Ambiq Micro, Inc.

1. Description of Business

Ambiq Micro, Inc. (the Company) is a fabless semiconductor company that has developed technology based on a patented Sub-threshold Power Optimized Technology (SPOT™) platform that significantly reduces the amount of power consumed by integrated circuits. The following subsidiaries were formed by the Company and are wholly owned:

Ambiq Micro Singapore Private Ltd.

Shenzhen DeKean Electronics Co.

Ambiq Micro Asia Ltd.

Ambiq Micro Asia Ltd. Taiwan

Ambiq (Shenzhen) Electronics Co., Ltd.

Global Economic Considerations

The global macroeconomic environment is uncertain, and could be negatively affected by, among other things, increased U.S. disputes with countries that are existing trade partners, instability in the global capital and credit markets, supply chain weaknesses, instability in the geopolitical environment in Asia, Europe and the Middle East, and other tensions. Deterioration in economic factors arising from trade disputes between the United States and China, in particular, could have an adverse impact on the Company's financial results given its customer concentrations in both countries. Such challenges have caused, and may continue to cause, recession fears, fluctuations in interest rates, foreign exchange volatility and inflationary pressures through the imposition of tariffs on sensitive technologies, including semiconductors.

Despite the uncertainty of these challenges, the Company believes it has considered all appropriate factors when making financial estimates and will continue to evaluate the impact of any significant changes resulting from these and other factors affecting the Company’s business performance.

Liquidity and Capital Resources

During the three months ended June 30, 2025, the Company reported a net loss of$8.5 million. During the six months ended June 30, 2025, the Company reported a net loss of$16.8 million and had an operating cash flow deficit of$10.5 million. As of June 30, 2025, the Company had cash and cash equivalents totaling$47.5 million. Since inception, the Company has had negative cash flows and losses from operations which it has funded primarily through the issuances of common and preferred stock. Refer to Note 12 - Subsequent Events for more details. The Company anticipates incurring additional losses and negative cash flows from operations until such time, if ever, that it can generate significant sales of its products currently in development and is highly dependent on its ability to find additional sources of funding in the form of debt and equity financing. The Company’s ability to fund its planned operations, research and development, and commercialization of its products significantly depends on the amount and timing of cash receipts from these funding sources. Adequate additional funding may not be available to the Company on acceptable terms or at all. The failure to raise funds as and when needed and generate adequate sales could have a negative impact on the Company’s financial condition and ability to satisfy its obligations over the next twelve months.

2. Summary of Significant Accounting Policies

Basis of Accounting and Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company and reflect all adjustments, consisting only of normal recurring adjustments, that are, in the opinion of management, necessary for the fair presentation of its financial position, results of operations, cash flows and stockholders' equity for the interim periods presented. The statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the applicable rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information and include the accounts of the Company and its wholly owned subsidiaries. Accordingly, these statements do not include all information and footnotes required by U.S. GAAP for annual consolidated financial statements, and should be read in conjunction with the Company's audited consolidated financial statements as of and for the fiscal year ended December 31, 2024 included in the Company's final prospectus, dated July 29, 2025, filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (Securities Act), on July 31, 2025 (the Prospectus) in connection with the Company's initial public offering (IPO). The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the operating results expected for the full fiscal year or future operating periods.

The condensed consolidated balance sheet as of December 31, 2024 has been derived from the Company’s audited consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.

There have been no material changes to the Company’s significant accounting policies described in Note 2 - Summary of Significant Accounting Policies, of the notes to the Company’s audited consolidated financial statements.

Deferred Offering Costs

Deferred offering costs consist primarily of accounting, legal and other fees related to the IPO. As of June 30, 2025, $1.1 million of deferred offering costs were included within prepaid and other current assets in the condensed consolidated balance sheets.

Concentration of Risks

Financial Instruments

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company maintains its cash and cash equivalent balances in highly rated financial institutions, which at times may exceed federally insured limits or be held in foreign jurisdictions. The Company has not experienced any loss relating to cash and cash equivalents in these accounts and believes no significant concentration risk exists with respect to cash. The Company performs periodic credit evaluations of its customers’ financial conditions and generally does not require collateral.

