized in the Company’s consolidated statements of operations for the years ended December 28, 2025 and December 29, 2024 is as follows (in thousands):

Stock-based compensation expense included in:

2024 2023 2022

Cost of revenue

$ 852 $ 328 $ 272

Research and development

1,048 595 652

Selling, general and administrative

2,706 1,599 1,111

Total costs and expenses

1 unchanged sentence

Stock-based compensation expense by type of award:

$ 108 $ 127 $ 70

4,498 2,395 1,965

Total costs and expenses

$ 3,351 $ 4,499

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 .

The Company capitalized stock-based compensation amounts to capitalized internal-use software and tooling, net of $ 50 thousand and $ 58 thousand for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

No stock-based compensation was capitalized or included in inventories for the years ended December 28, 2025 and December 29, 2024 .

Stock-Based Compensation Award Activity

1 unchanged sentence

Shares Available for Grant

Balance at January 1, 2023

Balance at December 31, 2023

RSUs and PRSUs granted

2 unchanged sentences

Balance at December 29, 2024

Options forfeited or expired

RSUs and PRSUs granted

10 unchanged sentences

(in thousands)

Balance outstanding at January 3, 2021

Forfeited or expired

Balance outstanding at January 2, 2022

Forfeited or expired

Balance outstanding at January 1, 2023

Balance outstanding at December 31, 2023

Forfeited or expired

4 unchanged sentences

The intrinsic value for the stock options, based on the Company’s closing stock pri ce of $ 6.42 per share at December 26, 2025 , 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 29, 2024 , December 31, 2023 , and January 1, 2023 .

No options were exercised or granted during the years ended December 28, 2025 and December 29, 2024 .

As of December 28, 2025 , there were no unvested stock options.

3 unchanged sentences

The Company withholds shares in settlement of employee tax withholding obligations on the vesting of restricted stock units.

As of December 29, 2024 , there was approximately $ 3.3 million in unrecognized stock-based compensation expense related to RSUs, inclusive of unrecognized stock-based compensation related to PRSUs of $ 6 thousand.

As of December 28, 2025 , there was approximately $ 3.0 million in unrecognized stock-based compensation expense related to RSUs.

There was no unrecognized stock-based compensation related to PRSUs as of December 28, 2025 .

The remaining unrecognized stock-based compensation expense as of December 28, 2025 is expected to be recorded over a weighted average period of 1.44 years.

A roll forward summarizing RSU activity and related weighted average grant date fair values is as follows:

A roll forward summarizing RSU and PRSU activity and related weighted average grant date fair values is as follows:

RSUs Outstanding

2 unchanged sentences

(in thousands)

Nonvested at January 2, 2022

Nonvested at January 1, 2023

Nonvested at December 31, 2023

Nonvested at December 29, 2024

Nonvested at December 28, 2025

2009 ESPP Stock Plan

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 Company issued 63 thousand shares of common stock at an average price of $ 4.91 per share and 41 thousand shares of common stock at an average price of $ 7.65 per share to employees in the years ended December 28, 2025 and December 29, 2024 , 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:

2 unchanged sentences

4.12 % 4.71 %

64 % 50 % 57 %

Dividend yield

15 unchanged sentences

Mature products

3,984 2,987 4,505

Total revenue

$ 13,774 $ 19,651

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 of eFPGA IP licenses, as well as professional services.

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

3 unchanged sentences

$ 987 $ 2,547

13,120 16,839 7,545

Total new products revenue

1 unchanged sentence

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 $ 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.

eFPGA-IP revenue related to professional services was approximately $ 9.4 million and $ 13.1 million in the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

Contract assets were approximately $ 0.2 million, $ 2.7 million, and $ 3.6 million at December 28, 2025 , December 29, 2024 , and December 31, 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 $ 0.2 million in contract assets as of December 28, 2025 by the end of fiscal Q1'26 .

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.

Contract liabilities of $ 0.1 million, $ 0.4 million, and $ 1.0 million were included in deferred revenue on the Company's consolidated balance sheets at December 28, 2025 , December 29, 2024 , and December 31, 2023 , respectively.

In the twelve months ended December 28, 2025 , the Company recognized the previously outstanding contract liabilities as of December 29, 2024 of $ 0.4 million as revenue.

The Company expects to recognize the $ 0.1 million in deferred revenues as of December 28, 2025 using the output time-based method through the end of Q4'26 .

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.

Of its remaining unsatisfied performance obligations not currently on the Company's balance sheet, the Company expects to recognize $ 50 thousand by Q1'27 , using the input time-based method.

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.

7 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 $ 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.

Associated with this agreement, the Company recognized professional services revenue amounting to $ 6.1 million and $ 10.9 million for the Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

As of December 28, 2025 and December 29, 2024 , the Company had $ 0.2 million and $ 2.6 million, respectively, in contract assets on its consolidated balance sheets associated with this agreement.

1 unchanged sentence

North America includes revenue from the United States.

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.

Revenue from the Uni ted States was $ 10.8 million or 79 % of total revenue and $ 16.4 million or 84 % of total revenue in th e Fiscal Years ended December 28, 2025 and December 29, 2024 , respectively.

Countries outside of the United States comprising 10% or more of revenue included Malaysia, with $ 1.4 million or 10% of total revenue in the Fiscal Year ended December 28, 2025.

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

4 unchanged sentences

10,900 16,764

717 589 1,710

Total revenue

5 unchanged sentences

Distributor "A"

Distributor "B"

54 % 70 % 20 %

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

2 unchanged sentences

Distributor "D"

Distributor "C"

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

6 unchanged sentences

The Company is committed to take delivery of and to pay for a portion of the forecasted wafer volume.

The C ompany did not have any non-cancellable purchase commitments with various wafer foundries as of December 29, 2024 .

The C ompany had $ 0.2 million in non-cancellable purchase commitments with various wafer foundries as of December 28, 2025 .

Purchase Obligations

9 unchanged sentences

NOTE 17 — SUBSEQUENT EVENTS

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 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.

In the first quarter of Fiscal Year 2026, the Company sold 403 thousand shares under the Amended ATM Offering, resulting in gross cash proceeds of approximately $ 3.2 million.

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