MRAM 10-K & 10-Q changes, risk factors and insider trading
Everspin Technologies Inc. · Nasdaq · Semiconductors & Related Devices · CIK 1438423 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition, or results of operations.”
New heading “International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.”
New heading “We are subject to U.S. and certain foreign anti-corruption laws and regulations. We could face liability and other serious consequences for violations which can harm our business.”
Largest changes
“There is no certainty that all of our employees, agents, suppliers, manufacturers, contractors or collaborators, or those of our affiliates, will comply with all applicable anti-corruption laws and regulations. Any violation of such laws and regulations may result in substantial civil and criminal fines and penalties against us, our officers, or our employees, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences. …”see in full comparison
“International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.”see in full comparison
“We make planning and spending decisions, including determining production levels, production schedules, component procurement commitments, personnel needs, and other resource requirements, based on our estimates of product demand and customer requirements. Our products are typically purchased pursuant to individual purchase orders. While our customers may provide us with their demand forecasts, they are not contractually committed to buy any quantity of products beyond purchase orders. …”see in full comparison
“We make planning and spending decisions, including determining production levels, production schedules, component procurement commitments, personnel needs, and other resource requirements, based on our estimates of product demand and customer requirements. Our products are typically purchased pursuant to individual purchase orders. While our customers may provide us with their demand forecasts, they are not contractually committed to buy any quantity of products beyond purchase orders. …”see in full comparison
“Trade disputes, trade restrictions, tariffs and other geopolitical tensions between the U.S. and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns, which may also negatively impact customer demand for our products or services, delay purchases or renewals, limit expansion opportunities with customers, limit our access to capital, or otherwise negatively impact our business and operations. …”see in full comparison
“Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition, or results of operations.”see in full comparison
Full comparison: every changed paragraph (96)
We make planning and spending decisions, including determining production levels, production schedules, component procurement commitments, personnel needs, and other resource requirements, based on our estimates of product demand and customer requirements. Our products are typically purchased pursuant to individual purchase orders. While our customers may provide us with their demand forecasts, they are not contractually committed to buy any quantity of products beyond purchase orders. Furthermore, many of our customers may increase, decrease, cancel, or delay purchase orders already in place without significant penalties. The short-term nature of commitments by our customers and the possibility of unexpected changes in demand for their products reduce our ability to accurately estimate future customer requirements. On occasion, customers may require rapid increases in production, which can strain our resources, necessitate more onerous procurement commitments, and reduce our gross margin. If we overestimate customer demand, we may purchase products that we may not be able to sell, which could result in decreases in our prices or write-downs of unsold inventory. Conversely, we could lose sales opportunities and could lose market share or damage our customer relationships if, for example, we underestimate customer demand, are affected by supply chain constraints, or sufficient manufacturing is unavailable. We manufacture MRAM products at our leased 200mm facility in Chandler, Arizona and use a single foundry, GLOBALFOUNDRIES, for production of higher density products on advanced technology nodes, which may not have sufficient capacity to meet customer demand. The rapid pace of innovation in our industry could also render significant portions of our inventory obsolete. Excess or obsolete inventory levels could result in unexpected expenses or write-downs of inventory values that could adversely affect our business, operating results, and financial condition.
We expect that our new and future MRAM products will be applicable to markets in which we are not currently operating. The markets in which we operate and may operate in the future are extremely competitive and are characterized by rapid technological change, continuous evolving customer requirements and declining average selling prices. We may not be able to compete successfully against current or potential competitors, which include our current and potential customers as they seek to internally develop solutions competitive with ours or as we develop products potentially competitive with their existing products. If we do not compete successfully, our market share and revenue may decline. We compete with large semiconductor manufacturers and designers and others, and some of our current and potential competitors have longer operating histories, significantly greater resources and name recognition and a larger base of customers than we do. This may allow them to respond more quickly than we can to new or emerging technologies or changes in customer requirements. In addition, these competitors may have greater credibility with our existing and potential customers. Some of our current and potential customers with their own internally developed solutions may choose not to purchase products from third-party suppliers like us.
•our interests could diverge from those of our foundries, or we may not be able to agree with them on ongoing development, manufacturing and operational activities, or on the amount, timing, or nature of further investments in our joint development;
•capacity and materials shortages during periods of high demand or supply constraints;
•reduced control over delivery schedules, inventories and quality;
•the unavailability of, or potential delays in obtaining access to, key process technologies;
•the inability to achieve required production or test capacity and acceptable yields on a timely basis;
•misappropriation of our intellectual property;
•the third party’s ability to perform its obligations due to bankruptcy or other financial constraints;
•exclusive representatives for certain customer engagements;
•limited warranties on wafers or products supplied to us; and
•potential increases in prices including due to tariffs and/or inflation.
Our manufacturing agreement with GLOBALFOUNDRIES includes a forecast and ordering mechanism for the supply of certain of our wafers, and we are obligated to order and pay for, and GLOBALFOUNDRIES is obligated to supply, wafers consistent with the binding portion of our forecast. Our manufacturing arrangement is also subject to both a minimum and maximum order quantity, which we believe currently addresses our projected foundry capacity needs, but may not address our maximum foundry capacity requirements in the future. We may also be obligated to pay for unused capacity if our demand decreases in the future, or if our estimates prove inaccurate. We do not currently source these wafers from anyone other than GLOBALFOUNDRIES, which has the ability to discontinue its manufacture of any of our wafers upon due notice and completion of the notice period. This would cause us to have to find another foundry to manufacture those wafers or redesign our core technology and would mean that we may not have products to sell until such time. Any time spent engaging a new manufacturer or redesigning our core technology could be costly and time consumingtime-consuming and allow potential competitors to take opportunities in the marketplace. Moreover, if we are unable to find another foundry to manufacture our products or if we have to redesign our core technology, this could cause material harm to our business and operating results.
If any of our current or future foundries or packaging, assembly and testing subcontractors significantly increases the costs of wafers or other materials or services, interrupts or reduces our supply, including for reasons outside of their control, such as due to health-related events or outbreaks, or if any of our relationships with our suppliers is terminated, our operating results could be adversely affected. Such occurrences could also damage our customer relationships, result in lost revenue, cause a loss in market share, or damage our reputation.