Demand

The Company hadthree customers representing 41%,40% and 15%, respectively, of total accounts receivable as of June 30, 2025. The Company hadthree customers representing 30%,29% and 19%, respectively, of total accounts receivable as of June 30, 2024, one of which was the same customer as of June 30, 2025.

There were three end customers representing 38%,33% and 12%, respectively, of total net sales for the three months ended June 30, 2025. These same three end customers represented 38%,29%, and 17%, respectively, of total net sales for the six months ended June 30, 2025.

There were three end customers representing 36%,33%, and 18%, respectively, of total net sales for the three months ended June 30, 2024. These same three end customers represented 31%,27%, and 22%, respectively, of total net sales for the six months ended June 30, 2024, two of which were the same customers as of the three and six months ended June 30, 2025.

The loss of one or more of these customers could have a material adverse impact on the Company’s results of operations and financial position.

Supply

The Company's products depend on a sole supplier of wafers and a limited number of third-party manufacturers. The continued and timely supply of input materials and the availability of manufacturing capacity and packaging and testing services impact the Company's ability to meet customer demand. Supply chain disruptions, shortages of raw materials, and manufacturing limitations could limit the Company's ability to meet customer demand and result in delayed, reduced, or canceled orders. The Company has established relationships with leading suppliers and partners, and believe these relationships increase the resiliency of the Company's supply chain for its customers. From time to time, subject to inventory disruptions, the Company's customers may buy and hold excess inventories. Consequently, the Company may be subject to resulting fluctuations in the demand for its products.

End Customer Concentration

Although the Company recognizes revenue and directly invoices distributors for sales of its products, the timing and uncertainty of its revenue and cash flows are most impacted by the ultimate end customer. The following is a summary of net sales for thethree and six months ended June 30, 2025 and 2024, based on the country of the corporate headquarters of the ultimate end customer (in thousands):

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The update will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The Company will adopt this amendment effective with its annual financial statements for the year ending December 31, 2025. The Company is currently evaluating the potential impact of adopting this guidance on the notes to the consolidated financial statements.

3. Net Loss Per Share

The table below sets forth the computation of basic and diluted loss per share for the periods presented (in thousands, except share and per share amounts):

Since the Company incurred a net loss for the three and six months ended June 30, 2025 and 2024, the diluted net loss per share calculation excludes potentially dilutive securities. Thefollowing table summarizes the number of shares of common stock issuable under various securities that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive:

The Company recorded deemed dividends of $2.0 million and$2.4 million for the three and six months ended June 30, 2024, respectively, as a result of a down-round feature in the Company’s Series E, F, and F-1 preferred stock triggered during the issuance by the Company of Series G preferred stock (see Note 7). No deemed dividends were recorded for thethree and six months ended June 30, 2025.

4. Inventories

The following table represents the components of inventories as of June 30, 2025 and December 31, 2024 (in thousands):

5. Property, Equipment and Software

Property, equipment and software consisted of the following as of June 30, 2025, and December 31, 2024 (in thousands):

Depreciation expense relating to the Company's property, equipment and software was approximately$0.4 million and$0.4 million for the three months ended June 30, 2025 and 2024, respectively. Depreciation and amortization expense relating to the Company’s property, equipment and software was approximately$0.8 million and$0.8 million for the six months ended June 30, 2025 and 2024, respectively, and is allocated to cost of sales, selling, general and administrative, and research and development costs in the acco mpanying unaudited condensed consolidated statements of operations and comprehensive loss.

During the six months ended June 30, 2025 and 2024, the Company received mask sets in exchange forno consideration from a vendor in lieu of reimbursement. The mask sets were capitalized and a $1.6 million gain was recorded within cost of sales in accordance with ASC 845: Nonmonetary Transactions.

6. Commitments and Contingencies

Contract Manufacturer Commitments

The Company relies on a third-party foundry and contract manufacturer for the manufacturing of its products. Generally, its foundry agreements do not have volume purchase commitments and primarily provide for purchase commitments based on purchase orders. Purchase orders are placed in advance with consideration of estimates of future demand. These purchase orders can be canceled and rescheduled upon agreement of the Company and the contract manufacturer. As of June 30, 2025, the Company had total manufacturing purchase commitments of$7.7 million.

