QUIK 10-K & 10-Q changes, risk factors and insider trading

In addition to other information in this Annual Report on Form 10-K and in other filings we make with the SEC, the following risk factors should be carefully considered in evaluating our business as they may have a significant impact on our business, operating resultsresults, and financial condition. If any of the following risks actually occurs, our business, financial condition, results of operations, and future prospects could be materially and adversely affected. Because of the following factors, as well as other variables affecting our operating results, past financial performance should not be considered as a reliable indicator of future performance and investors should not use historical trends to anticipate results or trends in future periods.

We have experienced net losses in the past years as we continue to develop new products, applications, and technologies. Most of our new products and products currently under development are generating stable gross margins as a percentage of revenue year over year. Our mature products also generate stable gross margins due to the markets that they serve. Whether we can achieve cash flow levels sufficient to support our operations cannot be accurately predicted, and our investment portfolio is subject to a degree of interest rate and liquidity risk. Unless such cash flow levels are achieved, in addition to the proceeds that we received during Fiscal 2024Year 2025 from the sale of our equity securities,securities or future such offerings, and the credit line we may be able to draw down from Heritage Bank of Commerce,Commerce or other future banking partners, we may need to obtain additional funds through strategic divestiture, or sell debt or equity securities, or some combination thereof, to provide funding for our operations. Such additional funding may not be available on commercially reasonable terms, or at all.

Factors that could cause our operating results to fluctuate include, without limitation: (i) successful development and market acceptance of our products and solutions; (ii) our ability to accurately forecast product volumes and mix, and to respond to rapid changes in customer demand; (iii) changes in sales volume or expected sales volume, product mix, average selling prices, or production variances that affect gross profit; (iv) the effect of end-of-life programs; (v) a significant change in sales to, or the collectability of accounts receivable from, our largest customers; (vi) our ability to adjust our product features, manufacturing capacitycapacity, and costs in response to economic and competitive pressures; (vii) our reliance on subcontract manufacturers for product capacity, yieldyield, and quality; (viii) our competitors’ product portfolio and product pricing policies; (ix) timely implementation of efficient manufacturing technologies; (x) errors in applying or changes in accounting and corporate governance rules; (xi) the issuance of equity compensation awards or changes in the terms of our stock plan or employee stock purchase plan; (xii) mergers or acquisitions; (xiii) the impact of import and export laws and regulations; (xiv) the cyclical nature of the semiconductor industry and general economic, market, political, and social conditions in the countries where we sell our products and the related effect on our customers, distributors, and suppliers; and (xv) our ability to obtain capital, debt financing, and insurance on commercially reasonable terms, and (xvi) allocations between our operating expenses and cost of sales. Although certain of these factors are out of our immediate control, unless we can anticipate and be prepared with contingency plans that respond to these factors, our business, results of operations, and financial condition could be materially adversely affected, which could cause our stock price to significantly fluctuate or decline.

We may also encounter periods of industry-wide semiconductor oversupply, resulting in pricing pressure, as well as undersupply, resulting in a risk that we could be unable to fulfill our customers' requirements. The semiconductor industry has historically been characterized by wide fluctuations in the demand for, and supply of, its products. These fluctuations have resulted in circumstances when supply of and demand for semiconductors has been widely out of balance. An industry-wide semiconductor oversupply could result in severe downward pricing pressure from customers. In a market with an undersupply of manufacturing capacity, we would have to compete with larger foundry and assembly customers for limited manufacturing resources. In such an environment, we may be unable to have our products manufactured in a timely manner, at a cost that generates adequate gross profitprofit, or in sufficient quantities. Since we outsource all of our manufacturing and generally have a single source of wafer supply, test, assembly, and programming for our products, we are particularly vulnerable to such supply shortages and capacity limitations. As a result, we may be unable to fulfill orders and may lose customers. Any future industry-wide oversupply or undersupply of semiconductors could therefore, have a material adverse effect on our business, results of operations, and financial condition.

Cyberattacks, like our January 2023 cybersecurity incident that was previously disclosed,Cyberattacks can lead to disruption of business, reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position.

As demonstrated by our January 2023 cybersecurity incident that was previously disclosed, securitySecurity vulnerabilities may arise from our hardware, software, employees, contractors, or policies we have deployed, and which may result in external parties gaining access to our networks, data centers, cloud data centers, corporate computers, manufacturing systems, and/or access to accounts we have at our suppliers, vendors, and customers. Due to the actions of outside parties, employee error, malfeasance, or otherwise, an unauthorized party may gain access to our data or our users’ or customers’ data, attack the networks causing denial of service, or attempt to hold our data or systems in ransom. The vulnerability could be caused by inadequate account security practices such as failure to timely remove employee access when terminated. To mitigate these security issues, we have implemented measures throughout our organization, including firewalls, backups, encryption, employee information technology policies, and user account policies. However, there can be no assurance these measures will be sufficient to avoid cyberattacks. If any of these types of security breaches were to occur and we were unable to protect sensitive data, our relationships with our business partners and customers could be materially damaged, our reputation could be materially harmed, and we could be exposed to a risk of litigation and possible significant liability.