We make planning and spending decisions, including determining production levels, production schedules, component procurement commitments, personnel needs, and other resource requirements, based on our estimates of product demand and customer requirements. Our products are typically purchased pursuant to individual purchase orders. While our customers may provide us with their demand forecasts, they are not contractually committed to buy any quantity of products beyond purchase orders. Furthermore, many of our customers may increase, decrease, cancel, or delay purchase orders already in place without significant penalties. The short-term nature of commitments by our customers and the possibility of unexpected changes in demand for their products reduce our ability to accurately estimate future customer requirements. On occasion, customers may require rapid increases in production, which can strain our resources, necessitate more onerous procurement commitments, and reduce our gross margin. If we overestimate customer demand, we may purchase products that we may not be able to sell, which could result in decreases in our prices or write-downs of unsold inventory. Conversely, we could lose sales opportunities and market share or damage our customer relationships if, for example, we underestimate customer demand, we are affected by supply chain constraints, or sufficient manufacturing is unavailable. We manufacture MRAM products at our leased 200mm facility in Chandler, Arizona and use a single foundry, GLOBALFOUNDRIES, for production of higher density products on advanced technology nodes, which may not have sufficient capacity to meet customer demand. The rapid pace of innovation in our industry could also render significant portions of our inventory obsolete. Excess or obsolete inventory levels could result in unexpected expenses or write-downs of inventory values that could adversely affect our business, operating results, and financial condition.
We expect that our new and future MRAM products will be applicable to markets in which we are not currently operating. The markets in which we operate and may operate in the future are extremely competitive and are characterized by rapid technological change, continuously evolving customer requirements and declining average selling prices. We may not be able to compete successfully against current or potential competitors, which include our current and potential customers as they seek to internally develop solutions competitive with ours or as we develop products potentially competitive with their existing products. If we do not compete successfully, our market share and revenue may decline. We compete with large semiconductor manufacturers and designers and others, and some of our current and potential competitors have longer operating histories, significantly greater resources and name recognition and a larger base of customers than we do. This may allow them to respond more quickly than we can to new or emerging technologies or changes in customer requirements. In addition, these competitors may have greater credibility with our existing and potential customers. Some of our current and potential customers with their own internally developed solutions may choose not to purchase products from third-party suppliers like us.
•our interests could diverge from those of our foundries, or we may not be able to agree with them on ongoing development, manufacturing and operational activities, or on the amount, timing, or nature of further investments in our joint development;
•we may experience difficulties in transferring technology to a foundry;
•we may experience difficulties and delays in getting to and/or ramping production at foundries;
•we do not have control over the operations of foundries;
•our joint development collaborators may be unable to meet their commitments to us;
•due to differing business models or long-term business goals, our collaborators may decide not to join us in funding capital investment, which may result in higher levels of cash expenditures by us;
•our cash flows may be inadequate to fund increased capital requirements;
•we may experience difficulties or delays in collecting amounts due to us from our collaborators;
•the terms of our arrangements may turn out to be unfavorable;
•we are migrating toward a fabless model as 300mm production becomes required and this increases risks related to less control over our critical production processes; and
•changes in tax, legal, or regulatory requirements may necessitate changes in our agreements.
Generally, in pricing our products, we assume that manufacturing yields will continue to improve, even as the complexity of our products increases. Once our products are initially qualified either internally or with our third-party foundries, minimum acceptable yields are established. We are responsible for the costs of the units if the actual yield is above the minimum set with our third-party foundries. If actual yields are below the minimum, we are not required to purchase the units. Typically, minimumMinimum acceptable yields for our new products are generally lower at first and gradually improve as we achieve full productionproduction, but yield issues can occur even in mature processes due to breakdowns in mechanical systems, equipment failures or calibration errors. Unacceptably low product yields or other product manufacturing problems could substantially increase overall production time and costs and adversely impact our operating results. Product yield losses may also increase our costs and reduce our gross margin. In addition to significantly harming our results of operations and cash flow, poor yields may delay shipment of our products and harm our relationships with existing and potential customers.
Products as complex as ours may contain defects, particularly when first introduced to customers or as new versions are released. Delivery of products with production defects or reliability, quality or compatibility problems could significantly delay or hinder market acceptance of the products or result in a costly recall and could damage our reputation and adversely affect our ability to retain existing customers and attract new customers. Defects could cause problems with the functionality of our products, resulting in interruptions, delays, or cessation of sales of these products to our customers. We may also be required to make significant expenditures of capital and resourcesresource expenditures to resolve such problems. For example, any such problems could result in:
•delays in development, manufacture and roll-out of new products;
•additional development costs;
•loss of, or delays in, market acceptance;
•diversion of technical and other resources from our other development efforts;
•claims for damages by our customers or others against us; and
•loss of credibility with our current and prospective customers.
•Any such event could have a material adverse effect on our business, financial condition, and results of operations.
We may face difficulties, delays, and increased expenseexpenses as we transition our products to new processes, and potentially to new foundries. We will depend on our third-party foundries as we transition to new processes. Our third-party foundries may not be able to effectively manage such transitions and/or we may not be able to maintain our relationship with our third-party foundries or develop relationships with new third-party foundries. If we or any of our third-party foundries experience significant delays in transitioning to new processes or fail to efficiently implement transitions, we could experience reduced manufacturing yields, delays in product deliveries and increased expenses, any of which could harm our relationships with our customers and our operating results.
Our ability to compete will depend on our ability to identify and comply with evolving industry standards and technical requirements. The emergence of new industry standards and technical requirements could render our products incompatible with products developed by other suppliers or make it difficult for our products to meet the requirements of certain of our customers in automotive, transportation, industrial, data storage, and other markets. As a result, we could be required to invest significant time and effort and incur significant expenseexpenses to redesign our products to ensure compliance with relevant standards and requirements. If our products are not in compliance with prevailing industry standards and technical requirements for a significant period of time, we could miss opportunities to achieve crucial design wins, our revenue may decline and we may incur significant expenses to redesign our products to meet the relevant standards, which could adversely affect our business.
