QUICKLOGIC Corp

Note1 — The Company and Basis of Presentation

QuickLogic Corporation ("QuickLogic" or the "Company") was founded in1988 and completed its reincorporation in Delaware in1999. The Company is a fabless semiconductor company specializing in embedded Field Programmable Gate Array ("eFPGA") hard intellectual property ("IP"), Strategic Radiation Hardened and Antifuse FPGAs, and ruggedized programmable logic solutions.

The Company licenses its eFPGA IP to semiconductor companies for integration into application-specific integrated circuits ("ASICs") and system-on-chips ("SoCs") devices and develops and sells programmable logic semiconductor devices, including discrete eFPGAs. These technologies enable customers to incorporate configurable hardware functionality into custom semiconductor devices and electronic systems.

The Company's programmable logic technologies are used in a variety of markets, including aerospace and defense systems, industrial and infrastructure systems, computing platforms, and semiconductor devices developed by fabless semiconductor companies. The Company's products, software tools, and IP enable customers to efficiently implement programmable hardware functionality within custom semiconductor devices and electronic systems.

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. At the balance sheet date of* December 28, 2025,the Company impaired all SensiML non-cash assets to azero* value and redesignated SensiML as a disposal asset within Discontinued Operations in accordance with ASC205-20 and ASC360-10. The Company has incurred $0.2 million in costs in connection with the SensiML disposal to date. These costs consisted primarily ofone-time termination benefits and related marketing and selling efforts. See Note3 for additional information of discontinued operations. All other notes to these unaudited condensed consolidated financial statements present the results of continuing operations and exclude amounts related to discontinued operations for all periods presented, unless otherwise stated.

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 28, 2025*, which was filed with the Securities and Exchange Commission (“SEC”) on* March 27, 2026*. Operating results for thethree andsix months ended* June 28, 2026* 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 for2026 and2025 ended on* June 28, 2026* and* June 29, 2025*, respectively.

Liquidity

The Company has financed its operations and capital investments through the sale of common stock, financing arrangements, operating leases, and cash flows from operations. As of* June 28, 2026*, the Company's principal sources of liquidity consisted of cash and cash equivalents from continuing operations of $18.5 million, inclusive of a $5.0 million advance from its Revolving Credit Facility and $9.5 million in net proceeds from the Company's sale of common stock in thesix months ended* June 28, 2026*.

In thesecond quarter of2026, the Company entered into (i) a Loan and Security Agreement (the "Credit Agreement"), by and between Sunflower Bank, N.A. ("Sunflower Bank") and (ii) a Promissory Note of the Company (the "Note"), providing for a $10.0 million secured revolving credit facility ("Revolving Credit Facility"). The Revolving Credit Facility matures on* April 24, 2029and accrues interest at a rate equal to the greater of (i)5.50% and (ii) Prime Rate plus 0.50%. In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, the Company is required to pay an annual facility fee of $30 thousand. Subsequently, the Company terminated its revolving line of credit with Heritage Bank of Commerce in May 2026.*See Note 8 for additional information.

The Company was in compliance with the Revolving Credit Facility loan covenants as of* June 28, 2026*. As of* June 28, 2026*, the Company had $5.0 million outstanding on the Revolving Credit Facility with an interest rate of 7.25%.

On* February 25, 2025,the Company entered into an At Market Issuance Sales Agreement with Needham & Company, LLC, as sales agent (the "Agent"). On August 14, 2025,the Company amended and restated its At Market Issuance Sales Agreement with the Agent (the "Sales Agreement") in connection with filing a New Registration statement (as defined below). Pursuant to the Sales Agreement, the Company may*offer and sell, from time to time, through the Agent, shares of the Company's common stock, par value of $0.001 per share, having an aggregate offering price of up to $20,000,000.

On* August 14, 2025,the Company filed a new Registration Statement on Form S-3 (FileNo* 333-289610) ("New Registration Statement") with the SEC to replace the Company's expiring Registration Statement on Form S-3, under which the Company* 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 in an aggregate amount of up to $125,000,000. The Company's registration statement became effective* August 22, 2025.*

In connection with the New Registration Statement, the Company filed a sales prospectus whereby it amended, restated, and renewed its ATM program, allowing the Company to sell an aggregate offering price of up to $20,000,000 (the "Amended ATM Offering"). The $20,000,000 shares of the Company's common stock that* maybe sold under the Amended ATM Offering are included in the $125,000,000 of the Company's securities that may*be sold under the New Registration Statement.