Further, ifIf we fail to adequately maintain our infrastructure, we may have outages and data loss. Excessive outages may affect our ability to timely and efficiently deliver products to customers or develop new products and solutions. Such disruptions and data loss may adversely impact our ability to fulfill orders, patent our intellectual property or protect our source code, and interrupt other processes. Delayed sales or lost customers resulting from these disruptions could adversely affect our financial results, stock price, and reputation.

Effective May 25, 2018, the European Union ("EU") implemented the General Data Protection Regulation (“GDPR”) a broad data protection framework that expands the scope of current EU data protection law to non-European Union entities that process, or control the processing of, the personal information of EU subjects. The State of California enacted the California Consumer Privacy Act of 2018 (“CCPA”) effective on January 1, 2020, which contains requirements similar to GDPR for the handling of personal information of California residents, commencing on January 1, 2020. Further, the California Privacy Rights Act (“CPRA”), which was voted into law by California residents in 2020, became enforceable on July 1, 2023 and amends the CCPA, imposes additional data protection obligations on covered companies doing business in California and creates a new California data protection agency specifically tasked to enforce the law, which will likely result in increased regulatory scrutiny of California businesses in the areas of data protection and security. Privacy and security laws, self-regulatory schemes, regulations, standards, and other obligations are constantly evolving, and may conflict with each other, and any such laws, schemes, regulationsregulations, and standards may have an adverse impact on our business if we are not able to comply or if compliance requires time and resources for implementation.

Our company's, collaborators’, and contractors’ failure to fully comply with GDPR, CCPACCPA, and other laws could lead to significant fines and require onerous corrective action. In addition, data security breaches experienced by us or our collaborators or contractors could result in the loss of trade secrets or other intellectual property, public disclosure of sensitive commercial data, and the exposure of personally identifiable information (including sensitive personal information) of our employees, customers, collaborators, and others.

International operations are subject to certain risks inherent in conducting business outside the U.S., such as changes in currency exchange rates, tax laws, price and currency exchange controls, export and import restrictions, environmental regulations, protection of intellectual property rights, nationalization, expropriation, and other governmental action. Accordingly, our operations and revenue are subject to a number of risks associated with foreign commerce, including the following: (i) staffing and managing foreign offices; (ii) managing foreign distributors; (iii) collecting amounts due; (iv) political and economic instability; (v) foreign currency exchange fluctuations; (vi) changes in tax laws, import and export regulations, tariffstariffs, and freight rates; (vii) timing and availability of export licenses; (viii) supplying products that meet local environmental regulations; and (ix) inadequate protection of intellectual property rights. In addition, we incur costs in foreign countries that may be difficult to reduce quickly because of employee-related laws and practices in those foreign countries. Our global operations also may be adversely affected by political events and domestic or international terrorist events and hostilities. Current events, including the ongoing conflict in the Middle East,East (including the recent conflict between the U.S. and Iran), the Russia-Ukraine military conflict, rising tensions with Taiwan, potential disruption caused by pandemics, and potential changes in tariffs, trade restrictions, immigration policies, and tax reform proposals, create a level of uncertainty for multi-national companies. As U.S. companies continue to expand globally, increased complexity exists due to the possibility of renegotiated trade deals, revised international tax law treaties, and changes to the U.S. corporate tax code. These uncertainties could have a material adverse effect on our business and our results of operations and financial condition. As we continue to expand our business globally, our success will depend, in part, on our ability to anticipate and effectively manage these and other risks.

Actual events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds, have in the past (such as with the March 2023 failures of Silicon Valley Bank, Signature Bank, and Silvergate Capital Corp.) and may in the future lead to market-wide liquidity problems. We regularly maintain cash balances at financial institutions in amounts exceeding the Federal Deposit Insurance Corporation ("FDIC") insurance limit. If a financial institution in which we hold such funds fails, or is subject to significant adverse conditions in the financial or credit markets, we could lose all or a portion of our uninsured funds, or be subject to a delay in accessing all or a portion of our funds. If we are unable to access all or a significant portion of our funds for any extended period of time, we may not be able to pay our operational expenses or make other payments, including to our vendors and employees, and we may be subject to other operational challenges, any of which could adversely impact our liquidity and financial performance. If any parties with whom we conduct business are unable to access funds, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