•public health-related events or outbreaks, which can result in varying impacts to our business, employees, partners, customers, distributors or suppliers internationally as discussed elsewhere in this “Risk Factors” section;
•difficulties, inefficiencies and costs associated with staffing and managing foreign operations;
•longer and more difficult customer qualification and credit checks;
•greater difficulty collecting accounts receivable and longer payment cycles;
•the need for various local approvals to operate in some countries;
•difficulties in entering some foreign markets without larger-scale local operations;
•changes in import/export laws, trade restrictions, regulations and customs and duties and tariffs (foreign and domestic);
•compliance with local laws and regulations;
•unexpected changes in regulatory requirements, including the elimination of tax holidays;
•reduced protection for intellectual property rights in some countries;
•adverse tax consequences as a result of repatriating cash generated from foreign operations to the United States;
•adverse tax consequences, including potential additional tax exposure if we are deemed to have established a permanent establishment outside of the United States;
•the effectiveness of our policies and procedures designed to ensure compliance with the Foreign Corrupt Practices Act of 1977 (FCPA) and similar regulations;
•fluctuations in currency exchange rates, which could increase the prices of our products to customers outside of the United States, increase the expenses of our international operations by reducing the purchasing power of the U.S. dollar and expose us to foreign currency exchange rate risk if, in the future, we denominate our international sales in currencies other than the U.S. dollar;
•new and different sources of competition;
•political, economic, and social instability;
•terrorism and acts of war, such as the military conflict between Russia and Ukraine, which could have a negative impact on the operations of our business or our customers’ businesses; and
•US Department of Commerce regulations or restrictions on exports of certain semiconductor technologies and equipment to China.
The semiconductor memory industry is characterized by companies that hold patents and other intellectual property rights and that vigorously pursue, protect, and enforce intellectual property rights. These companies include patent holdingpatent-holding companies or other adverse patent owners who have no relevant product revenue and against whom our own patents may provide little or no deterrence. From time to time, third parties may assert patent and other intellectual property rights claims against us and our customers. We have in the past, and may in the future, face such claims. On January 28, 2026, we received notice that Avalanche Technology, Inc. filed a lawsuit against us in the United States District Court for the District Court of Delaware and a patent infringement complaint with the U.S. International Trade Commission. We believe we have valid arguments against the underlying claims, which could be time-consuming and costly to defend and involve significant uncertainty.
•cease the manufacture, use or sale of the infringing products, processes or technology;
•pay substantial damages for infringement;
•expend significant resources to develop non-infringing products, processes or technology, which may not be successful;
Management's Discussion & Analysis (MD&A)
Removed heading “Effect of Health-Related Outbreaks on Our Business”
Largest changes
We monitor a variety of key financial metrics to help us evaluate trends, establish budgets, measure the effectiveness of our business strategies, and assess operational efficiencies. These financial metrics include revenue, gross margin, operatingsee in full comparisonexpenses,expenses and operating income determined in accordance with generally accepted accounting principles in the United States (GAAP). Additionally, we monitor and project cash flow to determine our sources and uses for working capital to fund our operations. We also monitor AdjustedEBITDA,net income, a non-GAAP financial measure, and design wins. We define AdjustedEBITDAnet income as net incomeor lossadjusted forinterest expense, taxes, depreciation and amortization,stock-based compensationexpense, and restructuring costs, if any.expense.
Sales and Marketing Expenses. Sales and marketing expenses increased bysee in full comparison$0.1$0.7 million, or1.9%,13.4%, from$5.3 million during the year ended December 31, 2023, to$5.4 million during the year ended December 31,2024.2024, to $6.1 million during the year ended December 31, 2025. Thechangeincreasewasis sales and marketing expenses relates primarilyduetoanhigherincreasecompensationin headcountcosts and contractlabor, partially offset by lower variable compensation costs.labor.
“During the year ended December 31, 2023, cash provided by operating activities was $13.1 million, which consisted of net income of $9.1 million, non-cash charges of $6.4 million and changes in net operating assets and liabilities of $2.3 million. The non-cash charges primarily consisted of stock-based compensation of $5.0 million, depreciation and amortization of $1.2 million, and a loss on prepayment and termination of our 2019 credit facility of $0.2 million. …”see in full comparison
“During the year ended December 31, 2025, cash provided by operating activities was $10.0 million, which consisted of net loss of $0.6 million, non-cash charges of $9.0 million and changes in net operating assets and liabilities of $1.6 million. The non-cash charges primarily consisted of stock-based compensation of $5.8 million and depreciation and amortization of $3.2 million. …”see in full comparison
“On July 4, 2025, the OBBBA was enacted. The OBBBA maintains the 21 percent corporate tax rate and makes permanent many of the beneficial expired and expiring tax provisions originally enacted in the Tax Cuts and Jobs Act of 2017, including the immediate expensing of domestic research and development expenditures, more favorable interest deductibility and 100 percent bonus depreciation with effective dates in 2025. Revisions to the international tax framework are effective in 2026. …”see in full comparison
Full comparison: every changed paragraph (29)
We monitor a variety of key financial metrics to help us evaluate trends, establish budgets, measure the effectiveness of our business strategies, and assess operational efficiencies. These financial metrics include revenue, gross margin, operating expenses,expenses and operating income determined in accordance with generally accepted accounting principles in the United States (GAAP). Additionally, we monitor and project cash flow to determine our sources and uses for working capital to fund our operations. We also monitor Adjusted EBITDA,net income, a non-GAAP financial measure, and design wins. We define Adjusted EBITDAnet income as net income or loss adjusted for interest expense, taxes, depreciation and amortization, stock-based compensation expense, and restructuring costs, if any.expense.
