QUICKLOGIC Corp

Note1 — The Company and Basis of Presentation

QuickLogic Corporation ("QuickLogic" or the "Company") was founded in1988 and reincorporated in Delaware in1999. 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"), which consists primarily of Hard IP, low power, multi-core semiconductor system-on-chips ("SoCs"), and discrete FPGAs. 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 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.

In thefirst quarter of2025, 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 ASC205-20, Discontinued Operations. See Note3 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.

The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of the Company’s management, these statements have been prepared in accordance with the United States generally accepted accounting principles (“U.S. GAAP”), and include all adjustments, consisting only of normal recurring adjustments, necessary to provide a fair statement of results for the interim periods presented. The Company recommends that these interim unaudited condensed consolidated financial statements be read in conjunction with the Company's Form10-K for the year ended* December 29, 2024*, which was filed with the Securities and Exchange Commission (“SEC”) on* March 26, 2025*. Operating results for thethree andsix months ended* June 29, 2025* arenot necessarily indicative of the results that* may*be expected for the full fiscal year.

QuickLogic's fiscal year ends on the Sunday closest to* December**31* and each fiscal quarter ends on the Sunday closest to the end of each calendar quarter. QuickLogic'ssecond fiscal quarter for2025 and2024 ended on* June 29, 2025* and* June 30, 2024*, respectively.

Liquidity

The Company has financed its operations and capital investments through the sale of common stock, financing arrangements, operating leases, a revolving line of credit with Heritage Bank (the "Revolving Facility"), and cash flows from operations. As of* June 29, 2025*, the Company's principal sources of liquidity consisted of cash and cash equivalents from continuing operations of $19.2 million, inclusive of a $15.0 million advance from its Revolving Facility and $5.6 million in net proceeds from the Company's sale of common stock in thesix months ended* June 29, 2025*.

The Company was in compliance with all the Revolving Facility loan covenants as of* June 29, 2025*. As of* June 29, 2025*, the Company had $15.0 million outstanding on the Revolving Facility with an interest rate of 8.00%. In thefirst quarter of2025, 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 Eight Amendment, which became effective on March 17, 2025,amended the Loan Agreement to, among other things, extend the loan maturity date forone* year through* December 31, 2026.*

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. See Note10 for additional information.

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 mayoffer 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"). As of June 29, 2025,the Company sold 678 thousand shares under the ATM offering, resulting in net cash proceeds of approximately $4.1 million. Issuance costs related to the ATM Offering were $157 thousand. See Note10* for additional information.

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 $24 thousand. The purchase price for each share of common stock was $16.00. See Note10* for additional information.

On* April 28, 2023*, the Company converted accounts receivable for a customer in the amount of approximately $1.16 million to notes receivable (the "Original Note"). At the time, the Original Note bore an interest rate of 3.0% compounded monthly. On* June 28, 2023*, the Company cancelled the Original Note and entered into a revised promissory note ("Second Revised Note") with the customer, where the interest rate changed to 4.69% compounded monthly, or a 4.8% effective annual interest rate, accruing from the date of the Original Note. On* June 27, 2024*, the Company cancelled the Second Revised Note and entered into a revised promissory note ("Current Note") with the customer, where the interest rate changed to 10.0% per annum. Accrued but unpaid interest will be compounded monthly, accruing from the date of the Current Note. Additionally, ifnot prepaid prior to the Current Note maturity date of the earlier of (i)24 months from* June 28, 2024or (ii) the closing of the customer's Series B financing, the principal and all accrued and unpaid interest will be due and payable to the Company. If an event of default occurs, the interest rate will increase to 15.31%. All other terms of the Note remained the same. As of June 29, 2025*, the related note receivable balance was $1.36 million, including $192 thousand in accrued interest.

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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 $5.8 million gross cash proceeds from the* March 6, 2025* direct offering and* February 25, 2025ATM Offering and sales thereby, 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 nexttwelve* months.