Litigation

From time to time, the Company may become involved in various legal actions arising in the ordinary course of business. As of June 30, 2025, management was not aware of any existing, pending, or threatened legal actions that would have a material impact on the financial position, results of operations, or cash flows of the Company.

7. Warrants, Redeemable Convertible Preferred Stock and Stockholders’ Deficit

Common Stock

The Company hasone class of authorized common stock and has authorized for issuance up to 500,000,000 shares of common stock with a par value of$0.000001 per share.

The holders of common stock are entitled to receive dividends at the discretion of the board of directors, subject to preferences that may apply to shares of preferred stock outstanding at the time.

All holders of common stock are entitled toone vote per share on all matters to be voted on by the Company’s stockholders. Upon liquidation, dissolution or winding up, the holders of common stock are entitled to share equally in all the Company’s assets remaining after payment of all liabilities and the liquidation preferences of any outstanding preferred stock.

At June 30, 2025, the Company has reserved an aggregate of 16,131,116 shares of common stock for the conversion, exercise or issuance, as applicable, of certain securities. This amount includes 178,588 shares reserved for issuance upon the exercise of options not issued as of June 30, 2025 and 15,952,528 shares underlying the following outstanding securities:

Redeemable Convertible Preferred Stock

During the six months ended June 30, 2025, the Company didnot issue any additional shares of Series G preferred stock.

During the three and six months ended June 30, 2024, the Company issued 57,068,338 shares of Series G preferred stock with an original issuance price of$0.90 per share for cash proceeds of$51.5 million. The Company incurred costs of approximately$0.1 million associated with this transaction.

All classes of preferred stock have a par value of$0.000001 per share. The Company’s preferred stock is recorded in the temporary equity section of the Company’s consolidated balance sheets.

A general summary of the rights with respect to the preferred stock is provided below. All of the Company's preferred stock converted into common stock in connection with the IPO. See Note 12 - Subsequent Events for more detail.

Dividends

The holders of preferred stock, in preference to the holders of common stock, shall be entitled to receive on a pari passu basis, out of funds that are legally available, cash dividends at the rate of 8%of the applicable original issue price per annum on each outstanding share of preferred stock. All original issue prices are subject to adjustment for any stock dividends, combinations, splits, recapitalizations and similar events.

Dividends are non-cumulative, and the Company has no obligation to pay dividends until declared by the Company’s board of directors. Through June 30, 2025, no dividends have been declared by the Company’s board of directors.

Liquidation Preference

Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, before any distribution or payment shall be made to the holders of any common stock, the holders of preferred stock shall be entitled to be paid on a pari passu basis out of the assets of the Company legally available for distribution (or the consideration received by the Company or its stockholders in an acquisition) for each share of preferred stock held by them, an amount per share of preferred stock equal to the original issue price for such share of preferred stock plus all declared and unpaid dividends on such share of preferred stock.

If upon liquidation, the assets of the Company are insufficient to make payment in full to all holders of preferred stock, then such assets shall be distributed among the holders of preferred stock at the time outstanding, ratably in proportion to the full amounts to which they would otherwise be respectively entitled.

Conversion

Each share of preferred stock shall be convertible at the option of the holder, at any time, into fully paid and nonassessable shares of common stock. The number of shares of common stock to which a holder of preferred stock shall be entitled upon conversion shall be the product obtained by multiplying the applicable “Series Preferred Conversion Rate”, by the number of shares of such preferred stock being converted, as defined in the Company’s latest amended and restated certificate of incorporation. The Series Preferred Conversion Rate is the quotient obtained by dividing the Original Issue Price of such series of Series Preferred by the applicable “Series Preferred Conversion Price”. The Series Preferred Conversion Price is generally the Original Issuance Price for all series of Series Seed, A, B, C, D and G preferred stock, subject to certain adjustments.