Adjusted EBITDA.net income. Our management and board of directors use Adjusted EBITDAnet income to understandassess and evaluate our operatingoverall performance and financial trends, toinform preparethe annual budgeting process, and approveguide our annual budget and to developboth short-term and long-term operatingoperational and financingstrategic plans.planning. Accordingly,As such, we believe that Adjusted EBITDAnet income provides usefulmeaningful informationinsight for investors in understanding and evaluatinginto our operatingfinancial resultsperformance, inconsistent thewith same manner ashow our management team and board view and analyze our board of directors.results. Adjusted EBITDAnet income is a non-GAAP financial measure and should be considered inalongside, addition to,but not as a replacement for or superior to, or as a substitute for, net income as reported in accordance with GAAP. The following table presentsprovides a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted EBITDAnet income for the periods indicatedpresented:
Our Adjusted EBITDA for the year ended December 31, 2023 includes a one-time employee retention tax credit received of $2.0 million in the second quarter of 2023.
Effect of Health-Related Outbreaks on Our Business
Our global operations expose us to risks arising from public health crises and health-related outbreaks. These crises and outbreaks can adversely affect global economies and financial markets, which have the potential to negatively impact our operations and financial condition.
The ultimate extent of the impact of health-related events on our business, results of operations and financial condition will depend on future developments, which are highly uncertain, continuously evolving and cannot be predicted. See “Risk Factors” in Part I, Item 1A of this report for additional risks we face due to health-related events.
•Our commitment to improving our manufacturing excellence enabled us to drive yield improvements within our internal and external foundries network to sustain existing product margins.
Total revenue decreasedincreased by $13.4$4.8 million, or 21.0%,9.5%, from $63.8 million during the year ended December 31, 2023, to $50.4 million during the year ended December 31, 2024.2024, to $55.2 million during the year ended December 31, 2025. The decreaseincrease was primarily due to an increase in product sales revenue of $6.1 million, and partially offset by a decrease in productlicensing, salesroyalty, patent, engineering services and other revenue of $10.9$1.3 million due to timing of customer demand.million.
Licensing, royalty, patent, engineering services and other revenue is a highly variable revenue item characterized by a small number of transactions annually with revenue based on size and terms of each transaction. We estimate royalty revenue earned throughout the year, with an annual adjustment recognized for actual sales in the first quarter of each fiscal year. Licensing, royalty, patent, engineering services and other revenue decreased by $2.4$1.3 million, from $10.6 million during the year ended December 31, 2023, to $8.2 million during the year ended December 31, 2024.2024, to $6.9 million during the year ended December 31, 2025. The decrease was primarily due to the progression of our contractual agreements with customers for the development of RAD-Hard products, along with the conclusion of a contractual arrangement with a customer for the development of reliability models for strategic radiation hardened toggle MRAM. There were no patent sales during the year ended December 31, 2024.
Cost of product sales decreasedincreased by $1.9$3.1 million, or 7.6%,13.7%, from $24.7 million during the year ended December 31, 2023, to $22.8 million during the year ended December 31, 2024. The change was primarily due2024, to a$25.9 reductionmillion induring the year ended December 31, 2025. Cost of product sales comparedrelate primarily to costs of our Toggle and STT products and have increased consistently and proportionately with the prior year, offsetincrease in part by increased yields on our toggle products.revenues.
Cost of licensing, royalty, patent, engineering services and other revenue decreased by $0.4 million, or 19.9%,30.2%, from $1.8 million during the year ended December 31, 2023, to $1.5 million during the year ended December 31, 2024.2024, to $1.0 million during the year ended December 31, 2025. The changedecrease was primarily due to a decrease in licensing costs related to labor and materials associated with the progression of our RAD-Hard projects.
Our grossGross margin decreased from 58.4% during the year ended December 31, 2023, to 51.8% during the year ended December 31, 2024.2024, Ourto gross51.2% during the year ended December 31, 2025. Gross margin slightly decreased as a result of athe shift in product mix, a decrease in FAB loadings, and a decrease in licensingdifferent revenue partially offset by increased yields on our toggle products.mix.
Research and Development Expenses. Research and development expenses increased by $1.9$0.4 million, or 16.2%,2.9%, from $11.8 million during the year ended December 31, 2023, to $13.7 million during the year ended December 31, 2024.2024, Theto change$14.1 wasmillion during the year ended December 31, 2025. Research and development expenses relate primarily due to the development and enhancement of our new Extended Serial Peripheral Interface (xSPI) family of STT-MRAM products, which offer high-performance, multiple I/O, SPI-compatibility and feature a high-speed, low pin count SPI compatible interface, and increases in share-based compensation.interface.
General and Administrative Expenses. General and administrative expenses decreasedincreased by $0.2$0.4 million, or 1.1%,2.9%, from $14.3 million during the year ended December 31, 2023, to $14.1 million during the year ended December 31, 2024.2024, to $14.6 million during the year ended December 31, 2025. The changeincrease wasis primarily drivendue byto a reduction inone-time professional services.service fees.
Sales and Marketing Expenses. Sales and marketing expenses increased by $0.1$0.7 million, or 1.9%,13.4%, from $5.3 million during the year ended December 31, 2023, to $5.4 million during the year ended December 31, 2024.2024, to $6.1 million during the year ended December 31, 2025. The changeincrease wasis sales and marketing expenses relates primarily due to anhigher increasecompensation in headcountcosts and contract labor, partially offset by lower variable compensation costs.labor.
Interest ExpenseIncome
Interest expenseincome decreased by $0.1 million, or 100.0%,6.8%, from $0.1$1.8 million during the year ended December 31, 2023,2024, to zero$1.6 million during the year ended December 31, 2024.2025. The changedecrease wasis primarily due to having no outstanding balance under our 2019 Credit Facility as we paid off the outstanding balancedecrease in full in March 2023, resulting in no interest incurred during 2024 after the outstanding balance was paid in full.rates.
Other income, net increaseddecreased by $4.6$1.7 million, from $3.2$6.1 million during the year ended December 31, 2023,2024, to $7.8$4.4 million during the year ended December 31, 2024.2025. TheOther changeincome wasrelates primarily due to other income of $6.1 million recognized from a strategic award we received by the Company to develop a long-term plan to provide manufacturing services for aerospace and defense segments, a change in interest income earned on the money market cash account as a result of a change in cash balances, along with the non-recurrence of a loss on prepayment and termination of our 2019 Credit Facility, offset by non-recurrence of the employee retention tax credit of $2.0 million received during the second quarter of 2023.segments.
