QUICKLOGIC Corp

Previous wording

QuickLogic Corporation was founded in 1988 and reincorporated in Delaware in 1999. We provide innovative, programmable silicon and software platforms to enable our customers to develop custom hardware products in a fast time-to-market and cost-effective way. Specifically, we are a fabless semiconductor company with a variety of products: embedded FPGA ("eFPGA") intellectual property ("IP"), low power, multi-core semiconductor system-on-chips ("SoCs"), discrete FPGAs, and AI software. Our customers can use our eFPGA IP for hardware acceleration and pre-processing in their Application Specific Integrated Circuit (ASIC) products, our SoCs to run our customers' software and build their hardware around, and our discrete FPGAs to implement their custom functionality. The Analytics Toolkit from SensiML Corporation ("SensiML"), our wholly-owned subsidiary, provides an end-to-end Artificial Intelligence / Machine Learning solution with accurate sensor algorithms using AI technology. The full range of platforms, software tools, and eFPGA IP enables the practical and efficient adoption of AI, voice, and sensor processing across Aerospace and Defense, Consumer/Industrial IoT, and Consumer Electronics markets.

Current wording

QuickLogic Corporation was founded in 1988 and reincorporated in Delaware in 1999. We provide innovative programmable silicon and software platforms to enable our customers to develop custom hardware products in a fast time-to-market and cost-effective way. Specifically, we are a fabless semiconductor company with a variety of products: embedded FPGA ("eFPGA") intellectual property ("IP"), low power, multi-core semiconductor system-on-chips ("SoCs"), and discrete FPGAs. Our customers can use our eFPGA IP for hardware acceleration and pre-processing in their Application Specific Integrated Circuit ("ASIC") products, our SoCs to run our customers' software and build their hardware around, and our discrete FPGAs to implement their custom functionality. The full range of products, software tools, and eFPGA IP enables the practical and efficient programmability for our customers across Aerospace and Defense, Consumer/Industrial IoT, and Consumer Electronics markets.

Previous wording

For our IP and silicon platforms, we collaborate with multiple partners on co-marketing and/or co-selling initiatives. These partners could have primary business lines in semiconductor IP, Design Services, semiconductor foundry, semiconductor assembly and test, and others. For our AI/ML Software, SensiML collaborates with several microcontroller and sensor manufacturers to integrate the microcontroller and/or sensor manufacturers’ development kits with SensiML’s Analytics Toolkit in order to showcase combined solutions for AI/ML applications. Currently, these collaborations include Infineon Technologies, On Semiconductor Corp., Microchip Technology Inc., Silicon Laboratories, Inc., STMicroelectronics N.V., Arduino, NXP Semiconductors N.V., Raspberry Pi, and Nordic Semiconductor.

Current wording

For our IP and silicon platforms, we collaborate with multiple partners on co-marketing and/or co-selling initiatives. These partners could have primary business lines in semiconductor IP, Design Services, semiconductor foundry, semiconductor assembly and test, and others. Currently, these collaborations include Infineon Technologies, On Semiconductor Corp., Microchip Technology Inc., Silicon Laboratories, Inc., STMicroelectronics N.V., Arduino, NXP Semiconductors N.V., Raspberry Pi, and Nordic Semiconductor.

Previous wording

Our eFPGA IP is currently developed on 12nm, 16nm, 22nm, 28nm, 40nm, 65nm, 90nm, 130nm, and 250nm process nodes with a roadmap to more advanced nodes. The licensable IP is generated by our automated compiler tool called Australis™, which enables our engineers to create an eFPGA IP for our licensees that they can then integrate into their SoC without significant involvement by QuickLogic. We believe this flow enables a scalable development and support model for QuickLogic. For our eFPGA strategy, we typically work with semiconductor manufacturing partners prior to this IP being licensed to a SoC company.