Various factors affect the Company’s 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 the Company's ArcticLink® and PolarPro® platforms, ArcticPro™, EOSS3 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 its 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 its 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 the Company’s employee stock purchase plan; 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* 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. However, the Company cannot provide any assurance that it will be able to raise additional capital, if required, or that such capital will be available on terms acceptable to the Company. The inability of the Company to generate sufficient sales from its new product offerings and/or raise additional capital if needed could have a material adverse effect on the Company’s operations and financial condition, including its ability to maintain compliance with its lender’s financial covenants.

Principles of Consolidation

The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, and the applicable rules and regulations of the SEC, and include the accounts of QuickLogic and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

Foreign Currency

The functional currency of the Company's non-U.S. operations is the U.S. dollar. Accordingly, all monetary assets and liabilities of these foreign operations are translated into U.S. dollars at current period-end exchange rates and non-monetary assets and related elements of expense are translated using historical exchange rates. Income and expense elements are translated to U.S. dollars using the average exchange rates in effect during the period. Gains and losses from the foreign currency transactions of these subsidiaries are recorded as interest income and other expense, net in the unaudited condensed consolidated statements of operations, and are insignificant for all periods presented.

Uses of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of commitments and contingencies at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

The methods, estimates, and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results it reports in its 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 it to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.

Although these estimates are based on the Company’s knowledge of current events and actions it* mayundertake in the future, actual results mayultimately materially differ from these estimates and assumptions. Areas where management uses subjective judgment include, but arenot* limited to, revenue recognition, inventory valuation, including the identification of excess quantities, market value, and obsolescence, and valuation of goodwill and long-lived and intangible assets. 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* mayhave a material impact on the Company's consolidated financial statements. For additional information, please refer to the Company's most recent Annual Report on Form10*-K, which was filed with the SEC on* March 26, 2025*.

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Concentration of Risk

The Company's accounts receivable and note receivable are denominated in U.S. dollars and are derived primarily from sales to customers located in North America, Asia Pacific, and Europe. The Company performs ongoing credit evaluations of its customers and doesnot require collateral. See Note13, Information Concerning Segments, Product Lines, Geographic Information, Accounts Receivable, and Revenue Concentration, for information regarding concentrations associated with accounts receivable.

As of* June 29, 2025* and* December 29, 2024*, the Company had $15.0 million and $18.0 million, respectively, of revolving debt outstanding with Heritage Bank; the revolving debt carried an interest rate of 8.00% per annum. Heritage Bank has afirst priority security interest in substantially all of the Company's tangible and intangible assets to secure any outstanding amounts under the agreement. The Company was in compliance with all loan covenants under the agreement as of the end of the current reporting period. The maturity date for advances under the revolving debt agreement is* December 31, 2026*. At* June 29, 2025*, the Company had utilized a significant portion of the revolving debt, and as a result, it maintains a substantial amount of cash deposits with Heritage Bank. The concentration of cash withone financial institution poses certain risks.

For instance, adverse developments affecting financial institutions, companies in the financial services industry, or the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance, could adversely impact the stability of Heritage Bank, leading to additional financial risks for the Company.

Any material decline in available funding or the Company's ability to access its cash, cash equivalents, and liquidity resources, inclusive of those at Heritage Bank, could adversely impact its ability to meet its operating expenses, financial and contractual obligations, or result in breaches of its contractual obligations. Any of these impacts could have material adverse impacts on the Company's operations and liquidity.

Note2 — Significant Accounting Policies

During thethree andsix months ended* June 29, 2025*, there wereno changes to the Company's significant accounting policies from its disclosures in the Annual Report on Form10-K for the year ended* December 29, 2024*. For a discussion of the significant accounting policies, please see the Annual Report on Form10-K for the fiscal year ended* December 29, 2024*, filed with the SEC on* March 26, 2025*.

Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to current period presentation. Further, certain prior period disclosures in the footnotes to the condensed consolidated financial statements have been modified to conform with current period presentation.