On July 4, 2025, the OBBBA was enacted. The OBBBA maintains the 21 percent corporate tax rate and makes permanent many of the beneficial expired and expiring tax provisions originally enacted in the Tax Cuts and Jobs Act of 2017, including the immediate expensing of domestic research and development expenditures, more favorable interest deductibility and 100 percent bonus depreciation with effective dates in 2025. Revisions to the international tax framework are effective in 2026. In the fourth quarter of 2025, the Company elected to immediately expense new domestic research and development expenditures, but continue amortizing the existing capitalized and unamortized expenditures as of December 31, 2024.
As of December 31, 2024,2025, we had $42.1$44.5 million of cash and cash equivalents, compared to $36.9$42.1 million as of December 31, 2023. As of December 31, 2024, we have no outstanding debt as we paid off our 2019 Credit Facility in full in March 2023.2024. We believe our cash and cash equivalents are sufficient to meet our anticipated capital requirements in the next 12 months. Our futurelong-term capital requirements will depend on many factors, including, among other things, our growth rate, the timing and extent of our spending to support our current and future manufacturing requirements, research and development activities, the timing and cost of establishing additional sales and marketing capabilities, and the introduction of new products.
Additionally, see “Credit Facilities” below for information regarding our debt financing.
During the year ended December 31, 2025, cash provided by operating activities was $10.0 million, which consisted of net loss of $0.6 million, non-cash charges of $9.0 million and changes in net operating assets and liabilities of $1.6 million. The non-cash charges primarily consisted of stock-based compensation of $5.8 million and depreciation and amortization of $3.2 million. The change in our net operating assets and liabilities was primarily due to a decrease in accounts receivable of $3.6 million due to timing of cash receipts for outstanding balances, an increase in accrued liabilities of $0.8 million, a decrease in other assets of $0.4 million, an increase in long-term income tax liability of $0.1 million, offset by an increase in inventory of $1.6 million to meet anticipated production volumes, a decrease in accounts payable of $0.5 million, a decrease in contract obligations of $0.6 million, and an increase in prepaid and other current assets of $0.6 million.
During the year ended December 31, 2023, cash provided by operating activities was $13.1 million, which consisted of net income of $9.1 million, non-cash charges of $6.4 million and changes in net operating assets and liabilities of $2.3 million. The non-cash charges primarily consisted of stock-based compensation of $5.0 million, depreciation and amortization of $1.2 million, and a loss on prepayment and termination of our 2019 credit facility of $0.2 million. The change in our net operating assets and liabilities was primarily due to an increase in accounts receivable of $0.9 million due to timing of cash receipts for outstanding balances, an increase in inventory of $1.7 million to meet anticipated production volumes, an increase in prepaid and other current assets of $0.4 million, an increase in other assets of $0.2 million, an increase in accounts payable of $0.5 million, an increase in accrued liabilities of $0.8 million, and a decrease in deferred revenue of $0.5 million.
During the year ended December 31, 2025, cash used in investing activities was $8.7 million, which consisted of capital expenditures primarily for the purchase of manufacturing equipment and purchased software.
During the year ended December 31, 2023, cash used in investing activities was $1.4 million, which consisted of capital expenditures primarily for the purchase of manufacturing equipment offset by a nominal amount in proceeds received on the sale of property and equipment.
During the year ended December 31, 2023,2024, cash used in financing activities was $1.6$1.1 million, which primarily consisted of $2.8 million of payments to pay off our 2019 Credit Facility offset by $1.2 million in proceeds from stock option exercises and purchases of shares under our employee stock purchase plan.
Critical Accounting Policies and Significant JudgementsJudgments and Estimates
Upon the transfer of control, generally at shipment, we record a trade receivable for the selling price as there is a legally enforceable obligation of the distributor to pay for the product delivered, an allowance is recorded for the estimated discount that will be provided to the distributor, and the net of these amounts is recorded as revenue on the statements of incomeoperations and comprehensive (loss) income.
Inventory
What changed in the latest 10-Q
Risk Factors
In addition to information set forth in this report, you should carefully consider the factors discussed in “Part I, Item 1A. Risk Factors” of our annual report on Form 10-K for our fiscal year ended December 31, 2025 which set forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition or operating results. You should review and consider such Risk Factors in making any investment decision with respect to our securities.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Comparison of the six months ended June 30, 2026 and 2025”
New heading “Cost of Sales and Gross Margin”
New heading “Operating Expenses”
New heading “Other Income, Net”
Largest changes
“General and Administrative Expenses. General and administrative expenses increased by $1.2 million, or 31.9%, from $3.8 million during the three months ended March 31, 2025, to $5.1 million during the three months ended March 31, 2026. The increase is primarily due to the litigation costs related to the patent infringement lawsuit described in Note 5 to our condensed financial statements included in Item 1 of this report.”see in full comparison
“General and Administrative Expenses. General and administrative expenses increased by $5.4 million, or 72.3%, from $7.5 million during the six months ended June 30, 2025, to $12.9 million during the six months ended June 30, 2026. The increase is primarily due to the litigation costs related to the patent infringement lawsuit described in Note 5 to our condensed financial statements included in Item 1 of this report.”see in full comparison
see in full comparisonInterestGeneralincomeandslightlyAdministrativedecreasedExpenses. General and administrative expenses increased by$0.1$4.2 million, or22.3%,114.9%, from$0.4$3.6 million during the three months endedMarchJune31,30, 2025, to$0.3$7.8 million during the three months endedMarchJune31,30, 2026. Thedecreaseincrease is primarily due to thedecreaselitigation costs related to the patent infringement lawsuit described ininterestNoterates.5 to our condensed financial statements included in Item 1 of this report.
“Cost of licensing, royalty, engineering services and other revenue decreased by $0.2 million, or 33.1%, from $0.6 million during the six months ended June 30, 2025, to $0.4 million during the six months ended June 30, 2026. The decrease was primarily due to a decrease in licensing costs related to labor and materials associated with the development of an AI technology application.”see in full comparison
Cost of licensing, royalty,see in full comparisonpatent,engineering services and other revenuedecreasedremainedbyconsistent at $0.3million, or 79.2%, from $0.4millionduringfor the three months endedMarchJune31,30,2025,2025to $0.1 million duringand the three months endedMarchJune31,30,2026.2026,The decrease was primarily due to a decrease in licensing costs related to labor and materials associated with the development of an AI technology application.respectively.