Voting

The holders of preferred stock shall vote together with the holders of common stock and not as a separate class and may act by written consent in the same manner as the holders of common stock. Each holder of preferred stock shall be entitled to the number of votes equal to the number of shares of common stock into which such shares of preferred stock could be converted immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent and shall have voting rights and powers equal to the voting rights and powers of the holders of common stock and shall be entitled to notice of any stockholders’ meeting in accordance with the bylaws of the Company.

Redemption

The Company’s preferred stock is not generally redeemable except in situations set forth in the certificate of incorporation, including when more than fifty percent of the Company’s voting power is transferred, a triggering event is created that is outside the control of the Company, and a change in control of Company ownership.

See the table below for a roll forward of the total preferred stock from January 1,2024 to June 30, 2024 and January 1, 2025 to June 30, 2025, which details the total redeemable convertible preferred stock presented in the unaudited condensed conso lidated statements of changes in redeemable convertible preferred stock and stockholders’ deficit (in thousands, except share amounts):

8. Stock Option Plan and Stock-Based Compensation

The following table summarizes the activity in total shares of common stock available for issuance under the 2020 Plan:

The following table summarizes the effects of stock-based compensation on cost of sales, research and development, and sales, general and administrative expenses granted under the 2010 Equity Incentive Plan and 2020 Equity Incentive Plan (collectively, the Plans) (in thousands) for the three and six months ended June 30, 2025 and 2024:

The total unrecognized stock-based compensation expense related to unvested stock options and subject to recognition in future periods was approximately $4.2 million at June 30, 2025. As of June 30, 2025, the Company anticipates this expense to be recognized over a weighted-average period of approximately 2.4 years.

During the three months ended June 30, 2025, the Company granted 330,706 stock options, presented on a post-reverse stock split basis, under the 2020 Equity Incentive Plan. Refer to Note 12 - Subsequent Events for additional information. No restricted stock units (RSUs) were granted during thethree months ended June 30, 2025. During the six months ended June 30, 2025, the Company received $0.2 million from the exercise of stock options granted under the Plans and granted 71,427 RSUs to several non-employee directors, which RSUs vest upon satisfaction of a service-based condition and performance condition based on a liquidity event. The Company granted 47,618 RSUs in total during the three and six months ended June 30, 2024.

9. Income Taxes

Effective Tax Rate

The following table presents the provision for income taxes and the effective tax rates for thethree and six months ended June 30, 2025 and 2024 (in thousands):

The income tax amount for each of the three and six months ended June 30, 2025 and 2024 differs from the amount that would be expected after applying the statutory U.S. federal income tax rate primarily due to an increase in the valuation allowance. The effective tax rate was less than 1% for both thethree and six months ended June 30, 2025 and 2024. The provision for income taxes is primarily related to the foreign subsidiaries’ local country obligations. There is no federal provision for income taxes as the Company has sufficient carryforward of net operating losses to offset any operating income earned since inception and has projected an operating loss in the current year.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to the uncertainty of the Company’s ability to realize the benefit of the deferred tax assets, the net deferred tax assets are fully offset by a valuation balance at June 30, 2025 and December 31, 2024.

10. Related Party Transactions

The Company defines related parties as any party that controls or can significantly influence the management or operating policies of the Company to the extent that the Company may be prevented from fully pursuing its own interests, such as directors, executive officers, and stockholders, including a greater than 10% beneficial owner of the Company’s capital and their affiliates or immediate family members. For thethree and six months ended June 30, 2025 and 2024, the Company didnot have any related party transactions.

11. Segment and Geographic Information

The Company’s chief operating decision maker (CODM) is the Company’s chief executive officer (CEO) and reviews the financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. The CODM uses revenue, gross margin, operating expenses and net loss by itssingle operating and reportable segment to make strategic business decisions.

