QUICKLOGIC Corp

Previous wording

Our new products include the following: eFPGA IP Licensing business and associated professional services, consisting of development and integration of eFPGA technology into custom semiconductor solutions and our silicon products consisting of EOS™, QuickAI™, ArcticLink® III, PolarPro®3, PolarPro II, PolarPro, and Eclipse II products. In addition to delivering our own semiconductor solutions, our new products category includes our AI/ML Software Platform from our wholly-owned subsidiary company, SensiML, which includes Software as a Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services, all of which are also included in the new products revenue category. Our mature products include primarily FPGA families named PASIC®3 and QuickRAM®, as well as programming hardware and design software. We currently have a total of five patent applications pending.

Current wording

Our new products include the following: eFPGA IP Licensing business and associated professional services, consisting of development and integration of eFPGA technology into custom semiconductor solutions and our silicon products consisting of EOS™, QuickAI™, ArcticLink® III, PolarPro®3, PolarPro II, PolarPro, and Eclipse II products. In addition to delivering our own semiconductor solutions, our new products category includes our AI/ML Software Platform from our wholly-owned subsidiary company, SensiML, which includes Software as a Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services, all of which are also included in the new products revenue category. Our mature products include primarily FPGA families named PASIC®3 and QuickRAM®, as well as programming hardware and design software. We currently have a total of four patent applications pending.

Previous wording

Customers typically order our products through our distributors. Currently, we have ten active distributors in North America and a network of fourteen 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.

Current wording

Customers typically order our products through our distributors. Currently, we have fourteen active distributors in North America and a network of sixteen 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 second quarter of 2025, we generated total revenue from continuing operations of $3.7 million, a decrease of 15% compared to the prior quarter, and a decrease of 10% compared to the same quarter last year. Our new product revenue from continuing operations in the second quarter was $2.9 million, a decrease of 22% from the prior quarter and a decrease of 4% from the second quarter of 2024. Our mature product revenue from continuing operations was $0.8 million in the second quarter of 2025, an increase of 33% compared to the prior quarter, and a decrease of 28% compared to the second quarter of 2024. We expect our mature product revenue to continue to fluctuate over time.

Current wording

During the third quarter of 2025, we generated total revenue from continuing operations of $2.0 million, a decrease of 45% compared to the prior quarter, and a decrease of 52% compared to the same quarter last year. Our new product revenue from continuing operations in the third quarter was $1.0 million, a decrease of 67% from the prior quarter and a decrease of 73% from the third quarter of 2024. Our mature product revenue from continuing operations was $1.1 million in the third quarter of 2025, an increase of 40% compared to the prior quarter, and an increase of 46% compared to the third quarter of 2024. We expect our mature product revenue to continue to fluctuate over time.

Previous wording

During the second quarter of 2025, we generated total revenue from discontinued operations of $0 thousand, a decrease of 100% compared to the prior quarter, and a decrease of 100% compared to the same quarter last year.

Current wording

During the third quarter of 2025, we generated total revenue from discontinued operations of $0 thousand, consistent with the prior quarter, and a decrease of 100% compared to the same quarter last year.

Previous 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 $2.7 million for the second quarter of 2025, as compared to a net loss from continuing operations of $2.1 million in the prior quarter and a net loss from continuing operations of $1.2 million for the second quarter of 2024.

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 $4.0 million for the third quarter of 2025, as compared to a net loss from continuing operations of $2.7 million in the prior quarter and a net loss from continuing operations of $1.8 million for the third quarter of 2024.

Previous wording

We reported a net loss from discontinued operations of $9 thousand for the second quarter of 2025, as compared to a net loss from discontinued operations of $0.1 million in the prior quarter and a net loss from discontinued operations of $0.3 million for the second quarter of 2024.

Current wording

We reported a net loss from discontinued operations of $3 thousand for the third quarter of 2025, as compared to a net loss from discontinued operations of $9 thousand in the prior quarter and a net loss from discontinued operations of $0.3 million for the third quarter of 2024.