During thesix months ended* June 28, 2026*, the Company sold 903 thousand shares under the Amended ATM Offering, resulting in net cash proceeds of approximately $9.5 million. Issuance costs related to the Amended ATM Offering were $297 thousand. In thesix months ended* June 29, 2025*, the Company sold 678 thousand shares under the prior ATM offering, resulting in net cash proceeds of approximately $4.1 million. Issuance costs related to the prior ATM offering were $157 thousand. See Note10 for additional information.

On* March 6, 2025*, the Company entered into Common Stock Purchase Agreements with certain institutional investors and their affiliated entities for the sale of an aggregate of 256 thousand shares of common stock, 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.

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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 the $9.5 million in net cash proceeds from its Amended ATM Offering, its revenues from operations, and available financial resources from its Revolving Credit Facility 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, 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 Credit Facility, 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 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 27, 2026*.

Concentration of Risk

The Company's accounts 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.

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In connection with its Revolving Credit Facility as of* June 28, 2026*, the Company maintains a substantial amount of cash deposits with Sunflower 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 Sunflower 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 Sunflower 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 28, 2026*, 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 28, 2025*. For a discussion of the significant accounting policies, please see the Annual Report on Form10-K for the fiscal year ended* December 28, 2025*, filed with the SEC on* March 27, 2026*.

Certain prior period amounts in the unaudited 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 unaudited condensed consolidated financial statements have been modified to conform with current period presentation.

In thesix 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 thesix* months ended* June 29, 2025.*

For its trades receivable, the Company provides an allowance for credit losses based on historical experience and a specific identification basis. As of* June 28, 2026* and* December 28, 2025*, the allowance for credit losses was $0.1 million and $0, respectively. The Company recognized $0.1 million in credit loss expense for thethree andsix months ended* June 28, 2026*. The Company didnot record any credit loss expense for thethree andsix months ended* June 29, 2025*.

During thethree andsix months ended* June 28, 2026*, the Company recognized $0.1 million in matching contribution expenses as a part of the employer match program for its401(k) post-retirement benefit plan. During thethree andsix months ended* June 29, 2025*, the Company recognized $0.05 million and $0.1 million, respectively, in matching contribution expenses.

Recent Accounting StandardsNot Yet Adopted**

In* December 2025,the FASB issued ASU2025*-12, Codification Improvements to make improvements to the Codification arising from technical corrections, unintended application of the Codification, and clarifications. For all entities, the amendments in this Update are effective for annual reporting periods beginning after* December 15, 2026,including interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. The adoption of ASU2025*-12 isnot expected to have a significant impact on the Company's consolidated financial statements.

In* December 2025,the FASB issued ASU2025*-11, Interim Reporting (Topic270*): Narrow Scope Improvements* to improve the navigability of the interim reporting guidance in ASC270 and clarify when it applies. For public business entities, the amendments in this Update are effective for interim reporting periods within annual reporting periods beginning after* December 15, 2027.Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. The adoption of ASU2025*-11 isnot expected to have a significant impact on the Company's consolidated financial statements.

In* September 2025,the FASB issued ASU2025*-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic350*-40)to modernize the accounting for software costs that are accounted for underSubtopic350-40, Intangibles - Goodwill and Other - Internal-Use Software*. For all entities, the amendments in this Update are effective for annual reporting periods beginning after* December 15, 2027and interim periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. The adoption of ASU2025*-06 isnot expected to have a significant impact on the Company's consolidated financial statements.* *

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.

Preliminary discussions commenced with potential strategic partners regarding the possible sale of SensiML or its assets. As of* January 7, 2025,the Company began accounting for the SensiML subsidiary in accordance with ASC205*-20, Discontinued Operations and accordingly, depreciation and amortization of assets held by SensiML was discontinued.

During Fiscal Year2025, the Company continued to evaluate strategic alternatives for SensiML, including a potential sale of the business or its underlying assets. As of* December 28, 2025,the Company determined that the anticipated sale of SensiML hadnot* occurred within the originally expected time frame and management reassessed the expected timing of a potential disposition. As run-off operations at the SensiML subsidiary concluded in Fiscal Year2025, the Company determined that a classification of asset group held for disposal for the SensiML subsidiary, in accordance with ASC360-10, was appropriate. Additionally, its results of operations are presented as discontinued operations in the unaudited condensed consolidated financial statements. The Company continues to provide for the costs of maintaining SensiML assets until disposal via capital contributions.

As of* June 28, 2026*, there havenot been any new material developments regarding the disposal of SensiML.