Current wording

Our eFPGA IP is currently developed on Intel 18A, 12nm, 16nm, 22nm, 28nm, 40nm, 65nm, 90nm, 130nm, and 250nm process nodes with a roadmap to more advanced, sub-10nm nodes. The licensable IP is generated by our automated compiler tool called Australis™, which enables our engineers to create an eFPGA IP for our licensees that they can then integrate into their SoC without significant involvement by QuickLogic. We believe this flow enables a scalable development and support model for QuickLogic. For our eFPGA strategy, we typically work with semiconductor manufacturing partners prior to this IP being licensed to a SoC company.

Previous wording

In order to grow our revenue from its current level, we depend upon increased revenue from our new products, including existing new product platforms and platforms currently in development. We expect our business growth to be driven mainly by eFPGA IP and our silicon solutions, with additional contributions from SensiML AI Software. Therefore, our revenue growth needs to be strong enough to enable us to sustain profitability while we continue to invest in the development, sale, and marketing of our new solution platforms, IP, and software.

Current wording

In order to grow our revenue from its current level, we depend upon increased revenue from our new products, including existing new product platforms and platforms currently in development. We expect our business growth to be driven mainly by eFPGA IP and our silicon solutions. Therefore, our revenue growth needs to be strong enough to enable us to sustain profitability while we continue to invest in the development, sale, and marketing of our new solution platforms, IP, and software.

Previous wording

We market our programmable logic (FPGAs and eFPGA IP) solutions primarily to Defense Industrial Base contractors, U.S. Government entities, System OEMs, and fabless semiconductor companies. These customers may value one or more of our product categories. A solution can be based on our programmable technology, which enables customized designs, low power, flexibility, rapid time-to-market, longer time-in-market, and lower total cost of ownership. We are capable of providing complete solutions because of our investment in developing the low power IP and software required to implement specific functions, along with sensor software algorithms optimized for our architecture. In some cases, we develop the IPs and either software or firmware ourselves and, in other cases, we utilize third parties to develop the mixed signal physical layers, logic, and/or software.

Current wording

We market our programmable logic (FPGAs and eFPGA IP) solutions primarily to Defense Industrial Base contractors, U.S. Government entities, System OEMs, and fabless semiconductor companies. These customers may value one or more of our product categories. A solution can be based on our programmable technology, which enables customized designs, low power, flexibility, rapid time-to-market, longer time-in-market, and lower total cost of ownership. We are capable of providing complete solutions because of our investment in developing the low power IP and software required to implement specific functions. In some cases, we develop the IPs and either software or firmware ourselves and, in other cases, we utilize third parties to develop the mixed signal physical layers, logic, and/or software.

Previous wording

We monetize our technology through hardware product sales and eFPGA IP licenses, with any necessary corresponding work delivered via professional engineering services, SensiML Analytics Toolkit subscriptions, and per unit royalties. We specialize in enhancing the user experience in leading edge IoT hardware products. For our customers, we enable hardware and sensor algorithmic differentiation quickly, cost-effectively, and at low power. For our partners, we expand their reach into new segments and new use cases, thereby expanding the served available market for their existing hardware products.

Current wording

We monetize our technology through hardware product sales, per unit royalties, and eFPGA IP licenses, with any necessary corresponding work delivered via professional engineering services. We specialize in enhancing the user experience in leading edge IoT hardware products. For our customers, we enable hardware and sensor algorithmic differentiation quickly, cost-effectively, and at low power. For our partners, we expand their reach into new segments and new use cases, thereby expanding the served available market for their existing hardware products.

Previous wording

Our embedded FPGA technology gives ASIC and SoC developers the benefit of flexibility to make design changes post-manufacturing changes at very fast time-to-and time-in-market, while keeping power consumption low. Our multi-core sensor processing products such as ArcticLink 3 S1, ArcticLink 3 S2, EOS 3, EOS S3 LV, and EOS S3AI provide an extremely power-efficient approach for real-time multi-modal (vision, motion, voice, location, biometric, and environmental) sensor processing independently of the cloud. Our SensiML Analytics Toolkit is cutting-edge software that enables ultra-low power IoT endpoints that implement AI to transform raw sensor data into meaningful insight at the device itself. The toolkit also provides an end-to-end development platform spanning data collection, labeling, algorithm and firmware auto generation, and testing.