Previous wording

As of June 29, 2025, we had one operating lease with a remaining lease term of 1.92 years. The operating lease relates to our company headquarters in San Jose, CA.

Current wording

As of September 28, 2025, we had one operating lease with a remaining lease term of 1.67 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 six months ended June 29, 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.

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 and nine months ended September 28, 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

Product revenue for the second quarter of 2025 compared to the second quarter of 2024 decreased $0.4 million. The decrease resulted from decreases in revenues from sales of new devices and royalty revenues.

Current wording

Product revenue for the third quarter of 2025 compared to the third quarter of 2024 decreased $2.2 million. The decrease resulted from decreases in eFPGA IP and professional services revenues.

Previous wording

eFPGA IP revenue for the three months ended June 29, 2025 and June 30, 2024 was $2.6 million and $2.5 million, respectively, which was primarily professional services revenue.

Current wording

eFPGA IP revenue for the three months ended September 28, 2025 and September 29, 2024 was $0.7 million and $3.4 million, respectively, which was primarily professional services revenue.

Previous wording

In the second quarter of 2025, gross profit decreased $1.3 million, or 57%, compared to the same quarter in the prior year. The net decrease in gross profit reflects a 10% decrease in revenues, combined with a 47% net increase in cost of revenue. Revenue decreased from the same quarter in the prior year due to lower device sales and royalty revenues. 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 increased labor costs.

Current wording

In the third quarter of 2025, gross profit decreased $3.0 million, or 119%, compared to the same quarter in the prior year. The net decrease in gross profit reflects a 52% decrease in revenues, combined with a 45% net increase in cost of revenue. Revenue decreased from the same quarter in the prior year due to decreased eFPGA IP and professional services revenues as the result of timing for related contracts. 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 increased labor costs.

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 second quarter of 2025 as compared to the same quarter in 2024 decreased $0.2 million, primarily the result of increased labor allocations to Cost of Revenue for fulfillment of revenue contracts.

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 third quarter of 2025 as compared to the same quarter in 2024 decreased $0.4 million, primarily due to increased labor allocations to Cost of Revenue for revenue projects.

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 $0.1 million decrease in SG&A expenses in the second quarter of 2025, as compared to the second quarter of 2024, was attributable primarily to decreased administrative expenses, partially offset by an increase in sales and marketing 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. The $0.2 million decrease in SG&A expenses in the third quarter of 2025, as compared to the third quarter of 2024, was attributable primarily to decreased bonuses and incentives in administrative expenses.

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 varying levels of utilization of our revolving loan. Interest expense for the second quarter of this year as compared to the same period in the prior year increased approximately $69 thousand. Interest income and other income (expense), which is mostly comprised of bank fees, net foreign exchange losses, and refunds, decreased approximately $34 thousand.

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 third quarter of this year as compared to the same period in the prior year decreased approximately $100 thousand. Interest income and other income (expense), which is mostly comprised of bank fees, net foreign exchange losses, and refunds, decreased approximately $35 thousand.

Previous wording

The Company recorded a net income tax expense of approximately $1 thousand for the three months ended June 29, 2025 and a net income tax benefit of $6 thousand for the three months ended June 30, 2024. The effective tax rate for the second quarter ended June 29, 2025 was (0.13)% as compared to 0.37% for the same period in the prior year.

Current wording

The Company recorded a net income tax benefit of approximately $1 thousand for the three months ended September 28, 2025 and a net income tax expense of $13 thousand for the three months ended September 29, 2024. The effective tax rate for the third quarter ended September 28, 2025 was (0.12)% as compared to (0.60)% for the same period in the prior year.

Previous wording

The table below sets forth the changes in revenue from continuing operations in the six months ended June 29, 2025 compared to the six months ended June 30, 2024 (in thousands, except percentage data):

Current wording

The table below sets forth the changes in revenue from continuing operations in the nine months ended September 28, 2025 compared to the nine months ended September 29, 2024 (in thousands, except percentage data):

Previous wording

Product revenue for the second quarter of 2025 compared to the second quarter of 2024 decreased $1.8 million. The decrease resulted from decreases in professional services eFPGA revenues, revenues from sales of new and mature devices, and royalty revenues.