The following table provides details relating to major classes of assets and liabilities for discontinued operations classified as held for disposal as of* June 28, 2026*, and* December 28, 2025* (in thousands):

The following table provides details relating to major line items constituting income (loss) for discontinued operations classified as held for disposal for thethree andsix months ended* June 28, 2026and June 29, 2025* (in thousands):

For thethree andsix months ended* June 28, 2026*, the Company has incurred $16 thousand and $27 thousand, respectively, in costs in connection with the disposal of SensiML. For thethree andsix months ended* June 29, 2025*, the Company has incurred $21 thousand and $162 thousand, respectively. These costs are primarily comprised ofone-time termination benefits and related marketing and selling efforts and are split between the 'Restructuring Costs' line item in the Company's unaudited condensed consolidated statement of operations and in the table above. The Company doesnot expect total costs to be incurred in connection with the disposal of SensiML to differ materially from those already recognized.

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

Revenue streams from SensiML included Software as a Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services.

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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:

The following table provides the expenses from discontinued operations related to operating leases for thethree andsix months ended* June 28, 2026and June 29, 2025* (in thousands):

Stock-based compensation expense from discontinued operations for thethree andsix months ended* June 28, 2026and June 29, 2025* 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 for thethree andsix months ended* June 28, 2026* and $0 and ( $32 thousand) for thethree andsix months ended* June 29, 2025*, respectively.

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

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 28, 2026and June 29, 2025*,800 thousand and 643 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 the periods presented.

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Note5 — Balance Sheet Components

The following table provides details relating to certain balance sheet line items as of* June 28, 2026*, and* December 28, 2025* (in thousands):

The majority of the Company's deferred charges balances as of* June 28, 2026* and* December 28, 2025* relate primarily to the Company's software tools and related subscriptions. The Company amortizes its deferred charges over their estimated useful lives using the straight-line method.

As of* June 28, 2026* and* December 28, 2025*, work-in-process inventories, net consist primarily of approximately $0.1 million of die wafers and approximately $0.8 million of tested, unmarked devices held for sale, which are completed upon customer orders, and open work orders.

The Company capitalized $0.6 million and $0.8 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 28, 2026*, respectively. $1.8 million and $4.1 million in pre-production design and development costs were capitalized as tooling to be utilized under its long-term professional services contracts for thethree andsix months ended* June 29, 2025*, respectively.

The Company recorded depreciation and amortization expense of $1.6 million and $3.1 million for thethree andsix months ended* June 28, 2026*, respectively, and $1.3 million and $2.6 million for thethree andsix months ended* June 29, 2025*, respectively. No interest was capitalized for any period presented.

Depreciation and amortization expense included approximately $67 thousand and $126 thousand of amortization expense related to capitalized internal-use software for thethree andsix months ended* June 28, 2026*, respectively and $39 thousand and $70 thousand for thethree andsix months ended* June 29, 2025*, 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

The following table provides the details of the carrying value of intangible assets capitalized related to the Company's successful defense of its patents in a lawsuit as of* June 28, 2026* (in thousands):** **

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

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 28, 2026* (in thousands):

Note8 — Debt Obligations

Revolving Line of Credit

In thesecond quarter of2026, the Company entered into (i) a Loan and Security Agreement (the "Credit Agreement"), by and between Sunflower Bank, N.A. ("Sunflower Bank") and (ii) a Promissory Note of the Company (the "Note"), providing for a $10.0 million secured revolving credit facility ("Revolving Credit Facility"). The Revolving Credit Facility matures on* April 24, 2029*and accrues interest at a rate equal to the greater of (i)5.50% and (ii) Prime Rate plus 0.50%. In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, the Company is required to pay an annual facility fee of $30 thousand.

Financial covenants of the Revolving Credit Facility require the Company to (i) maintain its Primary Operating Account and all other U.S.-based bank accounts with Sunflower Bank, (ii) maintain at all times a balance of unrestricted cash in the Pledged Accountnot less than the principal amount of all cash advances under the Revolving Credit Facility, and (iii) maintain at all times, but subject to periodic reporting as of the last day of each quarter,not less thanseven months of Remaining Months Liquidity ("RML"). For the purposes of the Revolving Credit Facility, RML means (i) unrestricted cash maintained at Lender (including cash in the Company's Pledged Account) minus the outstanding principal amount of the cash advances under the Revolving Credit Facility, divided by (ii) average trailingthree (3) month EBITDA using thethree months ending as of the most recent calendar quarter-end. The Company was in compliance with the Revolving Credit Facility loan covenants as of* June 28, 2026*.