Full comparison: every changed paragraph (41)
We monitor a variety of key financial metrics to help us evaluate trends, establish budgets, measure the effectiveness of our business strategies, and assess operational efficiencies. These financial metrics include revenue, gross margin, operating expensesexpenses, and operating income determined in accordance with GAAP. Additionally, we monitor and project cash flow to determine our sources and uses for working capital to fund our operations. We also monitor adjusted net income, a non-GAAP financial measure, and design wins. We define adjusted net income as net income adjusted for stock-based compensation expense.expense, litigation costs, and non-recurring engineering fees (“NRE”).
The following tabletables setsset forth our results of operations for the periods indicated:
Comparison of the three months ended MarchJune 31,30, 2026 and 2025
We generated 90%79% and 60%66% of our revenue from products sold through distributors for the three months ended MarchJune 31,30, 2026 and 2025, respectively.
Total revenue increased by $1.7$5.5 million, or 13.2%,41.9%, from $13.1$13.2 million during the three months ended MarchJune 31,30, 2025 to $14.9$18.7 million during the three months ended MarchJune 31,30, 2026. The increase was due to an increase in product sales of $3.1$4.2 million or 27.9%,38.1%, primarily driven by higher customer demand and partiallyincreased offsetunit byshipments, aand decreasean increase in licensing, royalty, patent, engineering services and other revenue of $1.3 million.million or 62.2%.
Licensing, royalty, patent, engineering services and other revenue is a highly variable revenue item characterized by a small number of transactions annually with revenue based on size and terms of each transaction. We estimate royalty revenue earned throughout the year, with an annual adjustment recognized for actual sales in the first quarter of each fiscal year. Licensing, royalty, patent, engineering services and other revenue decreasedincreased by $1.3 million, or 63.4%62.2%, from $2.1 million during the three months ended MarchJune 31,30, 2025, to $0.8$3.4 million during the three months ended MarchJune 31,30, 2026. The decreaseincrease was primarily due to the conclusioncommencement of ana subcontract agreement providing engineering services for themilitary developmentand ofaerospace an AI technology application.applications.
Cost of product sales increased by $0.9$2.1 million, or 15.4%,34.5%, from $6.0$6.2 million during the three months ended MarchJune 31,30, 2025, to $7.0$8.3 million during the three months ended MarchJune 31,30, 2026. Cost of product sales relate primarily to costs of our Toggle and STT products and have increased consistently and proportionately with the increase in revenues.revenues on our Toggle and STT products.
Cost of licensing, royalty, patent, engineering services and other revenue decreasedremained byconsistent at $0.3 million, or 79.2%, from $0.4 million duringfor the three months ended MarchJune 31,30, 2025,2025 to $0.1 million duringand the three months ended MarchJune 31,30, 2026.2026, The decrease was primarily due to a decrease in licensing costs related to labor and materials associated with the development of an AI technology application.respectively.
Gross margin increased from 51.4%51.3% during the three months ended MarchJune 31,30, 2025, to 52.7%53.9% during the three months ended MarchJune 31,30, 2026. Gross margin increased as a result of the different revenue mix and yield improvements.mix.
Research and Development Expenses. Research and development expenses increased by $0.2 million, or 7.4%, from $3.4 million during the three months ended March 31, 2025, to $3.6 million during the three months ended March 31, 2026. The research and development expenses increase relates primarily to higher compensation costs and contract labor.
General and Administrative Expenses. General and administrative expenses increased by $1.2 million, or 31.9%, from $3.8 million during the three months ended March 31, 2025, to $5.1 million during the three months ended March 31, 2026. The increase is primarily due to the litigation costs related to the patent infringement lawsuit described in Note 5 to our condensed financial statements included in Item 1 of this report.
SalesResearch and MarketingDevelopment Expenses. SalesResearch and marketingdevelopment expenses increased by $0.4$1.3 million, or 27.0%,35.1%, from $1.5$3.6 million during the three months ended MarchJune 31,30, 2025, to $1.9$4.8 million during the three months ended MarchJune 31,30, 2026. The increase is salesresearch and marketingdevelopment expenses increase relates primarily to highernon-recurring compensationengineering costs and contract labor.fees.
InterestGeneral incomeand slightlyAdministrative decreasedExpenses. General and administrative expenses increased by $0.1$4.2 million, or 22.3%,114.9%, from $0.4$3.6 million during the three months ended MarchJune 31,30, 2025, to $0.3$7.8 million during the three months ended MarchJune 31,30, 2026. The decreaseincrease is primarily due to the decreaselitigation costs related to the patent infringement lawsuit described in interestNote rates.5 to our condensed financial statements included in Item 1 of this report.
Sales and Marketing Expenses. Sales and marketing expenses increased by $0.3 million, or 20.4%, from $1.5 million during the three months ended June 30, 2025, to $1.8 million during the three months ended June 30, 2026. The increase in sales and marketing expenses relates primarily to higher compensation costs and contract labor.
Interest income decreased by $0.1 million, or 25.3%, from $0.4 million during the three months ended June 30, 2025, to $0.3 million during the three months ended June 30, 2026. The decrease is primarily due to the decrease in interest rates.
Other income, net increaseddecreased by $1.7$0.4 million, or 442.8%,43.2%, from $0.4$0.8 million during the three months ended MarchJune 31,30, 2025, to $2.1$0.5 million during the three months ended MarchJune 31,30, 2026. Other income relates primarily to other income recognized from a strategic award we received to develop a long-term plan to provide manufacturing services for aerospace and defense segments.
Comparison of the six months ended June 30, 2026 and 2025
Revenue
We generated 84% and 63% of our revenue from products sold through distributors for the six months ended June 30, 2026 and 2025, respectively.