Current wording

Product revenue for the third quarter of 2025 compared to the third quarter of 2024 decreased $3.9 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 from continuing operations in the six months ended June 29, 2025 compared to the six months ended June 30, 2024 (in thousands, except percentage data):

Current wording

The table below sets forth the changes in new product revenue from continuing operations in the nine months ended September 28, 2025 compared to the nine months ended September 29, 2024 (in thousands, except percentage data):

Previous wording

eFPGA IP revenue for the six months ended June 29, 2025 and June 30, 2024 was $6.2 million and $6.6 million, respectively, which was primarily professional services revenue.

Current wording

eFPGA IP revenue for the nine months ended September 28, 2025 and September 29, 2024 was $6.9 million and $10.0 million, respectively, which was primarily professional services revenue.

Previous wording

The table below sets forth the changes in gross profit from continuing operations for the six months ended June 29, 2025 compared to the six months ended June 30, 2024 (in thousands, except percentage data):

Current wording

The table below sets forth the changes in gross profit from continuing operations for the nine months ended September 28, 2025 compared to the nine months ended September 29, 2024 (in thousands, except percentage data):

Previous wording

In the six months ended June 29, 2025, gross profit decreased $3.2 million, or 53%, compared to the same period in the prior year. The net decrease in gross profit reflects an 18% decrease in revenues, combined with a 39% net increase in cost of revenue. Revenue decreased from the same period in the prior year due to the timing of Department of Defense contracts and lower device sales and royalty revenues. 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 increased labor and stock-based compensation costs. Additionally, there were slight offsets from decreased consulting expenses.

Current wording

In the nine months ended September 28, 2025, gross profit decreased $6.2 million, or 72%, compared to the same period in the prior year. The net decrease in gross profit reflects a 28% decrease in revenues, combined with a 41% net increase in cost of revenue. Revenue decreased from the same period in the prior year due to the timing of Department of Defense contracts. The net increase in cost of revenues was primarily due to increases in depreciation and amortization related to tooling for revenue contracts and direct tooling costs, as well as increases in labor cost allocations.

Previous wording

The table below sets forth the changes in operating expenses from continuing operations for the six months ended June 29, 2025 compared to the six months ended June 30, 2024 (in thousands, except percentage data):

Current wording

The table below sets forth the changes in operating expenses from continuing operations for the nine months ended September 28, 2025 compared to the nine months ended September 29, 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 six months ended June 29, 2025 as compared to the same period in 2024 decreased $0.2 million, primarily the result of increased labor allocations to Cost of Revenue for fulfillment of revenue contracts, partially offset by increases in amortization expense associated with tooling.

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 nine months ended September 28, 2025 as compared to the same period in 2024 decreased $0.6 million, primarily the result of increased labor allocations to Cost of Revenue for fulfillment of revenue contracts and decreased incentive compensation, partially offset by increases in amortization expense associated with tooling.

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 $0.1 million increase in SG&A expenses in the six months ended June 29, 2025, as compared to the same period in 2024, was attributable primarily to slight increases in compensation and incentives.

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 decrease in SG&A expenses in the nine months ended September 28, 2025, as compared to the same period in 2024, was attributable primarily to reduced compensation and incentives.

Previous wording

The $0.3 million in impairment charges for the three months ended June 29, 2025 was attributable to the impairment of the Company's non-marketable equity investment.

Current wording

The $0.3 million in impairment charges for the nine months ended September 28, 2025 was attributable to the impairment of the Company's non-marketable equity investment.

Previous wording

The $75 thousand in restructuring costs for the six months ended June 29, 2025 was primarily attributable to severance payments for employees within QuickLogic related to the SensiML discontinued operations.

Current wording

The $75 thousand in restructuring costs for the nine months ended September 28, 2025 was primarily attributable to severance payments for employees within QuickLogic related to the SensiML discontinued operations.