Current wording

Our embedded FPGA technology gives ASIC and SoC developers the benefit of flexibility to make post-manufacturing design changes at very fast time-to- and time-in-market, while keeping power consumption low. Our multi-core sensor processing products such as ArcticLink 3 S1, ArcticLink 3 S2, EOS 3, EOS S3 LV, and EOS S3AI provide an extremely power-efficient approach for real-time multi-modal (vision, motion, voice, location, biometric, and environmental) sensor processing independently of the cloud.

Previous wording

Customers typically order our products through our distributors. Currently, we have 11 active distributors in the United States and a network of 18 active distributors and sales representatives throughout Europe and Asia to support our international business. eFPGA IP customers and SensiML SaaS subscribers typically enter into licensing agreements directly with QuickLogic and SensiML, respectively.

Current wording

Customers typically order our products through our distributors. Currently, we have fourteen active distributors in North America and a network of thirteen active distributors and sales representatives throughout Europe and Asia to support our international business. eFPGA IP customers typically enter into licensing agreements directly with QuickLogic.

Previous wording

During the third quarter of 2024, we generated total revenue of $4.3 million, an increase of 4% compared to the prior quarter, and a decrease of 36% compared to the same quarter last year. Our new product revenue in the third quarter was $3.5 million, an increase of 16% from the prior quarter and a decrease of 42% from the third quarter of 2023. Our mature product revenue was $0.7 million in the third quarter of 2024, a decrease of 31% compared to the prior quarter, and an increase of 29% compared to the third quarter of 2023. We expect our mature product revenue to continue to fluctuate over time.

Current wording

During the first quarter of 2025, we generated total revenue from continuing operations of $4.3 million, a decrease of 24% compared to the prior quarter, and a decrease of 24% compared to the same quarter last year. Our new product revenue from continuing operations in the first quarter was $3.7 million, a decrease of 19% from the prior quarter and a decrease of 17% from the first quarter of 2024. Our mature product revenue from continuing operations was $0.6 million in the first quarter of 2025, a decrease of 45% compared to the prior quarter, and a decrease of 49% compared to the first quarter of 2024. We expect our mature product revenue to continue to fluctuate over time.

Previous wording

We devote substantially all of our development, sales, and marketing efforts to our neweFPGA IP licensing and professional services and SensiML initiatives. Overall, we reported a net loss of $2.1 million for the third quarter of 2024, as compared to a net loss of $1.6 million in the prior quarter and a net income of $1.2 million for the third quarter of 2023.

Current wording

We devote substantially all of our development, sales, and marketing efforts to our neweFPGA IP licensing and professional services. Overall, we reported a net loss from continuing operations of $2.1 million for the first quarter of 2025, as compared to a net loss from continuing operations of $0.1 million in the prior quarter and a net income from continuing operations of $35 thousand for the first quarter of 2024.

Previous wording

As of September 29, 2024, we had one operating lease with a remaining lease term of 2.67 years. The operating lease relates to our company headquarters in San Jose, CA.

Current wording

As of March 30, 2025, we had one operating lease with a remaining lease term of 2.17 years. The operating lease relates to our company headquarters in San Jose, CA.

Previous wording

The methodologies, estimates, and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our consolidated financial statements. The SEC has defined critical accounting policies as those that are most important to the portrayal of the company's financial condition and results of operations and requires us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our critical accounting policies include revenue recognition, inventory valuation, including the identification of excess quantities, market value, and obsolescence, and valuation of goodwill and long-lived and intangible assets. We believe that we apply judgments and estimates in a consistent manner and that such consistent application results in consolidated financial statements and accompanying notes that fairly represent all periods presented. However, any factual errors or errors in these judgments and estimates may have a material impact on our financial statements. During the three and nine months ended September 29, 2024, there were no changes in our critical accounting policies from our disclosure in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on March 27, 2024.