The ultimate impact of a pandemic and its potential effects on our business depends on many factors that are not within our control. ThisIf a pandemic occurs, this could lead to further disruptions or restrictions on our ability to source, manufacture, or distribute our products, including temporary disruptions to the facilities of our contract manufacturers in China, Taiwan, the Philippines, and Singapore, or the facilities of our suppliers and their contract manufacturers globally. Additionally, multiple countries have imposed and may further impose restrictions on business operations and movement of people and products to limit the spread of a pandemic. Delays in production or delivery of components or raw materials that are part of our global supply chain due to restrictions imposed to limit the spread of a pandemic could delay or inhibit our ability to obtain the supply of components and finished goods. If the impact of a pandemic becomes more severeoccurs in the locations where we, our customers, or suppliers conduct business, or we experience more pronounced disruptions in our operations, we may experience constrained supply or curtailed demand that may materially adversely impact our business, cash flows, and results of operations.

Due to our relatively long product delivery cycle and the inability of our customers in the rapidly evolving end markets to confirm product requirements on a timely basis, we may have low visibility to product demand or estimated revenue in any given quarter. If our customerssuppliers cannot provide us with accurate delivery lead times, we may not be able to deliver products to our customers in a timely fashion. Furthermore, our ability to respond to increased demand is limited to inventories on hand or on order, the capacity available at our contract manufacturers, and our capacity to program products to customer specifications. If we fail to accurately estimate customer demand, or if our available capacity is less than needed to meet customer demand, we may not be able to accurately estimate our quarterly revenue, which may have a material adverse effect on our results of operations and financial condition, and our stock price could materially fluctuate as a result.

If, in the future, we conclude our internal control over financial reporting is not effective, investors could lose confidence in the reliability of our financial statements, which could result in a decrease in the valueprice of our common stock.

Global supply chain constraints have not had a material impact on our business. While we have experienced some volatilities with input material costs and supplier costs in accordance with domestic and global economic conditions, none of these have had a material impact to our business during our Fiscal 2024Year year.2025. We do not expect material increases in costs over the next twelve months. However, we expect to be subject to continued, broader-based inflationary, labor, and supplier cost increases in alignment with domestic and global economic conditions. We expect any increases in costs to be dilutive to our gross profit and we may be limited in our ability to offset any increased costs with price increases to customers. This may have a negative impact on our results from operations and cash flows.

We expect our business growth to be driven by new products, which currently include our eFPGA IP licenses and professional services, EOS™, QuickAI™, SensiML Analytics Toolkit, ArcticLink® III, PolarPro®3, PolarPro II, PolarPro, and Eclipse II products. The new product revenues growth of our new products needs to be strong enough to achieve profitability. The gross margin associated with our eFPGA IP is generally higher than the gross margin of our devices. Within our device revenue, gross margins of mature products, as well as new products sold to Aerospace and Defense customers, are generally higher than when selling the same products to higher volume IoT and/or Consumer customers. While we expect revenue and gross profit growth from new products will offset the expected decline in revenue and gross profit from our mature products, there is no assurance whether or when this will occur. In order to increase our revenue from its current level, we depend upon increased revenue from our existing new products, especially solutions based on our eFPGA IP, EOS S3, ArcticLink and PolarProIP solution platforms, mature FPGAs, and the development of additional new products and solutions.

If a market for our new products does not develop, or if our products do not meet customer needs, the loss of or reduction in orders could adversely affect our revenue and harm our business's financial condition, operating resultsresults, and cash flows.

We have history and experience in developing, selling, and supporting FPGA products and incorporating FPGA IP developed by us into our platform solutions. The eFPGA market is a developing market with unknown requirements and demand. Our current FPGA architectures and their performance may not be a good fit for the eFPGA Market.market. eFPGA IP is designed for specific foundry/process node combinations, and the ones we have chosen to target may be different from what our customers require. The software developed by us for eFPGA may be delayed or may not meet the needs of the eFPGA Market.market. The support required by a customer to incorporate the eFPGA may be much higher than expectedexpected, which may delay new engagements or lead to higher costs. The incorporated eFPGA IP may have an unexpected result in the customer’s chip leading to compensation demands. The expected NRE and royalty rates we expect to charge for the eFPGA may not be competitive, which may have a material adverse effect on our business, results of operationsoperations, and financial condition.