The following table sets forth the Company’s disaggregation of operating expenses which were reviewed by the CODM for thethree and six months ended June 30, 2025 and 2024 (in thousands):

The following is a summary of net sales for thethree and six months ended June 30, 2025 and 2024, based on the country to which the Company's products were shipped, which may be different from the geographic locations of the ultimate end customers (in thousands):

The following illustrates property, equipment and software, net, and right-of-use assets, net by geographic locations based on physical location (in thousands):

12. Subsequent Events

Reverse Stock Split

On July 18, 2025, the Company effected a 1-for-28 reverse stock split (the Stock Split) of the Company’s issued and outstanding shares of common stock and options to purchase common stock. The Stock Split reduced the number of shares of the Company’s issued and outstanding common stock, as well as the numbers of shares underlying the RSUs and the numbers of shares reserved and available for future issuance and underlying outstanding options to purchase common stock. No fractional shares were distributed as a result of the Stock Split, and stockholders were entitled to a cash payment in lieu of fractional shares. The Stock Split did not affect the par values per share or total authorized common stock. Accordingly, all share and per share amounts for all periods presented in the condensed consolidated financial statements have been adjusted retroactively, where applicable, to reflect the Stock Split.

Initial Public Offering

On July 31, 2025, the Company completed its IPO, in which 4.6 million shares of common stock were issued and sold, inclusive of the exercise in full of the underwriters' option to purchase 0.6 million additional shares. The Company received net proceeds of $97.2 million after deducting underwriting discounts and commissions of $7.7 million, but before offering expenses. In connection with the IPO, all shares of redeemable convertible preferred stock then outstanding automatically converted into an aggregate of 12,729,240 shares of common stock, and the Company issued 424,032 shares of common stock upon exercise of warrants and will, at the expiration of the applicable lock-up period, issue 34,254 shares of common stock upon settlement of RSUs outstanding for which the performance-based vesting condition was satisfied in connection with the IPO.

Prior to the IPO, deferred offering costs, consisting primarily of accounting, legal and other fees related to the IPO, were capitalized within other current assets in the condensed consolidated balance sheets. As of June 30, 2025, $1.1 million of deferred offering costs were included within prepaid and other current assets in the condensed consolidated balance sheets.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We may, in some cases, use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would,” or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

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the timing and success of new features, integrations, capabilities, and enhancements by us, or by our competitors to their products, including the successful integration of AI;

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our end customer relationships and our ability to retain and expand our end customer relationships and to achieve design wins;

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the success, cost, and timing of new products;

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our ability to compensate for decreases in average selling prices of our products;

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our ability to address market and end customer demands and to timely develop new or enhanced products to meet those demands;

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anticipated trends, challenges and growth in our business and the markets in which we operate, including pricing expectations;

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our expectations regarding our revenue, gross margin and expenses;

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the size and growth potential of the markets for our products, and our ability to serve those markets;

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plans to expand sales and marketing efforts through increased collaboration with our distributors, resellers, and contracted sales representatives;

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the loss of one or more significant end customers;

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our expectations regarding competition in our existing and new markets, including our expectations concerning our mix of revenue by geography;

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regulatory developments in the United States and foreign countries, the deterioration in economic factors arising from trade disputes and the imposition of trade sanctions or increased tariffs;

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our dependence on international end customers and operations;

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the performance of our third-party suppliers and manufacturers;

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our and our end customers’ ability to respond successfully to technological or industry developments;

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the cyclical nature of the semiconductor industry;

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our ability to attract and retain key management personnel;

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intellectual property and related litigation;

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the accuracy of our estimates regarding capital requirements and needs for additional financing;

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our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act;

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our expectations regarding our ability to obtain, maintain, protect, and enforce intellectual property protection for our technology;

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our use of the net proceeds from the IPO;

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our ability to remediate the material weakness in our internal control over financial reporting and design and maintain effective internal control over financial reporting; and

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the potential impact of macroeconomic conditions and geopolitical conflicts, including the conflicts between Russia and Ukraine or in the Middle East, recession fears, fluctuations in global interest rates, foreign exchange volatility and inflationary pressures, on our business and the businesses of our suppliers and end customers.

These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Quarterly Report on Form 10-Q and are subject to risks and uncertainties. We discuss many of these risks in greater detail under “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference and have filed as exhibits to this Quarterly Report on Form 10-Q, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this Quarterly Report on Form 10-Q by these cautionary statements.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q to conform these statements to actual results or to changes in our expectations, except as required by law.