Previous wording

The table below sets forth the changes in interest expense and interest income and other income (expense), net from continuing operations for the six months ended June 29, 2025 compared to the six months ended June 30, 2024 (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 nine months ended September 28, 2025 compared to the nine months ended September 29, 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 varying levels of utilization of our revolving loan. Interest expense for the six months ended June 29, 2025 as compared to the same period in the prior year increased approximately $97 thousand. Interest income and other income (expense), which is mostly comprised of bank fees, net foreign exchange losses, and refunds, increased approximately $58 thousand.

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 nine months ended September 28, 2025 as compared to the same period in the prior year decreased approximately $3 thousand. Interest income and other income (expense), which is mostly comprised of bank fees, net foreign exchange losses, and refunds, increased approximately $23 thousand.

Previous wording

The table below sets forth the changes in the provisions for income taxes from continuing operations in the six months ended June 29, 2025, compared to the six months ended June 30, 2024 (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 nine months ended September 28, 2025, compared to the nine months ended September 29, 2024 (in thousands, except percentage data):

Previous wording

The Company recorded a net income tax expense of $6 thousand for the six months ended June 29, 2025 and a net income tax expense of $1 thousand for the six months ended June 30, 2024. The effective tax rate for the six months ended June 29, 2025 was (0.13)% as compared to (0.10)% for the same period in the prior year.

Current wording

The Company recorded a net income tax expense of $5 thousand for the nine months ended September 28, 2025 and a net income tax expense of $14 thousand for the nine months ended September 29, 2024. The effective tax rate for the nine months ended September 28, 2025 was (0.06)% as compared to (0.40)% for the same period in the prior year.

Previous wording

Total assets decreased by approximately $1.7 million, primarily due to a $2.7 million reduction in cash and cash equivalents due to greater payments than borrowings on the Company's revolving line of credit and a $1.5 million reduction in accounts receivable due to the collection of outstanding receivables, a $0.4 million reduction in prepaid expenses and other current assets, and a $0.3 million reduction in the non-marketable equity investment due to its full impairment, partially offset by an increase of $1.0 million in contract assets due to the recognition of revenue subject to billing timing constraints and a $2.3 million net increase in equipment and internal-use software assets.

Current wording

Total assets decreased by approximately $5.8 million, primarily due to a $4.5 million reduction in cash and cash equivalents due to greater payments than borrowings on the Company's revolving line of credit and a $1.7 million reduction in accounts receivable and contract assets due to the collection of outstanding receivables, a $0.4 million reduction in prepaid expenses and other current assets, a $0.3 million reduction in the non-marketable equity investment due to its full impairment, and a $0.2 million in amortization expense of the Company's right-of-use assets, partially offset by a $1.3 million net increase in equipment and internal-use software assets.

Previous wording

Liabilities decreased by approximately $4.5 million due to greater payments than borrowings in the amount of $3.0 million on the Company's revolving line of credit, payments on notes payable of $1.0 million, payments on operating leases of $0.1 million, and reductions in accrued liabilities and deferred revenues of $0.6 million, partially offset by an increase of $0.3 million in trade payables.

Current wording

Liabilities decreased by approximately $5.7 million due to greater payments than borrowings in the amount of $3.0 million on the Company's revolving line of credit, payments on notes payable of $1.4 million, payments on operating leases of $0.2 million, reductions in accrued liabilities and deferred revenues of $0.7 million, and a $0.3 million decrease in trade payables.

Previous wording

Equity increased $2.8 million due to a $7.6 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 $4.9 million net loss for the six months ended June 29, 2025.

Current wording

Equity decreased $0.2 million due to a $8.9 million net loss for the nine months ended September 28, 2025, partially offset by $8.7 million increase in additional paid in capital arising from the sale of shares of common stock and recognition of stock-based compensation.

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 and cash equivalents from continuing operations of $19.2 million, as of June 29, 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 $5.6 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 $177 thousand.