We maintain a direct selling relationship, for strategic purposes, with several key customer accounts. We have organized our sales team and representatives into three primary regions: Asia-Pacific (APAC); North America; and Europe, Middle East and Africa (EMEA). We recognize revenue by geography based on the region in which our products are sold, and not where the end products in which they are assembled are shipped. Our revenue by region for the periods indicated was as follows (in thousands):
Total revenue increased by $7.3 million, or 27.6%, from $26.3 million during the six months ended June 30, 2025 to $33.6 million during the six months ended June 30, 2026. The increase was due to an increase in product sales of $7.3 million or 33.0%, primarily driven by higher customer demand and increased unit shipments.
Licensing, royalty, engineering services and other revenue is a highly variable revenue item characterized by a small number of transactions annually with revenue based on size and terms of each transaction. We estimate royalty revenue earned throughout the year, with an annual adjustment recognized for actual sales in the first quarter of each fiscal year. Licensing, royalty, engineering services and other revenue remained consistent at $4.2 million for six months ended June 30, 2025 and six months ended June 30, 2026, respectively.
Cost of Sales and Gross Margin
Cost of product sales increased by $3.1 million, or 25.1%, from $12.2 million during the six months ended June 30, 2025, to $15.3 million during the six months ended June 30, 2026. Cost of product sales have increased consistently and proportionately with the increase in revenues on our Toggle and STT products.
Cost of licensing, royalty, engineering services and other revenue decreased by $0.2 million, or 33.1%, from $0.6 million during the six months ended June 30, 2025, to $0.4 million during the six months ended June 30, 2026. The decrease was primarily due to a decrease in licensing costs related to labor and materials associated with the development of an AI technology application.
Gross margin increased from 51.3% during the six months ended June 30, 2025, to 53.4% during the six months ended June 30, 2026. Gross margin increased as a result of the different revenue mix.
Operating Expenses
Our operating expenses consist of research and development, general and administrative and sales and marketing expenses. Personnel-related expenses, including salaries, benefits, bonuses and stock-based compensation, are among the most significant component of each of our operating expense categories.
Research and Development Expenses. Research and development expenses increased by $1.5 million, or 21.7%, from $6.9 million during the six months ended June 30, 2025, to $8.4 million during the six months ended June 30, 2026. The research and development expenses increase relates primarily to non-recurring engineering fees.
General and Administrative Expenses. General and administrative expenses increased by $5.4 million, or 72.3%, from $7.5 million during the six months ended June 30, 2025, to $12.9 million during the six months ended June 30, 2026. The increase is primarily due to the litigation costs related to the patent infringement lawsuit described in Note 5 to our condensed financial statements included in Item 1 of this report.
Sales and Marketing Expenses. Sales and marketing expenses increased by $0.7 million, or 23.7%, from $3.0 million during the six months ended June 30, 2025, to $3.7 million during the six months ended June 30, 2026. The increase in sales and marketing expenses relates primarily to higher compensation costs and contract labor.
Interest income slightly decreased by $0.2 million, or 23.8%, from $0.8 million during the six months ended June 30, 2025, to $0.6 million during the six months ended June 30, 2026. The change is primarily due to the decrease in interest rates.
Other Income, Net
Other income, net increased by $1.4 million, or 110.1%, from $1.2 million during the six months ended June 30, 2025, to $2.6 million during the six months ended June 30, 2026. Other income relates primarily to income recognized from a strategic award we received to develop a long-term plan to provide manufacturing services for aerospace and defense segments.
As of MarchJune 31,30, 2026, we had $40.5$43.9 million of cash and cash equivalents, compared to $44.5 million as of December 31, 2025. We believe our cash and cash equivalents are sufficient to meet our anticipated capital requirements in the next 12 months. Our long-term capital requirements will depend on many factors, including, among other things, our growth rate, the timing and extent of our spending to support our current and future manufacturing requirements, research and development activities, the timing and cost of establishing additional sales and marketing capabilities, and the introduction of new products.
During the threesix months ended MarchJune 31,30, 2026, cash provided by operating activities was $0.6$0.7 million, which consisted of net loss of $0.3$3.9 million, non-cash charges of $2.0$4.1 million and changes of net operating assets and liabilities of $1.1$0.5 million. The non-cash charges primarily consisted of stock-based compensation of $1.3$2.7 million,million and depreciation and amortization of $0.7$1.4 million. The change in our net operating assets and liabilities was primarily due to an increase in accountsaccrued payableliabilities of $1.6$3.1 million, an increase in accrueddeferred liabilitiesrevenue of $0.9$3.0 million, a decrease in prepaid and other current assets of $0.6 million, an increase in accounts payable of $0.5 million, offset by an increase in accounts receivable of $2.1$2.7 million, an increase in inventory of $2.4 million, a decrease in contract obligation of $1.2 million,million and an increase in inventoryother assets of $0.5$0.4 million.
During the threesix months ended MarchJune 31,30, 2025, cash provided by operating activities was $1.4$6.5 million, which consisted of net loss of $1.2$1.8 million, non-cash charges of $2.4$4.7 million and changes of net operating assets and liabilities of $0.2$3.6 million. The non-cash charges primarily consisted of stock-based compensation of $1.6$3.0 million,million and depreciation and amortization of $0.8$1.7 million. The change in our net operating assets and liabilities was primarily due to a decrease in accounts receivable of $4.4 million due to a one-time distributor transition, which provided improved payment terms, an increase in accounts payable of $1.1 million, an increase in deferred revenue of $1.1$0.8 million, an increase in contract obligationsobligation of $0.6$0.7 million, a decrease in prepaid expenses and other current assets of $0.2 million, offset by an increase in inventory of $1.9$2.2 million,million and ana increasedecrease in accountsaccrued receivableliabilities of $0.8$0.2 million.
Cash used in investing activities during the threesix months ended MarchJune 31,30, 2026 was $4.8$6.7 million primarily due to $4.4$5.7 million in purchases of manufacturing equipment and $0.5$1.0 million in purchasepurchases of intangible assets.
Cash used in investing activities during the threesix months ended MarchJune 31,30, 2025 was $1.4$3.9 million primarily due to $0.9$2.9 million in purchases of manufacturing equipment and $0.5$1.0 million in purchasepurchases of intangible assets.