In thethree months ended* June 29, 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 during thethree* months ended* June 29, 2025.As of June 29, 2025,*utilizing the probability-of-default method to determine the current expected credit loss for the Company's related note receivable, the Company determined the associated current expected credit loss to be de minimis.

For its trades receivable, the Company provides an allowance for credit losses based on historical experience and a specific identification basis. As of* June 29, 2025and December 29, 2024,the allowance for credit losses from continuing operations was $0 thousand. The Company didnot* record any credit loss expense in continuing operations for thesix months ended* June 29, 2025and June 30, 2024*.

During thethree andsix months ended* June 29, 2025*, the Company recognized $45 thousand and $94 thousand in matching contribution expenses as a part of the employer match program for its401(k) post-retirement benefit plan.

Recent Accounting StandardsNot Yet Adopted**

In* November 2024,the FASB issued ASU2024*-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220*-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, 2026and 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 ASU2024*-03 isnot expected to have a significant impact on the Company's consolidated financial statements.

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Note3 — Discontinued Operations

In thefirst quarter of2025, 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 cutting-edge software enables ultra-low power IoT endpoints that implement AI to transform raw sensor data into meaningful insight at the device itself. Revenue streams from SensiML include Software as a Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services. Preliminary discussions have commenced with potential strategic partners regarding the possible sale of SensiML of its assets. As of* January 7, 2025,the Company began accounting for the SensiML subsidiary in accordance with ASC205*-20, Discontinued Operations.

As of* June 29, 2025,there havenot* been any new material developments regarding the disposal of SensiML. The Company expects to complete the disposal of SensiML within12 months from the announcement date.

The following table provides details relating to major classes of assets and liabilities for discontinued operations classified as held for sale as of* June 29, 2025*, and* December 29, 2024* (in thousands):

The following table provides details related to internal-use software held by SensiML, the business held for sale as of* June 29, 2025*, and* December 29, 2024* (in thousands):

The following table provides details related to intangible assets held by SensiML, the business held for sale as of* June 29, 2025*, and* December 29, 2024* (in thousands):

The Company recorded depreciation and amortization expense for discontinued operations of $0 for thethree andsix months ended* June 29, 2025* and $0.2 million and $0.4 million for thethree andsix months ended* June 30, 2024*, respectively.No interest was capitalized for any period presented. Additionally, as of* January 7, 2025,*depreciation and amortization of assets held by SensiML has been discontinued.

Depreciation and amortization expense for thethree andsix months ended* June 30, 2024* included approximately $168 thousand and $327 thousand, 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* June 29, 2025and December 29, 2024,the allowance for credit losses from discontinued operations was $30 thousand. The Company didnot* record any credit loss expense in discontinued operations for thesix months ended* June 29, 2025and June 30, 2024*.

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The following table provides details relating to major line items constituting income (loss) for discontinued operations classified as held for sale for thethree andsix months ended* June 29, 2025and June 30, 2024* (in thousands):

For thethree andsix months ended* June 29, 2025*, the Company has incurred $21 thousand and $162 thousand, respectively, in costs in connection with the disposal of SensiML. These costs are primarily comprised ofone-time termination benefits and are included within the 'Restructuring Costs' line item in the Company's unaudited condensed consolidated statement of operations, as well as in the table above. The Company doesnot expect total costs incurred in connection with the disposal of SensiML to differ materially from the expenses already recognized in thesix months ended* June 29, 2025*.

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

Contract liabilities related to discontinued operations were $0 thousand and $10 thousand as of* June 29, 2025* and* December 29, 2024*. In thesix months ended* June 29, 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 table below presents disaggregated revenues for discontinued operations by geographical location (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.