As of * June 28, 2026*, the Company had $5.0 million of revolving debt outstanding with Sunflower Bank, with an interest rate of 7.25% per annum. Related interest expenses and annual facility fees recognized were $8 thousand and $8 thousand for thethree andsix months ended* June 28, 2026*, respectively.

As of* December 28, 2025*, the Company had $15.0 million of revolving debt outstanding with Heritage Bank, with an interest rate of 7.25% per annum. Related interest expenses and annual facility fees recognized were $45 thousand and $63 thousand for thethree andsix months ended* June 28, 2026*, respectively. Related interest expenses and annual facility fees recognized were $71 thousand and $121 thousand for thethree andsix months ended* June 29, 2025*, respectively.

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The Company terminated its revolving line of credit with Heritage Bank of Commerce in* May 2026.*

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 28, 2026*, and* December 28, 2025* (in thousands):

The following table provides detail on payments related to financing arrangements for thethree andsix months ended* June 28, 2026and June 29, 2025* (in thousands):

The following table provides the details of future payments for assets purchased through financing arrangements as of* June 28, 2026* (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 related to operating leases (in thousands):

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 28, 2026and June 29, 2025* were $157 thousand and $144 thousand, respectively.

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The following table provides the details of right-of-use assets and lease liabilities as of* June 28, 2026* and* December 28, 2025* (in thousands):

The following table provides the details of future lease payments for operating leases as of* June 28, 2026* (in thousands):

The following table provides the details of lease terms and discount rates as of* June 28, 2026* and* December 28, 2025*:

(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* February 25, 2025,the Company entered into an At Market Issuance Sales Agreement with Needham & Company, LLC, as sales agent (the "Agent"). On August 14, 2025,the Company amended and restated its At Market Issuance Sales Agreement with the Agent (the "Sales Agreement") in connection with filing a New Registration Statement (as defined below). Pursuant to the Sales Agreement, the Company may*offer and sell, from time to time, through the Agent, shares of the Company's common stock, par value of $0.001 per share, having an aggregate offering price of up to $20,000,000.

On* August 14, 2025,the Company filed a new Registration Statement on Form S-3 (FileNo* 333-289610) ("New Registration Statement") with the SEC to replace the Company's expiring Registration Statement on Form S-3, under which the Company* 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 in an aggregate amount of up to $125,000,000. The Company's registration statement became effective* August 22, 2025.*

In connection with the New Registration Statement, the Company filed a sales prospectus whereby it amended, restated, and renewed its ATM program, allowing the Company to sell an aggregate offering price of up to $20,000,000 (the "Amended ATM Offering"). The $20,000,000 of shares of the Company's common stock that* maybe sold under the Amended ATM Offering is included in the $125,000,000 of its securities that may*be sold under the New Registration Statement.

During thesix months ended* June 28, 2026*, the Company sold 903 thousand shares under the Amended ATM Offering, resulting in net cash proceeds of approximately $9.5 million. Issuance costs related to the Amended ATM Offering were $203 thousand and $297 thousand, respectively, for thethree andsix months ended* June 28, 2026*. In thesix months ended* June 29, 2025*, the Company sold 678 thousand shares under the prior ATM offering, resulting in net cash proceeds of approximately $4.1 million. Issuance costs related to the prior ATM offering were $68 thousand and $157 thousand, respectively, for thethree andsix months ended* June 29, 2025*.

Issuance costs for the Company's prior ATM offering and Amended ATM Offering are recorded on a pro-rata basis reflective of the percentage of shares sold to total shares available for sale under the prior ATM offering and Amended ATM Offering, respectively. The Company intends to use the net proceeds from the Amended 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, or to fund possible investments in and acquisitions of complementary businesses, partnerships, or minority investments.

Of the $0.3 million in stock issuance costs recognized on the Company's unaudited condensed consolidated statements of stockholders' equity for thesix months ended* June 28, 2026*, approximately $41 thousand were prepaid in Fiscal Year2025 and amortized in Fiscal Year2026. Of the $0.2 million in stock issuance costs recognized on the Company's unaudited condensed consolidated statements of stockholders' equity for thesix months ended* June 29, 2025*, approximately $49 thousand were prepaid in Fiscal Year2024 and amortized in Fiscal Year2025. Furthermore, $20 thousand of the Company's stock issuance costs amortized in thesix months ended* June 29, 2025were unpaid as of June 29, 2025.*

On* March 6, 2025*, the Company entered into Common Stock Purchase Agreements with certain institutional investors and their affiliated entities for the sale of an aggregate of 256 thousand shares of common stock, 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.