Current wording

The methodologies, estimates, and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our consolidated financial statements. The SEC has defined critical accounting policies as those that are most important to the portrayal of the company's financial condition and results of operations and requires us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our critical accounting policies include revenue recognition, inventory valuation, including the identification of excess quantities, market value, and obsolescence, and valuation of goodwill and long-lived and intangible assets. We believe that we apply judgments and estimates in a consistent manner and that such consistent application results in consolidated financial statements and accompanying notes that fairly represent all periods presented. However, any factual errors or errors in these judgments and estimates may have a material impact on our financial statements. During the three months ended March 30, 2025, there were no changes in our critical accounting policies from our disclosure in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024, which was filed with the SEC on March 26, 2025.

Previous wording

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

Current wording

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

Previous wording

Note: For all periods presented, new products include hardware products and related revenues manufactured on 180 nanometer or smaller semiconductor processes, intellectual property license, professional services, QuickAI and SensiML AI software as a service (SaaS) revenue. Mature products include all products produced on semiconductor processes larger than 180 nanometer.

Current wording

Note: For all periods presented, new products include hardware products and related revenues manufactured on 180 nanometer or smaller semiconductor processes, intellectual property license, professional services, and QuickAI. Mature products include all products produced on semiconductor processes larger than 180 nanometer.

Previous wording

Product revenue for the third quarter of 2024 compared to the third quarter of 2023 decreased $2.4 million. The increase resulted primarily from decreases in professional services eFPGA revenues and revenues from sales of new devices, partially offset by increases in revenues from sales of mature devices.

Current wording

Product revenue for the first quarter of 2025 compared to the first quarter of 2024 decreased $1.3 million. The decrease resulted from decreases in professional services eFPGA revenues, revenues from sales of new and mature devices, and royalty revenues.

Previous wording

The table below sets forth the changes in new product revenue in the three months ended September 29, 2024 compared to the three months ended October 1, 2023 (in thousands, except percentage data):

Current wording

The table below sets forth the changes in new product revenue from continuing operations in the three months ended March 30, 2025 compared to the three months ended March 31, 2024 (in thousands, except percentage data):

Previous wording

eFPGA IP revenue for the three months ended September 29, 2024 and October 1, 2023 was $3.4 million and $5.8 million, respectively, which were primarily professional services revenue.

Current wording

eFPGA IP revenue for the three months ended March 30, 2025 and March 31, 2024 was $3.6 million and $4.0 million, respectively, which was primarily professional services revenue.

Previous wording

In the third quarter of 2024, gross profit decreased $2.7 million, or 53%, compared to the same quarter in the prior year. The net decrease in gross profit reflects a 36% decrease in revenues, combined with a 23% net increase in cost of revenue. Revenue decreased from the same quarter in the prior year due to the timing of Department of Defense contracts. The net increase in cost of revenues was primarily due to the increased activity commensurate with the professional services revenue contracts. Labor and increased depreciation expenses from capitalized tooling substantially comprised this increase, with slight offsets from decreased consulting and software expenses.

Current wording

In the first quarter of 2025, gross profit decreased $1.9 million, or 51%, compared to the same quarter in the prior year. The net decrease in gross profit reflects a 24% decrease in revenues, combined with a 31% net increase in cost of revenue. Revenue decreased from the same quarter in the prior year due to the timing of Department of Defense contracts and lower device sales. The net increase in cost of revenues was primarily due to increases in depreciation and amortization related to tooling for revenue contracts, as well as labor costs. Additionally, there were slight offsets from decreased consulting expenses.