The following distributors and customers accounted for10% or more of the Company's revenue from discontinued operations for the periods presented:

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The following distributors and customers accounted for10% or more of the Company's accounts receivable from discontinued operations as of the dates presented:

The following table provides the expenses from discontinued operations related to operating leases for thethree andsix months ended* June 29, 2025and June 30, 2024* (in thousands):

Stock-based compensation expense from discontinued operations for thethree andsix months ended* June 29, 2025and June 30, 2024* was as follows (in thousands):

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, atno 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 $0 and ($32 thousand) for thethree andsix months ended* June 29, 2025* and $72 thousand and $154 thousand for thethree andsix months ended* June 30, 2024*, respectively.

Total stock-based compensation in discontinued operations related to the Company's Employee Stock Purchase Planwas approximately $0 for thethree andsix months ended* June 29, 2025*, respectively and approximately $1 thousand for thethree andsix months ended* June 30, 2024*, respectively.

The following table provides cash flows from discontinued operations (in thousands):

The Company capitalized certain stock-based compensation amounts to capitalized internal-use software related to discontinued operations of $0 thousand for thethree andsix months ended* June 29, 2025* and $46 thousand and $122 thousand for thethree andsix months ended* June 30, 2024*, respectively. The capitalized stock-based compensation amounts relate to compensation for employees involved in the development of capitalized internal-use software.

Note4 — Net Income (Loss) Per Share

Basic net income (loss) per share was computed by dividing net income (loss) available by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share was computed using the weighted average number of common shares outstanding during the period plus potentially dilutive common shares outstanding during the period under the treasury stock method. In computing diluted net income (loss) per share, the weighted average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options and warrants. For periods in which the Company has reported a net loss, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders as dilutive common shares arenot assumed to have been issued if their effect is anti-dilutive. For periods in which the Company has reported a net income, diluted net income per share attributable to common stockholders is different from basic net income per share attributable to common stockholders as dilutive common shares would increase the amount of shares outstanding reduced by the amounts of treasury shares repurchased from the proceeds at the average market price for the period.

For thethree andsix months ended* June 29, 2025and June 30, 2024*,643 thousand and 703 thousand shares, respectively, of common stock associated with equity awards and the estimated number of shares to be purchased under the current offering period of the2009 Employee Stock Purchase Plan were outstanding. These shares werenot included in the computation of diluted net loss per share, as they were considered anti-dilutive due to the net losses the Company experienced during this period.

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Note5 — Balance Sheet Components

The following table provides details relating to certain balance sheet line items from continuing operations as of* June 29, 2025*, and* December 29, 2024* (in thousands):

As of* June 29, 2025* and* December 29, 2024*, work-in-process ("WIP") inventories, net consist primarily of $0.4 million and $0.5 million, respectively, of die wafers and $0.9 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 $1.78 million and $4.07 million in pre-production design and development costs as tooling to be utilized under its long-term professional services contracts for thethree andsix months ended* June 29, 2025*, respectively. $0.32 million and $4.28 million in pre-production design and development costs were capitalized as tooling for thethree andsix months ended* June 30, 2024*, respectively.

The Company recorded depreciation and amortization expense for continuing operations of $1.3 million and $2.6 million for thethree andsix months ended* June 29, 2025*, respectively, and $0.7 million and $1.3 million for thethree andsix months ended* June 30, 2024*, respectively. No interest was capitalized for any period presented.

Depreciation and amortization expense included approximately $39 thousand and $70 thousand of amortization expense related to capitalized internal-use software for thethree andsix months ended* June 29, 2025*, respectively, and $14 thousand and $28 thousand for thethree andsix months ended* June 30, 2024*, respectively.

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Note6 — Property, Plant, and Equipment

Property, plant, and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation begins at the time the asset is placed in service. Maintenance and repairs are charged to operations as incurred. Depreciation is computed using the straight-line method over the following estimated useful lives of the assets:

The amortization period of leasehold improvements made at the inception of the lease is directly related to the initial lease term, while the amortization period for subsequent leasehold improvements is directly related to the initial lease term adjusted for extensions.