The imposition by the United States of tariffs, sanctionssanctions, or other restrictions on goods exported from the United States or imported into the United States or countermeasures imposed in response to such government actions could adversely affect our operations or our ability to sell our products globally, which could adversely affect our operating results and financial condition. Beginning in 2018, the U.S. government imposed significant additional tariffs on many items imported from China, which have since been raised to between 7.5% and 100% on certain products. China responded by imposing significant tariffs on many items imported from the United States. Recently, U.S. government leaders have increased their frequency of discussion of the imposition of stronger tariffs, sanctions, and other restrictions on goods exported from the United States or imported into the United States, and non-U.S. government leaders have increased their discussion of countermeasures. For example, in February 2025, the United States imposed an additional 10% tariff on imports of Chinese-origin goods and steel and aluminum imports. China announced plans to impose retaliatory tariffs on certain U.S.-origin goods and implemented new trade controls restricting the export of tungsten, tellurium, bismuth, molybdenum, and indium. As the February 2025, U.S. executive order contains provisions allowing for further increases in the scope and amount of tariffs in the event of retaliatory countermeasures, and the future of existing tariffs, and the possibility for new tariffs, remains very uncertain. Such escalations in these trade measures may directly impair our business by increasing trade-related costs or disrupting established supply chains and may indirectly impair our business by causing a negative effect on global economic conditions and financial markets. The ultimate impact of these trade measures is uncertain and may be affected by various factors, including whether and when such trade measures are implemented, the timing when such measures may become effective, and the amount, scope, or nature of such trade measures.

A small number of end-customers represented a significant portion of our total revenue in our Fiscal Year ended December 29,28, 2024.2025. During our Fiscal Year ended December 29,28, 2024,2025, onetwo customercustomers accounted for 54%44% and 11%, respectively, of our total revenue.revenue from continuing operations. We expect this high level of customer concentration to decrease as we continue to market our solutions to additional Aerospace and Defense, Industrial, Computing, and Communications customers. As in the past, future demand from thisthese customercustomers may fluctuate significantly from quarter to quarter. Customers typically order products with short, requested delivery lead times, and do not provide a commitment to purchase products past the period covered by purchase orders, which may be rescheduled or canceled. In addition, our manufacturing lead times are longer than the delivery lead times requested by these customers, and we make significant purchases of inventory and capital expenditures in anticipation of future demand. If revenue from any significant customer were to decline substantially, we may be unable to offset this decline with increased revenue and gross margin from other customers and we may purchase excess inventories. These factors could have a material adverse impact on our business, results of operations, and financial condition.

We perform work on a number of contracts with the U.S. Department of Defense and other agencies and departments of the U.S. GovernmentGovernment, including subcontracts with government prime contractors. Sales under contracts with the U.S. Government, including sales under contracts with the U.S. Department of Defense, as prime contractor or subcontractor, represented 54%44% of our total net sales from continuing operations in 2024.2025. Performance under government contracts has inherent risks that could have a material effect on our business, results of operations, and financial condition.

Government contracts are conditioned upon the continuing availability of Congressional appropriations, and the failure of Congress to appropriate funds for programs in which we participate could negatively affect our results of operations. U.S. Government operation under a continuing resolution could impact the business by preventing new programs from starting as planned and by limiting funding on existing programs. U.S. Government shutdowns have may resultresulted in delays in anticipated contract awards and delayed payments of invoices and any new shutdown or increase in shutdowns could have similar or worse effects. Any renewed emphasis on Federal deficit and debt reduction could lead to a further decrease in overall defense spending. Budgetary concerns could result in future contracts being awarded more on price than on other competitive factors, and smaller defense budgets could result in government in-sourcing of programs and more intense competition on programs that are not in-sourced, which could result in lower revenues and profits.

The new Presidential administration has announced plans to significantly cut federal spending and the size of the federal government and has taken steps to reduce and reorganize the federal workforce at many agencies. It is unclear how such cuts, if implemented, could impact our current and future business with the U.S. government. If cuts to government personnel lead to staff shortages or disorganization at certain federal agencies, we may experience delays in obtaining contract awards or payments, the loss of current or future contracts, or delays in obtaining necessary permits, licenseslicenses, or registrations.

We depend upon partnering with other companies to offer voice, motion, and other solutions into our platform.

We depend upon GlobalFoundries, TSMC, SkyWater Technologies, Honeywell Aerospace, Amkor Technology, Inc., Integra Specialty Products, JCET Group Co. Ltd., and Golden Altos Corp. to manufacture our new hardware products. The inability of any one of these companies to continue manufacture of our new hardware products for any reason would require us to identify and qualify a new foundry to manufacture our new hardware products. This would be time-consuming, difficult, and result in unforeseen operational problems. Alternate foundries might not be available to fabricate our new hardware products, or if available, might be unwilling or unable to offer services on acceptable terms and our ability to operate our business or deliver our products to our customers could be severely impaired.

We depend upon third parties for silicon IP, RTL, design, physical design, verificationverification, and assembly of our silicon platforms and any failure to meet our requirements in a timely fashion may adversely affect our time to market and revenue.