Previous wording

The table below sets forth the changes in operating expenses for the three months ended September 29, 2024 compared to the three months ended October 1, 2023 (in thousands, except percentage data):

Current wording

The table below sets forth the changes in operating expenses from continuing operations for the three months ended March 30, 2025 compared to the three months ended March 31, 2024 (in thousands, except percentage data):

Previous wording

Our R&D expenses consist primarily of personnel, overhead and other costs associated with System on Chip (SoC) and software development, programmable logic design, AI and eFPGA development. R&D expenses for the third quarter of 2024 as compared to the same quarter in 2023 were essentially flat, reflecting continued allocation of R&D resources to COGS for revenue contracts with customers.

Current wording

Our R&D expenses consist primarily of personnel, overhead and other costs associated with System on Chip (SoC) and software development, programmable logic design, AI and eFPGA development. R&D expenses for the first quarter of 2025 as compared to the same quarter in 2024 decreased $0.1 million, primarily the result of increased labor allocations to Cost of Revenue for fulfillment of revenue contracts.

Previous wording

Our selling, general and administrative (SG&A) expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, administration, human resources, and general management. The $0.4 million increase in SG&A expenses in the third quarter of 2024, as compared to the third quarter of 2023, was attributable primarily to increases in compensation.

Current wording

Our selling, general and administrative (SG&A) expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, administration, human resources, and general management. The $0.2 million increase in SG&A expenses in the first quarter of 2025, as compared to the first quarter of 2024, was attributable primarily to increases in compensation and consulting services.

Previous wording

The table below sets forth the changes in interest expense and interest income and other income (expense), net, for the three months ended September 29, 2024 compared to the three months ended October 1, 2023 (in thousands, except percentage data):

Current wording

The table below sets forth the changes in interest expense and interest income and other income (expense), net from continuing operations for the three months ended March 30, 2025 compared to the three months ended March 31, 2024 (in thousands, except percentage data):

Previous wording

Interest expense relates primarily to our revolving line of credit facility and notes payable. Interest income and other income (expense), net, relates to net foreign exchange losses recorded, partially offset by interest earned in our money market accounts. Changes in interest expense are related to our revolving loan's interest rate variability. Interest expense for the third quarter of this year as compared to the same period in the prior year increased approximately $138 thousand, which was comprised of a $21 thousand increase in interest expense related to notes payable, a $119 thousand increase in interest expense and facility fees related to our revolving line of credit facility, and a $1 thousand decrease in interest expense related to IT hardware financing costs. Interest income and other income (expense), which is mostly comprised of bank fees, net foreign exchange losses, and refunds, remained essentially flat.

Current wording

Interest expense relates primarily to our revolving line of credit facility and notes payable. Interest income and other income (expense), net, relates to net foreign exchange losses recorded, partially offset by interest earned in our money market accounts. Changes in interest expense are related to varying levels of utilization of our revolving loan. Interest expense for the first quarter of this year as compared to the same period in the prior year increased approximately $28 thousand. Interest income and other income (expense), which is mostly comprised of bank fees, net foreign exchange losses, and refunds, decreased approximately $24 thousand.

Previous wording

The table below sets forth the changes in the provisions for income taxes in the three months ended September 29, 2024, compared to the three months ended October 1, 2023 (in thousands, except percentage data):

Current wording

The table below sets forth the changes in the provisions for income taxes from continuing operations in the three months ended March 30, 2025, compared to the three months ended March 31, 2024 (in thousands, except percentage data):

Previous wording

The Company recorded a net income tax expense of $13 thousand for the three months ended September 29, 2024 and a net income tax expense of $4 thousand for the three months ended October 1, 2023. The effective tax rate benefit for the third quarter ended September 29, 2024 was (0.60)% as compared to 0.20% for the same period in the prior year.

Current wording

The Company recorded a net income tax expense of $5 thousand for the three months ended March 30, 2025 and a net income tax expense of $7 thousand for the three months ended March 31, 2024. The effective tax rate benefit for the first quarter ended March 30, 2025 was (0.24)% as compared to 6.26% for the same period in the prior year.

Previous wording

Product revenue for the third quarter of 2024 compared to the third quarter of 2023 increased $0.7 million. The increase resulted primarily from increases in SaaS IP revenues and revenue from devices and royalties.