Note7 — Intangible Assets

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 as of June 29, 2025* (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 at* June 29, 2025* (in thousands):

Note8 — Debt Obligations

Revolving Line of Credit

As of* June 29, 2025* and* December 29, 2024*, the Company had$15.0 million and $18.0 million of revolving debt outstanding, respectively, with an interest rate of 8.00% per annum. Heritage Bank has afirst priority security interest in substantially all of the Company's tangible and intangible assets to secure any outstanding amounts under the agreement. The Company was in compliance with all loan covenants under the agreement as of the end of the current reporting period. Related interest expenses and annual facility fees recognized were $71 thousand and$121 thousand for thethree andsix months ended* June 29, 2025*, respectively, and were $15 thousand and $56 thousand for thethree andsix months ended* June 30, 2024*, respectively.

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Financing Arrangements

The Company has acquired certain assets consisting of tooling for performance under revenue contracts with customers, with smaller amounts related to IT infrastructure components, that were financed through financing arrangements. The following table provides details for assets financed through financing arrangements as of* June 29, 2025*, and* December 29, 2024* (in thousands):

The following table provides detail on payments related to financing arrangements for thethree andsix months ended* June 29, 2025and June 30, 2024* (in thousands):

The following table provides the details of future payments for assets purchased through financing arrangements as of* June 29, 2025* (in thousands):

Note9 — 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 and have lease terms ofone tothree years. The Company maintains sales offices out of which it conducts sales and marketing activities in various countries outside of the United States which are rented under short-term leases. The Company has elected the practical expedient to apply to recognition requirements to short-term leases and recognizes rent payments on short-term leases on a straight-line basis over the lease term.

The following table provides the expenses from continuing operations related to operating leases (in thousands):

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The following table provides the details of supplemental cash flow information (in thousands):

Non-cash ROU assets related to operating leases included in the operating cash flows for continuing operations for thesix months ended* June 29, 2025and June 30, 2024* were $144 thousand and $131 thousand, respectively.

The following table provides the details of right-of-use assets and lease liabilities as of* June 29, 2025* and* December 29, 2024* (in thousands):

The following table provides the details of future lease payments for operating leases as of* June 29, 2025* (in thousands):

The following table provides the details of lease terms and discount rates as of* June 29, 2025* and* December 29, 2024*:

(1) The operating lease relates to the Company's headquarters in San Jose, CA. The lease term expires on* June 14, 2027*.

Note10 —** Capital Stock**

*** Issuance of Common Stock***

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, 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.

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 mayoffer 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 mayinclude, but isnot* 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* June 29, 2025,*the Company sold 678,275 shares under the ATM offering, resulting in net cash proceeds of approximately $4.1 million. Issuance costs related to the offering were $157 thousand.

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 222,500 shares of common stock, par value $0.001, in a registered direct offering, resulting in net cash proceeds of approximately $3.5 million. The purchase price for each share of common stock was $16.00. The per share purchase price reflects azero* discount based upon the10-day volume weighted average price on the day the pricing was agreed. Issuance costs related to the offering were $24 thousand.

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On* August 17, 2022,the Company filed a Registration Statement on Form S-3 (FileNo.* 333-266942) with the SEC, under which it* maysell, from time-to-time common stock, preferred stock, depositary shares, warrants, debt securities, and units, individually or as units comprised ofone* or more of the other securities or a combination thereof. The Company's registration statement became effective on* August 26, 2022.*

Note11 — Stock-Based Compensation

Stock-based compensation expense from continuing operations included in the Company's unaudited condensed consolidated financial statements for thethree andsix months ended* June 29, 2025and June 30, 2024* was as follows (in thousands):

The Company capitalized certain stock-based compensation amounts to capitalized internal-use software and tooling, net related to continuing operations of$9 thousand and $28 thousand for thethree andsix months ended* June 29, 2025*, respectively, and $21 thousand and $30 thousand for thethree andsix months ended* June 30, 2024*, respectively. The capitalized stock-based compensation amounts relate to compensation for employees involved in the development of capitalized internal-use software and tooling.