Cash provided by financing activities during the threesix months ended MarchJune 31,30, 2026 was $0.3$5.4 million, consistingprimarily ofdue to proceeds from the exercise of employee stock options and purchase of shares under our employee stock purchase plan,plan offset by a nominal amount in payments ofon finance leases.
Cash provided by financing activities during the threesix months ended MarchJune 31,30, 2025 was $0.01$0.3 million, consistingprimarily ofdue to proceeds from the exercise of employee stock options and purchase of shares under our employee stock purchase plan,plan offset by a nominal amount in payments ofon finance leases.
MRAM insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 19 filings (7 insiders, 11 trade dates, 700,304 shares, about $19.3M). Net open-market shares: -700,304 (purchases minus sales); net value about -$19.3M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-02 | Aggarwal Sanjeev |
Open-market sale | 19,572 | $19.08 | $373.4K |
| 2026-10-02 | Cooper William Earl |
Open-market sale | 3,115 | $19.08 | $59.4K |
| 2026-10-02 | Dougherty Sean Michael |
Open-market sale | 7,691 | $19.08 | $146.7K |
| 2026-08-10 | Choudhary Vikas |
Grant/award | 15,693 | — | — |
| 2026-08-04 | Dougherty Sean Michael |
Grant/award | 8,610 | — | — |
| 2026-08-04 | Cooper William Earl |
Grant/award | 8,610 | — | — |
| 2026-08-04 | Finch Lawrence G |
Grant/award | 1,089 | — | — |
| 2026-07-06 | Aggarwal Sanjeev |
Open-market sale | 36,289 | $19.65 | $713.1K |
| 2026-07-06 | Cooper William Earl |
Open-market sale | 1,821 | $19.65 | $35.8K |
| 2026-07-06 | Dougherty Sean Michael |
Open-market sale | 422 | $19.65 | $8.3K |
| 2026-07-01 | Dougherty Sean Michael |
Open-market sale | 358 | $22.34 | $8.0K |
| 2026-07-01 | Aggarwal Sanjeev |
Open-market sale | 30,885 | $22.34 | $690.0K |
| 2026-07-01 | Cooper William Earl |
Open-market sale | 1,549 | $22.34 | $34.6K |
| 2026-05-29 | Finch Lawrence G |
Open-market sale | 267,730 | $26.40 | $7.1M |
| 2026-05-29 | Finch Lawrence G |
Open-market sale | 400 | $27.03 | $10.8K |
| 2026-05-21 | Ribar Geoffrey G |
Grant/award | 3,852 | — | — |
| 2026-05-21 | Mitchell Douglas M |
Grant/award | 3,852 | — | — |
| 2026-05-21 | Long Tara |
Grant/award | 3,852 | — | — |
| 2026-05-21 | Hawk Glen |
Grant/award | 3,852 | — | — |
| 2026-05-21 | Finch Lawrence G |
Grant/award | 3,852 | — | — |
| 2026-05-21 | Billerbeck Darin G |
Grant/award | 3,852 | — | — |
| 2026-05-20 | Ribar Geoffrey G |
Open-market sale | 27,488 | $28.87 | $793.6K |
| 2026-05-20 | Cooper William Earl |
Open-market sale | 10,000 | $29.13 | $291.3K |
| 2026-05-20 | Aggarwal Sanjeev |
Option exercise | 39,446 | $5.62 | $221.7K |
| 2026-05-20 | Aggarwal Sanjeev |
Option exercise | 11,578 | $8.17 | $94.6K |
| 2026-05-18 | Aggarwal Sanjeev |
Open-market sale | 83,048 | $32.48 | $2.7M |
| 2026-05-18 | Aggarwal Sanjeev |
Open-market sale | 19,144 | $33.21 | $635.8K |
| 2026-05-18 | Aggarwal Sanjeev |
Option exercise | 1,770 | $5.62 | $9.9K |
| 2026-05-18 | Aggarwal Sanjeev |
Option exercise | 100,422 | $8.17 | $820.4K |
| 2026-05-15 | Aggarwal Sanjeev |
Open-market sale | 8,784 | $40.00 | $351.4K |
| 2026-05-15 | Aggarwal Sanjeev |
Option exercise | 8,784 | $5.62 | $49.4K |
| 2026-05-15 | Hawk Glen |
Open-market sale | 9,418 | $39.13 | $368.5K |
| 2026-05-15 | Hawk Glen |
Open-market sale | 21,369 | $38.09 | $813.9K |
| 2026-05-15 | Hawk Glen |
Open-market sale | 400 | $39.97 | $16.0K |
| 2026-05-15 | Hawk Glen |
Open-market sale | 17,376 | $37.10 | $644.6K |
| 2026-05-11 | Finch Lawrence G |
Open-market sale | 41,961 | $34.29 | $1.4M |
| 2026-05-11 | Billerbeck Darin G |
Open-market sale | 30,000 | $37.16 | $1.1M |
| 2026-05-11 | Billerbeck Darin G |
Option exercise | 30,000 | $8.52 | $255.6K |
| 2026-05-06 | Cooper William Earl |
Open-market sale | 11,000 | $21.75 | $239.2K |
| 2026-05-06 | Finch Lawrence G |
Grant/award | 637 | — | — |
| 2026-05-04 | Aggarwal Sanjeev |
Open-market sale | 28,459 | $19.58 | $557.2K |
| 2026-04-02 | Aggarwal Sanjeev |
Open-market sale | 20,398 | $8.80 | $179.5K |
| 2026-04-02 | Cooper William Earl |
Open-market sale | 1,627 | $8.80 | $14.3K |
Well-known investors holding MRAM (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| D. E. Shaw & Co. | 2026-06-30 | 857,866 | $20.7M | 0.01% | Added 69% |
| Two Sigma Investments | 2026-06-30 | 540,138 | $13.1M | 0.01% | Added 446% |
| Renaissance Technologies | 2026-06-30 | 316,370 | $7.6M | 0.01% | Reduced 5% |
| Millennium Management (Israel Englander) | 2026-06-30 | 308,750 | $7.5M | 0.01% | No change |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 91,452 | $2.2M | 0.0% | Added 149% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 31,966 | $772.9K | 0.0% | Reduced 60% |