In addition to working directly with our customers, we partner with other companies that are experts in certain technologies to develop additional intellectual property, reference platforms, algorithms, and system software to provide application solutions. We also work with IoT processor manufacturers and companies that supply sensor, storage, networkingnetworking, or graphics components for embedded systems. The depth of these relationships varies depending on the partner and the dynamics of the end market being targeted but is typically a co-marketing relationship that includes joint account calls, promotional activities, and/or engineering collaboration and developments, such as reference designs. If we are unable to license new technologies or maintain a close working relationship with our partners, fail to continue to develop and introduce leading technologies, or if these technologies fail to generate the revenue we expect, we may not be able to compete effectively in the future, which may have a material adverse effect on our business, results of operations, and financial condition.

We contract with third parties to fabricate, assemble, test, and program our hardware products, and vendors for logistics. In general, each of our hardware products is fabricated, assembled, and programmed by a single supplier, and the loss of a supplier, transfer of manufacturing to a new location, expiration of a supply agreement, or the inability of our suppliers to manufacture our products to meet volume, performance, quality, and cost targets could have a material adverse effect on our business. Our relationship with our suppliers could change as a result of a merger or acquisition. IfIf, for any reasonreason, these suppliers or any other vendor becomes unable or unwilling to continue to provide services of acceptable quality, at acceptable costs, and in a timely manner, our ability to operate our business or deliver our products to our customers could be severely impaired. We would have to identify and qualify substitute suppliers, which could be time-consuming, difficult, and result in unforeseen operational problems, or we could announce an end-of-life program for these products. Alternate suppliers might not be available to fabricate, assemble, test, and program our hardware products or, if available, might be unwilling or unable to offer services on acceptable terms. In addition, if competition for wafer manufacturing capacity increases, if we need to migrate to more advanced wafer manufacturing technology, or if competition for assembly services increases, we may be required to pay or invest significant amounts to secure access to this capacity. The number of companies that provide these services is limited and some of them have limited operating histories and financial resources. In the event our current suppliers refuse or are unable to continue to provide these services to us, or if we are unable to secure sufficient capacity from our current suppliers on commercially reasonable terms, we may be unable to procure services from alternate suppliers in a timely manner, if at all. Moreover, our reliance on a limited number of suppliers subjects us to reduced control over delivery schedules, quality assurance, and costs. This lack of control may cause unforeseen product shortages or may increase our costs to manufacture and test our products.

Our solutions face competition from suppliers of ASSPs, integrated application processors, low-powerradiation-tolerant and radiation hardened FPGAs, low-power MCUs, ASICs, and eFPGA IP.

We face competition from companies that offer ASSPs. While it is difficult to provide a unique solution through the use of ASSPs, ASSPs generally are cost-effective standard products with short lead times. In certain design opportunities, ASSPs can be combined to achieve system design objectives. Manufacturers of integrated application processors often integrate new features when they introduce new products. A system designer could elect the use of an integrated processor that includes the features offered in our solutions and/or a widely accepted feature of our solutions could be integrated into a competitor’s ASSP. Some vendors offer low-power FPGAs that can be adopted by an IoT device for hardware differentiation that is similar in functionality, physical size, power consumption, and price to what we offer with our programmable logic-based solutions. We also face competition from low-power MCU companies. While MCUs cannot be customized at the hardware level for product differentiation, they do have the ability to run custom software algorithms written in standard C code, which may yield similar functionality to what we can provide with our products. Companies that supply ASICs, which may be purchased for a lower price at higher volumes, may have greater logic capacity, additional features, and higher performance than our products. In addition, we face competition from companies that provide sensor algorithm software, which may be licensed directly by an OEM, or licensed for use through an MCU company. If we are unable to successfully compete with companies that supply ASSPs, lower power FPGAs, MCUs, ASICs, or eFPGA IP, or sensor algorithm softwareIP in any of the following areas, our business, results of operations, and financial condition will be materially adversely affected: (i) the development of new products, solutions, and advanced manufacturing technologies; (ii) the quality, power characteristics, performance characteristics, price, and availability of hardware products, programming hardware, and software development tools; (iii) the ability to engage with companies that provide synergistic products and services, including algorithms that may be preloaded into our device at configuration; (iv) the incorporation of industry standards in our products and solutions; (v) the diversity of product offerings available to customers; and (vi) the quality and cost-effectiveness of design, development, manufacturingmanufacturing, and marketing efforts.