Stock-Based Compensation Award Activity

The following table summarizes the activity in the shares available for grant under the2019 Plan during thesix months ended* June 29, 2025* (in thousands):

Stock Options

The following table summarizes stock options outstanding and stock option activity under the2009 Plan and the2019 Plan, and the related weighted average exercise price for thesix months ended* June 29, 2025*:

No stock options were granted or exercised during thesix months ended* June 29, 2025and June 30, 2024*. No stock options expired during thesix months ended* June 29, 2025.Stock options equivalent to 6 thousand shares expired during thesix* months ended* June 30, 2024.*

Total stock-based compensation related to stock options was $0 during thesix months ended* June 29, 2025and June 30, 2024*.

Restricted Stock Units

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, atno 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 in continuing operations related to RSUs and PRSUs were approximately$0.8 million and $1.7 million for thethree andsix months ended* June 29, 2025*, respectively and approximately $0.9 million and $2.3 million for thethree andsix months ended* June 30, 2024*, respectively.

As of* June 29, 2025and June 30, 2024*, there was approximately$1.9 million and $2.4 million, respectively, in unrecognized stock-based compensation expense related to RSUs. The remaining unrecognized stock-based compensation expense as of* June 29, 2025* is expected to be recorded over a weighted average period of 0.96 years.

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A summary of activity for the Company's RSUs and PRSUs for thesix months ended* June 29, 2025* is as follows:

Employee Stock Purchase Plan

Total stock-based compensation in continuing operations related to the Company's Employee Stock Purchase Planwas approximately$20 thousand and $60 thousand for thethree andsix months ended* June 29, 2025*, respectively and approximately $12 thousand and $40 thousand for thethree andsix months ended* June 30, 2024*, respectively.

Note12 — Income Taxes

The Company recorded a net income tax expense (benefit) from continuing operations on the unaudited condensed consolidated statement of operations of $1 thousand and ($6 thousand) for thethree months ended* June 29, 2025and June 30, 2024*, respectively. Additionally, the Company recorded a net income tax expense (benefit) from continuing operations on the consolidated statement of operations of $6 thousand and $1 thousand for thesix months ended* June 29, 2025and June 30, 2024*, respectively. The difference between the estimated annual effective tax expense (benefit) for fiscal year2025 of (0.46%) and the U.S. federal statutory tax rate of 21% is primarily due to the Company's valuation allowance movement in each period presented. It is more likely thannot that the Company willnot realize the federal, state, and certain foreign deferred tax assets as of* June 29, 2025*. As such, the Company continues to maintain a full valuation allowance against all of its US and certain foreign net deferred tax assets as of* June 29, 2025*.

Note13 — Information Concerning Segments, Product Lines, Geographic Information, Accounts Receivable, and Revenue Concentration

The Company identifies its business segments based on business activities, management responsibility, and geographic location. For all periods presented, the Company operated in a single reportable business segment.

The Company hasone reportable operating segment based on how its Chief Operating Decision Maker (CODM) manages the business and in a manner consistent with the availability of discrete financial information and the internal reporting provided to the CODM. The CODM, the Company's Chief Executive Officer (CEO), reviews detailed income statements, balance sheets, and sales reports in order to assess performance of the Company. The CODM doesnot review assets at a different asset level or category than at the consolidated level and the consolidated statements of operations are presented to the CODM without further disaggregation. Significant segment expenses also include depreciation, amortization, and stock-based compensation, which are disclosed within the consolidated statements of cash flows. The Company doesnot have any significant intra-entity sales or transfers.

Sales, operating income, and net income are some of the key variables monitored by the CODM and management when determining the Company's financial condition and operating performance. The CODM uses sales, operating income (loss), and net income (loss) to evaluate income generated in deciding whether to reinvest profits into the segment or to use such profits for other purposes, such as for acquisitions or share repurchases. These key variables are also used to monitor budget versus actual results, as well as in competitive analyses by benchmarking to the Company’s competitors.