Current wording

Product revenue for the first quarter of 2025 compared to the first quarter of 2024 decreased $0.3 million resulting from a decrease in SaaS IP revenues.

Previous wording

In the third quarter of 2024, gross profit decreased $0.2 million, or 3%, compared to the same quarter in the prior year. The decrease in gross profit reflects a 19% net increase in cost of revenue, partially offset by a 5% increase in revenues. Revenue increased from the same quarter in the prior year due to increases in SaaS IP revenues and revenue from devices and royalties. The increase in cost of revenues was primarily due to the increased activity commensurate with the professional services revenue contracts. Contract manufacturing and outside services related to revenue contracts with customers substantially comprised this increase.

Current wording

In the first quarter of 2025, gross profit decreased $0.2 million, or 96%, compared to the same quarter in the prior year. The net decrease in gross profit reflects a 97% decrease in revenues, partially offset by a 98% net decrease in cost of revenue. Revenue decreased from the same quarter in the prior year due to lower SaaS IP revenues. The decrease in cost of revenue was the result of the discontinuation of operations at the SensiML entity.

Previous wording

Our selling, general and administrative (SG&A) expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, administration, human resources, and general management. The $1.0 million increase in SG&A expenses in the nine months ending September 29, 2024 as compared to the same period in the prior year, was primarily attributable to increases in equity and compensation expenses.

Current wording

Our selling, general and administrative (SG&A) expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, administration, human resources, and general management. SG&A expenses remained essentially flat.

Previous wording

Balance sheet amounts at September 29, 2024 compared to December 31, 2023 resulted from typical and usual activities in the normal course of business.

Current wording

Balance sheet amounts from continuing operations at March 30, 2025 compared to December 29, 2024 resulted from typical and usual activities in the normal course of business.

Previous wording

Total assets increased by approximately $1.9 million, primarily due to the capitalization of $7.8 million in property, plant, and equipment and internal-use software assets and a $1.4 million increase in other current assets, partially offset by $2.6 million in depreciation and amortization expense, a $2.2 million reduction in cash and cash equivalents due to payment of trade payables, a $2.2 million reduction in accounts receivable and contract assets due to the billing and collection of outstanding receivables, and a $0.2 million reduction in inventory.

Current wording

Total assets decreased by approximately $2.9 million, primarily due to a $4.3 million reduction in cash and cash equivalents due to greater payments than borrowings on the Company's revolving line of credit, a $0.8 million reduction in accounts receivable due to the collection of outstanding receivables, and a $0.5 million reduction in prepaid expenses and other current assets, partially offset by an increase of $1.5 million in contract assets due to the recognition of revenue subject to billing timing constraints and a $1.5 million net increase in equipment and internal-use software assets.

Previous wording

Liabilities decreased by approximately $2.1 million due to payment of trade payables of $1.8 million, accrued liabilities of $1.2 million, and debt and lease obligations of $1.1 million, as well as the recognition of deferred revenue of $0.6 million. This was partially offset by an increase of $2.6 million in notes payable due to the purchase of additional software assets through financing arrangements. Equity increased $4.0 million due to a $7.5 million increase in additional paid in capital arising from the sale of shares of common stock and recognition of stock-based compensation, partially offset by a $3.5 million net loss for the nine months ended September 29, 2024.

Current wording

Equity increased $1.4 million due to a $3.6 million increase in additional paid in capital arising from the sale of shares of common stock and recognition of stock-based compensation, partially offset by a $2.2 million net loss for the three months ended March 30, 2025.

Previous wording

We have financed our operations and capital investments through public and private offerings of our common stock, financing arrangements, operating leases, borrowings under a revolving line of credit, and cash flows from operations. In addition to our cash, cash equivalents and restricted cash of $22.4 million, as of September 29, 2024, other sources of liquidity included a $20.0 million drawn down from our revolving line of credit ("Revolving Facility") with Heritage Bank of Commerce (“Heritage Bank”), and $3.5 million in net proceeds from the sale of our common stock on March 13, 2024. Costs related to the offering were immaterial. Our restricted cash balance as of September 29, 2024 was $0.1 million and relates to amounts pledged as cash security for the use of credit cards.