We have entered into strategic licensing and collaborative partnerships and relationships with third parties and will continue to enter into such partnerships and relationships with the goal of acquiring or gaining access to new and innovative semiconductor products and technologies, as well as other technologies which can be used to add to the differentiation of our emerging products, on a timely basis. Negotiating and performing under these arrangements involves significant time and expense, and we cannot provide assurance that the anticipated benefits of these arrangements will ever materialize or that the products or technologies involved will ever be commercialized or that, as a result, we will not have written down a portion or all of our investment. The arrangements with some third parties contain conditions and contingencies (such as a condition to raise a certain amount of capital), and we cannot provide assurance that we will meet all the conditions under these arrangements. We may end up owing various obligations and commitments to third parties related to these arrangements. Such arrangements can magnify several risks for us, including loss of control over the development and development timeline of products being developed with third parties. Accordingly, we face increased risk that development activities may result in products that are not commercially successful or that are not available in a timely fashion. In addition, any third-partythird party with whom we enter into a development, product collaboration, or technology licensing arrangement may fail to commit sufficient resources to the project, change its policies or priorities, and abandon or fail to perform its obligations related to the collaboration. The failure to timely develop commercially successful products through our development projects or strategic investment activities as a result of any of these and other challenges could have a material adverse effect on our business, results of operations, and financial condition. Other challenges and risks presented by use of strategic partnerships include the acquisition of a partner with which we have a strategic relationship by an unaffiliated third-partythird party that either delays or jeopardizes the original intent of the partnering relationship or investment.

New products revenue from continuing operations for the Fiscal Year ended December 29,28, 20242025 was $16.1$10.5 million, a decrease of $2.1$5.2 million as compared to the Fiscal Year ended December 31,29, 2023.2024. Of the $16.1$10.5 million in new products revenue,revenue from continuing operations, approximately $13.1$9.5 million was generated from eFPGA IP revenue, primarily eFPGA-related professional engineering services, as compared to approximately $16.8$13.1 million in the Fiscal Year ended December 31,29, 2023.2024. Mature products revenue from continuing operations for the Fiscal Year ended December 29,28, 20242025 was $4.0$3.3 million, ana increasedecrease of $1.0$0.7 million compared to the Fiscal Year ended December 31,29, 2023.2024. We shipped new products into multiple end market segments including Aerospace and Defense, Industrial, IoT, Consumer, and SaaS revenue from the new Artificial Intelligence ("AI") marketConsumer beginning in the Fiscal Year ended December 29,28, 2024. We reported a net loss of $3.8 million for the Fiscal Year ended December 29, 2024 compared to a net loss of $0.3 million in the Fiscal Year ended December 31, 2023.2025.

We have experienced net losses in the past years and expect to experience losses in at least some of the fiscal quarters during 20252026 as we continue to develop new products, applications, and technologies. Our new hardware products and hardware products currently under development are generating stable gross margins year over year and higher margins than our mature products due to the markets that we have targeted, and the larger order quantities associated with these new products. New eFPGA products have been generating higher gross margins as a percentage of revenue. Whether we can achieve cash flow levels sufficient to support our operations cannot be accurately predicted, and our investment portfolio is subject to a degree of interest rate and liquidity risk. Unless such cash flow levels are achieved, in addition to the $3.2$8.7 million, $3.5 million,million and $2.3$6.8 million in net proceeds that we received infrom Decemberour 2024, March 2024,2025 and March2024 2023, respectively, from the salesales of our equity securities, respectively, and the revolving line of credit we may be able to draw down from Heritage Bank of Commerce, or any future similar banking partners, we may need to obtain additional funds through strategic divestiture, or sell debt or equity securities, or some combination thereof, to provide funding for our operations. Such additional funding may not be available on commercially reasonable terms, or at all.

We continue to experience increased product and logistics costs and impacts from the worldwide semiconductor supply shortage. The semiconductor supply shortage is due, in part, to increased demand across multiple industriesindustries, resulting in a slowdown in production schedules. The semiconductor supply shortage is also impacting our supply chain and our ability to meet demand for some of our customers.

Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. Areas where we use subjective judgment include, but are not limited to, revenue recognition, inventory valuation, including the identification of excess quantities, market value, and obsolescence, and valuation of goodwill and long-lived and intangible assets. We believe that we apply judgments and estimates in a consistent manner and that such consistent application results in consolidated financial statements and accompanying notes that fairly represent all periods presented. However, any factual errors or errors in these judgments and estimates may have a material impact on our consolidated financial statements.

We earn revenue from principal activities by (i) delivering standard hardware products,products and (2ii) delivering and providing eFPGA IP products and professional services, (iii) and providing software as a service to customers, as well as (iviii) other miscellaneous revenue.

We recognized hardware product revenue of approximately $4.2 million, or 31% of total revenue from continuing operations and $6.1 million, or 30%31% of total revenue,revenue $4.0from million,continuing or 19% of total revenue, and $8.1 million, or 50% of total revenue,operations in the Fiscal Years ended December 28, 2025 and December 29, 2024, December 31, 2023, and January 1, 2023, respectively.