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Note11 — Stock-Based Compensation

Stock-based compensation expense included in the Company's unaudited condensed consolidated financial statements for thethree andsix months ended* June 28, 2026and June 29, 2025* was as follows (in thousands):

The Company capitalized certain stock-based compensation amounts to capitalized internal-use software, net of $18 thousand and $32 thousand for thethree andsix months ended* June 28, 2026*, respectively, and $9 thousand and $28 thousand for thethree andsix months ended* June 29, 2025*, respectively. The capitalized stock-based compensation amounts relate to compensation for employees involved in the development of capitalized internal-use software.

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 28, 2026* (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 28, 2026*:

Stock options in the amount of 42 thousand shares were exercised during thesix months ended* June 28, 2026*. No stock options were granted or forfeited during thesix months ended* June 28, 2026*. No stock options were granted, exercised, or forfeited during thesix months ended* June 29, 2025*.

Total stock-based compensation related to stock options was $0 during thesix months ended* June 28, 2026and June 29, 2025*.

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 related to RSUs and PRSUs wasapproximately $0.7 million and $1.5 million for thethree andsix months ended* June 28, 2026*, respectively, and $0.8 million and $1.7 million for thethree andsix months ended* June 29, 2025*, respectively.

As of* June 28, 2026and June 29, 2025*, there was approximately$2.1 million and $1.9 million, respectively, in unrecognized stock-based compensation expense related to RSUs. The remaining unrecognized stock-based compensation expense as of* June 28, 2026* is expected to be recorded over a weighted average period of 0.99 years.

A summary of activity for the Company's RSUs and PRSUs for thesix months ended* June 28, 2026* is as follows:

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Employee Stock Purchase Plan

Total stock-based compensation in continuing operations related to the Company's Employee Stock Purchase Planwas approximately $48 thousand and $95 thousand for thethree andsix months ended* June 28, 2026*, respectively, and $20 thousand and $60 thousand for thethree andsix months ended* June 29, 2025*, respectively.

Note12 — Income Taxes

The Company notes that Note12 - Income Taxes, is presented at the consolidated level, inclusive of continuing and discontinued operations, due to income taxes related to discontinued operations being immaterial in nature for the periods presented.

The Company recorded a net income tax expense (benefit) on the unaudited condensed consolidated statement of operations of $3 thousand and $0 thousand for thethree andsix months ended* June 28, 2026*, respectively, and $1 thousand and $6 thousand for thethree andsix months ended* June 29, 2025*, respectively. The difference between the estimated annual effective tax rate for fiscal year2026 of (0.37%) from 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 28, 2026*. 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 28, 2026*.

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 by product family (in thousands):

New products revenue consists of revenues from the sale of hardware products manufactured on180 nanometer or smaller semiconductor processes and of eFPGA IP licenses, as well as eFPGA-related professional services. Mature products include all products produced on semiconductor processes larger than180 nanometer. Associated royalty revenues are included within their respective device's classification.

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

eFPGA IP and professional services revenuewas$4.4 million and $8.6 million for thethree andsix months ended* June 28, 2026*, respectively, and $2.6 million and $6.2 million for thethree andsix months ended* June 29, 2025*, respectively, which was primarily professional services revenue.

Contract assets were $23 thousand and $0.2 million as of* June 28, 2026* and* December 28, 2025*, respectively. Contract liabilities were $0.4 million and $0.1 million as of* June 28, 2026* and* December 28, 2025*, respectively. In thesix months ended* June 28, 2026*, $48 thousand of the deferred revenues outstanding as of* December 28, 2025* were recognized by the Company as revenue. Of the $0.4 million in deferred revenues as of* June 28, 2026*, the Company expects to recognize these revenues using the input time-based method through the end ofQ1'27. Of its remaining unsatisfied performance obligationsnot currently on the Company's balance sheet, the Company expects to recognize $6.3 million by the end ofQ1'27 through the input time-based method. 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 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 in the United States was $4.8 million, or 88% of total revenue and $9.3 million, or 88% of total revenue for thethree andsix months ended* June 28, 2026*, respectively, and $2.9 million, or 80% of total revenue and $6.8 million, or 85% of total revenue for thethree andsix months ended* June 29, 2025*, respectively.

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

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

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

Note14 — Commitments and Contingencies

Commitments

The Company's principal contractual commitments include purchase obligations, re-payments of drawdowns 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 28, 2026*, the Company had $118 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. The Company had $1.5 million of recorded and unrecorded purchase obligations due within the nexttwelve months as of* June 28, 2026*.

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.