Current wording

We have financed our operations and capital investments through public and private offerings of our common stock, financing arrangements, operating leases, borrowings under a revolving line of credit, and cash flows from operations. In addition to our cash and cash equivalents from continuing operations of $17.5 million, as of March 30, 2025, other sources of liquidity included a $15.0 million drawn down from our revolving line of credit ("Revolving Facility") with Heritage Bank of Commerce (“Heritage Bank”), and $2.7 million in net proceeds from the sale of our common stock on March 6, 2025 and as a part of our ATM Offering. Costs related to the offerings were immaterial.

Previous wording

On April 28, 2023, we 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, we 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, we cancelled the Second Revised Note and entered into a revised promissory note ("Current Note") with the customer, where the interest rate changed to 10.0% per annum. Accrued but unpaid interest will be compounded monthly, accruing from the date of the Current Note. Additionally, if not prepaid prior to the Current Note maturity date of the earlier of (i) 24 months from June 28, 2024 or (ii) the closing of the customer's Series B financing, the principal and all accrued and unpaid interest will be due and payable to us. If an event of default occurs, the interest rate will increase to 15.31%. All other terms of the Note remained the same. As of September 29, 2024, the related note receivable balance was $1.26 million, including $97 thousand in accrued interest.

Current wording

On April 28, 2023, we 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, we 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, we cancelled the Second Revised Note and entered into a revised promissory note ("Current Note") with the customer, where the interest rate changed to 10.0% per annum. Accrued but unpaid interest will be compounded monthly, accruing from the date of the Current Note. Additionally, if not prepaid prior to the Current Note maturity date of the earlier of (i) 24 months from June 28, 2024 or (ii) the closing of the customer's Series B financing, the principal and all accrued and unpaid interest will be due and payable to us. If an event of default occurs, the interest rate will increase to 15.31%. All other terms of the Note remained the same. As of March 30, 2025, the related note receivable balance was $1.32 million, including $160 thousand in accrued interest.

Previous wording

On March 21, 2023, we entered into common stock purchase agreements with certain investors for the sale of an aggregate of 450 thousand shares of common stock, in a registered direct offering pursuant to an effective shelf registration statement on Form S-3, resulting in net cash proceeds of approximately $2.3 million. Issuance costs related to the offering were immaterial. The purchase price for each share of common stock in the Share Placement was $5.14.

Current wording

On March 6, 2025, the Company entered into Common Stock Purchase Agreements with certain institutional investors for the sale of an aggregate of 256 thousand shares of common stock, par value $0.001, in a registered direct offering, 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 was $5.93.

Previous wording

On March 13, 2024, we entered into common stock purchase agreements with certain institutional investors and their affiliated entities for the sale of an aggregate of 223 thousand shares of common stock, par value $0.001, in a registered direct offering, resulting in net cash proceeds of approximately $3.5 million. Issuance costs related to the offering were negligible. The purchase price for each share of common stock was $16.00. See Note 9 for additional information.

Current wording

On 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, par value $0.001, in a registered direct offering, resulting in net cash proceeds of approximately $3.5 million. Issuance costs related to the offering were negligible. The purchase price for each share of common stock was $16.00.

Previous wording

We were in compliance with all the Heritage Bank Revolving Facility loan covenants as of September 29, 2024. As of September 29, 2024, we had $20.0 million outstanding on the Revolving Facility with an interest rate of 8.50%.

Current wording

We were in compliance with all the Heritage Bank Revolving Facility loan covenants as of March 30, 2025. As of March 30, 2025, we had $15.0 million outstanding on the Revolving Facility with an interest rate of 8.00%. On March 14, 2025, we entered into the Eighth Amendment (the "Eighth Amendment") to our Amended and Restated Loan and Security Agreement (as amended, the "Loan Agreement") dated December 21, 2018, with Heritage Bank of Commerce. The Eight 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.