While the terms and conditions of the sale of hardware products generally do not allow for refunds or product returns other than for warranty repairs, we do record an allowance for hardware product sales returns. The allowance for sales returns is based on a historical returns analysis of the prior four quarters that is performed on a quarterly basis. Amounts recorded for hardware product sales returns were $1$2 thousand, $8 thousand,thousand and $2$1 thousand for the yearsFiscal Years ended December 28, 2025 and December 29, 2024, December 31, 2023, and January 1, 2023, respectively, on our consolidated statements of operations. While hardware product sales returns have not been material to the companyCompany in recent reporting periods, we note there is an inherent uncertainty in estimating this allowance. In the case where actual results may significantly vary from management estimates, we may be required to make future adjustments to our revenues and operating results.

We recognized eFPGA IP revenue of approximately $9.5 million, or 69% of total revenue from continuing operations and $13.1 million, or 65%67% of total revenue,revenue $16.8from million,continuing or 79% of total revenue, and $7.5 million, or 47% of total revenue,operations in the Fiscal Years ended December 28, 2025 and December 29, 2024, December 31, 2023, and January 1, 2023, respectively.

SaaS and Other Miscellaneous Revenue

We recognized SaaSOther and OtherMiscellaneous Revenue of approximately $0.9$0.1 million, or 4%0.5% of total revenue,revenue from continuing operations and $0.4 million, or 2%2.2% of total revenue,revenue andfrom $0.6continuing million, or 3% of total revenue,operations in the Fiscal Years ended December 28, 2025 and December 29, 2024, December 31, 2023, and January 1, 2023, respectively.

Our long-lived assets include property and equipment, software, tooling, furniture and fixtures, leasehold improvements, and internal-useinternally developed software. These assets are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of long-lived assets is calculatedrecognized on a straight-line basis over the estimated useful lives of the assets, which generally range from one to ten years,years. with the amortization period of internal-useInternal-use software beingis generally amortized over five years and the amortization period of leasehold improvements beingare amortized over the shorter of the lease term or the estimated useful liveslife of the assets, which isasset, generally three to five years. We note the estimation ofDetermining the useful lives of our long-lived assets involvesrequires judgmentmanagement and estimation by management.judgment. In the determination of an asset’sestimating useful life,lives, we consider thefactors followingincluding factors:technological obsolescence, competition, historical product life cycles, and industry and market considerations, among others.conditions. Refer to Note 56 for additional information on the useful life ranges of our long-lived assets.

We recognize assets for pre-production designdevelopment and developmenttooling costs for which there is aan contractualalternative reimbursementuse byto the customer.Company. These assets are classified underas 'tooling' within property and equipment and are depreciated over thetheir estimated useful lives of the assets,lives, generally seven years. ReferTooling tomay Noteinclude 4both fortangible additionaland information.intangible assets, including but not limited to, mask sets and other semiconductor production tooling used in the manufacture of customer-specific products.

We capitalize costs related to the development and enhancement of hosted services we provide to our customers and the development and enhancement of other internally used engineering softwaresoftware, hosted services platforms provided to customers, and certain enterprise-level operational systems as internal-use software. CostsCapitalization incurredof ininternally developed software for internal-use begins when the application development phasestage is reached and management determines that the project is probable for completion and the software will be used to perform the function intended. Costs incurred during the application development stage, including upgrades and enhancements, are capitalized and amortized on a straight-line basis over their usefulestimated lives, which are generally five to seven years. Costs relatedincurred toduring the planning and other preliminary project activitiesstage and post-implementation activities are expensed as incurred. We also capitalize costs related to internally used enterprise-level business and finance software in support of our operational needs as software.

Acquired intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited. We review the recoverability of our long-lived assets annually and when events or changes in circumstances occur that indicate that the carrying value of the asset oran asset group may not be recoverable. WeRecoverability assessis possible impairmentassessed based on ourthe abilityexpected tofuture recoverundiscounted cash flows of the asset group. If the carrying value of the asset or asset group fromexceeds the expected future pre-taxundiscounted cash flows (undiscounted and without interest charges) of the related operations, as well as the useful lives applied to the assets. If these cash flows are less than the carrying value of the asset or asset group,flows, an impairment loss is recognized for the difference between the estimated faircarrying value and the carryingestimated value, and the carryingfair value of the relatedasset assets is reduced by this difference. The measurement of impairment requires management to estimate future cash flows and the fair value of long-lived assets.group. In estimating future cash flows and the fair value of our long-lived assets,value, we consider changes in legal factors andfactors, the business climate, product and technologytechnological obsolescence, and competition.competitive Weconditions. performed anOur annual impairment assessmentassessments performed in the fourth quarters of 2024Fiscal Years 2025 and 20232024 andindicated deemedthat no impairment was necessary for the current or prior year. Subsequent to our annual impairment testing in the fourth quarters of 2024 and 2023, there were no indicators of impairment that gave cause for additional impairment testing of our long-lived assets. No impairment ofor intangible assets haswas beenidentified recognizedfor toour date.continuing Additionally, we did not recognize any gains or losses on the disposal of equipment in the years ended December 29, 2024 or December 31, 2023.operations.