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 $17.3 million, as of September 28, 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 $5.9 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 $183 thousand.

Previous wording

We were in compliance with all the Heritage Bank Revolving Facility loan covenants as of June 29, 2025. As of June 29, 2025, we had $15.0 million outstanding on the Revolving Facility with an interest rate of 8.00%. In the first quarter of 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, amended the Loan Agreement to, among other things, extend the loan maturity date for one year through December 31, 2026.

Current wording

As of September 28, 2025, the Company had $15.0 million outstanding on the Revolving Facility with an interest rate of 7.75%. In the first quarter of 2025, we entered into the Eighth Amendment (the "Eighth Amendment") to the Loan Agreement. The Eight Amendment, which became effective on March 17, 2025, amended the Loan Agreement to, among other things, extend the loan maturity date for one year through December 31, 2026.

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 June 29, 2025, the related note receivable balance was $1.36 million, including $192 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 September 28, 2025, the related note receivable balance was $1.39 million, including $225 thousand in accrued interest.

Previous wording

On February 25, 2025, the Company entered into an At Market Issuance Sales Agreement (the "Sales Agreement") with Needham & Company, LLC (the "Agent"), pursuant to which the Company may offer and sell, from time to time, through the Agent, as sales agent, shares of the Company's common stock, par value $0.001 per share, having an aggregate offering price of up to $20,000,000 (the "ATM Offering"). 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.

Current wording

On February 25, 2025, the Company entered into an At Market Issuance Sales Agreement (the "Sales Agreement") with Needham & Company, LLC (the "Agent"), which was subsequently amended and restated on August 14, 2025 (the "Sales Agreement"). Pursuant to the Sales Agreement, the Company may offer and sell, from time to time, through the Agent, as sales agent, shares of the Company's common stock, par value $0.001 per share, having an aggregate offering price of up to $20,000,000 (the "ATM Offering"). As of September 28, 2025, the Company sold 713 thousand shares under the ATM offering, resulting in net cash proceeds of approximately $4.4 million. Issuance costs related to the ATM Offering were $163 thousand.

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 $5.8 million gross cash proceeds from the March 6, 2025 financing and February 25, 2025 ATM Offering and sales thereby, 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 $6.1 million gross cash proceeds from the March 6, 2025 financing and ATM Offering and sales thereby, 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

As of June 29, 2025, most of our cash and cash equivalents were invested in a money market account at Heritage Bank. As of June 29, 2025, our interest-bearing debt consisted of$2.1 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.

Current wording

As of September 28, 2025, most of our cash and cash equivalents were invested in a money market account at Heritage Bank. As of September 28, 2025, our interest-bearing debt consisted of$1.8 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

For the six months ended June 29, 2025, net cash used in operating activities was $1.5 million, which was primarily due to the net loss of $4.9 million, adjusted for net non-cash charges of $4.9 million, which included $2.6 million in depreciation and amortization expenses, $1.7 million of stock-based compensation, $0.3 million in impairment charges related to the Company's investment in a non-affiliate, $0.1 million in inventory write-downs, and $0.1 million in ROU asset amortization expenses. Cash outflow from changes in operating assets and liabilities was approximately $1.6 million and was primarily due to decreases in accounts payable, accrued liabilities, deferred revenues, and lease liabilities and increases in contract assets, inventories, and other assets, partially offset by a decrease in accounts receivable.

Current wording

For the nine months ended September 28, 2025, net cash used in operating activities was $1.4 million, which was primarily due to the net loss of $8.9 million, adjusted for net non-cash charges of $7.2 million, which included $3.9 million in depreciation and amortization expenses, $2.6 million of stock-based compensation, $0.3 million in impairment charges related to the Company's investment in a non-affiliate, $0.2 million in ROU asset amortization expenses, and $0.1 million in inventory write-downs. Cash inflow from changes in operating assets and liabilities was approximately $0.3 million and was primarily due to decreases in accounts receivable and contract assets, partially offset by decreases in accrued liabilities, accounts payable, lease liabilities, and deferred revenues.