Previous wording

We currently use our cash to fund our working capital, to accelerate the development of next-generation products, and for general corporate purposes. Based on past performance and current expectations, we believe that our existing cash and cash equivalents, together with $3.5 million gross cash proceeds from the March 13, 2024 financing, our revenues from operations, and the available financial resources from the Revolving Facility with Heritage Bank will be sufficient to fund our operations and capital expenditures and provide adequate working capital for the next twelve months.

Current wording

We currently use our cash to fund our working capital, to accelerate the development of next-generation products, and for general corporate purposes. Based on past performance and current expectations, we believe that our existing cash and cash equivalents, together with $2.8 million gross cash proceeds from the March 6, 2025 financing and February 25, 2025 ATM Offering, our revenues from operations, and the available financial resources from the Revolving Facility with Heritage Bank will be sufficient to fund our operations and capital expenditures and provide adequate working capital for the next twelve months.

Previous wording

Various factors affect our liquidity, including, among others: the level of revenue and gross profit as a result of the cyclicality of the semiconductor industry; the conversion of design opportunities into revenue; market acceptance of existing and new products including solutions based on our 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; the timing, milestones, and payments related to our government contracts; fluctuations in revenue as a result of product end-of-life; fluctuations in revenue as a result of the stage in the product life cycle of our customers’ products; costs of securing access to and availability of adequate manufacturing capacity; levels of inventories; wafer purchase commitments; customer credit terms; the amount and timing of research and development expenditures; the timing of new product introductions; production volumes; product quality; sales and marketing efforts; the value and liquidity of our investment portfolio; changes in operating assets and liabilities; the ability to obtain or renew debt financing and to remain in compliance with the terms of existing credit facilities; the ability to raise funds from the sale of equity in the company; the issuance and exercise of stock options and participation in our employee stock purchase plan; and other factors related to the uncertainties of the industry and global economics.

Current wording

Various factors affect our liquidity, including, among others: the level of revenue and gross profit as a result of the cyclicality of the semiconductor industry; the conversion of design opportunities into revenue; market acceptance of existing and new products including solutions based on our ArcticLink® and PolarPro® platforms, ArcticPro™, EOS S3 SoC, Quick AI solution, QuickAI™, Eclipse II products, and eFPGA IP license and professional services; the timing, milestones, and payments related to our government contracts; fluctuations in revenue as a result of product end-of-life; fluctuations in revenue as a result of the stage in the product life cycle of our customers’ products; costs of securing access to and availability of adequate manufacturing capacity; levels of inventories; wafer purchase commitments; customer credit terms; the amount and timing of research and development expenditures; the timing of new product introductions; production volumes; product quality; sales and marketing efforts; the value and liquidity of our investment portfolio; changes in operating assets and liabilities; the ability to obtain or renew debt financing and to remain in compliance with the terms of existing credit facilities; the ability to raise funds from the sale of equity in the company; the issuance and exercise of stock options and participation in our employee stock purchase plan; and other factors related to the uncertainties of the industry and global economics.

Previous wording

As of September 29, 2024, most of our cash, cash equivalents and restricted cash were invested in a money market account at Heritage Bank. As of September 29, 2024, our interest-bearing debt consisted of$3.1 million outstanding under notes payable and$20.0 million outstanding under our Revolving Facility. See Note 7, Debt Obligations, to the unaudited condensed consolidated financial statements for more details.

Current wording

As of March 30, 2025, most of our cash and cash equivalents were invested in a money market account at Heritage Bank. As of March 30, 2025, our interest-bearing debt consisted of$2.6 million outstanding under notes payable and$15.0 million outstanding under our Revolving Facility. See Note 8, Debt Obligations, to the unaudited condensed consolidated financial statements for more details.

Previous wording

In summary, our cash flows were as follows (in thousands):

Current wording

In summary, our consolidated cash flows were as follows (in thousands):