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

New products revenue from continuing operations consists of revenues from the sale of hardware products manufactured on180 nanometer or smaller semiconductor processes, eFPGA IP license and eFPGA-related professional services, and QuickAI. Mature products include all products produced on semiconductor processes larger than180 nanometer.

The following is a breakdown of new product revenue from continuing operations (in thousands):

eFPGA IP and professional services revenue from continuing operationswas$2.6 million and $6.2 million for thethree andsix months ended* June 29, 2025*, respectively and $2.5 million and $6.6 million for thethree andsix months ended* June 30, 2024*, respectively, which was primarily professional services revenue.

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Contract assets were $3.7 million and $2.7 million as of* June 29, 2025* and* December 29, 2024*, respectively. Contract liabilities were $0.4 million as of* June 29, 2025* and $0.4 million as of* December 29, 2024*. In thesix months ended* June 29, 2025,all $0.4 million of the deferred revenues outstanding as of December 29, 2024* were recognized by the Company as revenue. Of the $0.4 million in deferred revenues as of* June 29, 2025,the Company expects to recognize these revenues using the input time-based and output deliverable-based methods through the end ofQ2'26.* Of its remaining unsatisfied performance obligationsnot currently on the Company's balance sheet, the Company expects to recognize $1.1 million by the end ofQ1'26, either through the input time-based method or the output method, recognizing revenue as deliverables such as IP and various technologies and training are transferred or provided to the customer. For the majority of the Company's contracts, payment schedules are in place and cash receipts willnot always follow the timeline of the Company's revenue recognition policies.

The tables below present disaggregated revenues for continuing operations by geographical location. Revenue attributed to geographic location is based on the destination of the product or service. Substantially all revenues in North America were in the United States. Revenue from continuing operations in the United States was $2.9 million, or 80% of total revenue from continuing operations and $3.4 million, or 83% of total revenue from continuing operations for thethree months ended* June 29, 2025and June 30, 2024*, respectively, and $6.8 million, or 85% of total revenue from continuing operations and $7.9 million, or 81% of total revenue from continuing operations for thesix months ended* June 29, 2025and June 30, 2024*, respectively.

The following is a breakdown of revenue from continuing operations by destination (in thousands):

The following distributors and customers accounted for10% or more of the Company's revenue from continuing operations for the periods presented:

The following distributors and customers accounted for10% or more of the Company's accounts receivable from continuing operations as of the dates presented:

Note14 — Commitments and Contingencies

Commitments

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 financing arrangements. Purchase obligations are largely comprised of open purchase order commitments to suppliers and to subcontractors under professional services agreements. The Company's risk associated with the purchase obligations under professional services agreements is limited to the termination liability provisions within those contracts, and as such, it doesnot believe they represent a material liquidity risk to the Company.

Certain wafer manufacturers require the Company to forecast wafer starts several months in advance. The Company is committed to taking delivery of and paying for a portion of the forecasted wafer volume. As of* June 29, 2025*, the Company had $172 thousand in outstanding commitments for the purchase of wafer inventory.

Purchase Obligations

Purchase obligations represent contractual agreements to purchase goods or services entered into in the ordinary course of business. Purchase obligations are legally binding and amongst other things, specify a minimum or a range of quantities, pricing, and approximate timing of the transaction. Purchase obligations include amounts that are recorded on the Company's consolidated balance sheets, as well as amounts that arenot recorded on the Company's consolidated balance sheets. As of* June 29, 2025*, total outstanding purchase obligations for other goods and services were $1.5 million due within the nexttwelve months,not recorded on the Company's unaudited condensed consolidated balance sheet.

Litigation

From time to time, the Company* maybecome involved in legal actions arising in the ordinary course of business including, butnot* limited to, intellectual property infringement and collection matters. Absolute assurance cannot be given that any suchthird-party assertions will be resolved without costly litigation; in a manner that isnot adverse to the Company’s financial position, results of operations or cash flows; or without requiring royalty or other payments which* may*adversely impact gross profit.

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