New products revenue consists of revenues from the sale of hardware products manufactured on 180 nanometer or smaller semiconductor processes and eFPGA IP licenses, as well as professional services. Mature products include all products produced on semiconductor processes larger than 180 nanometer. Associated royalty revenues are included within their respective device's Total revenue decreased approximately $1.1$5.9 million, or (530)% in Fiscal Year ended December 29,28, 20242025 as compared to the Fiscal Year ended December 31,29, 2023.2024. The decrease in total revenue was comprised of a decrease of $2.1$5.2 million in new product revenue,revenue partiallyand offseta by an increasedecrease of $1.0$0.7 million in mature product revenue.

The decrease in new product revenue was primarily driven by a decrease in eFPGA IP revenue, partially offset by increases in new hardware product revenue and SaaS & Other revenue. eFPGA IP revenue is comprised primarily of eFPGA intellectual property revenue, eFPGA-related professional services revenue, and eFPGA-related support and maintenance revenue. eFPGA IP revenue decreased approximately $3.7$3.6 million, or (2228)%, as compared to the Fiscal Year ended December 31,29, 2023.2024. The decrease in eFPGA IP revenue was primarily comprised of a $3.5$3.7 million decrease in eFPGA-related professional services revenue. SaaSNew & Otherhardware revenue increaseddecreased by approximately $0.3$1.6 million, or 225%(61)%, asin the Fiscal Year ended December 28, 2025 compared to the Fiscal Year ended December 31,29, 2023.2024. The increase in SaaS & Other revenue was driven by a $0.3 million increase in SaaS IP revenue. New hardware revenue increased by approximately $1.3 million, or 107%, in the Fiscal Year ended December 29, 2024 compared to the Fiscal Year endedDecember 31, 2023. The increasedecrease in new hardware product revenue was primarily comprised of ana increasedecrease of $1.1$1.6 million in connectivity product revenue and $0.2 million in display product revenue.

Contract liabilities (deferred revenue) associated with eFPGA-relatedeFPGA professionalIP servicesrevenues revenuewere was $0.4$0.1 million and $1.0$0.4 million and were included in deferred revenue on the consolidated balance sheets as of December 29,28, 20242025 and December 31,29, 2023,2024, respectively. Contract assets associated with eFPGA-relatedeFPGA professionalIP servicesrevenues revenuewere was $2.7$0.2 million and $3.6$2.7 million on the consolidated balance sheets as of December 29,28, 20242025 and December 31,29, 2023,2024, respectively.

Gross profit in Fiscal Year 20242025 compared to Fiscal Year 20232024 decreased approximately $2.6$9.1 million, or (1875)%. The change in gross profit reflects a decrease in revenue of $1.1$5.9 million, or (530)%, accompanied by an increase in cost of revenue of $1.5$3.2 million, or 23%.42%. The decrease in revenue was driven by a $2.1$5.2 million decrease in new product revenue, primarily due to reductions in eFPGA IP professional services revenue, partially offsetaccompanied by a $1.0$0.7 million increasedecrease in mature product revenue. The $1.5$3.2 million increase in cost of revenue was primarily comprised of increases in labor,compensation expense, tooling, and tooling-related depreciation expense, offset by decreases in consulting costs, all collectively associated with performing for revenue contracts, includingin deviceaddition production,to andan additionally further offset by changesincrease in inventoryreserves reserves.related to certain wafer product inventory.

Our hardware products have historically had a long product life cycle and obsolescence has not been a significant factor in the valuation of inventories. However, as we pursue opportunities in the IoT market and continue to develop new products, we believe our product life cycle may be shorter, which will increase the potential for obsolescence. In general, our standard manufacturing lead times are longer than the binding forecasts we receive from customers. The sale of inventories previously written-off was approximately $0.1 million and $0.1 million in Fiscal Years 20242025 and 2023,2024, respectively. We wrote down approximately $0.1$0.6 million and $0.6$0.1 million to inventory reserves in Fiscal Years 20242025 and 2023.2024, respectively.

Research and Development Expenses. Our research and development expenses consist primarily of personnel, overhead, and other costs associated with System on Chip ("SoC") and software development, programmable logic design, and AI and eFPGA development. R&D expenses were $6.5$5.3 million and $6.4$5.8 million in Fiscal Years 20242025 and 2023,2024, respectively, which represented 32%39% and 30%, respectively, of revenue for those periods. The $0.1$0.6 million increasedecrease in R&D expenses in Fiscal Year 20242025 as compared to Fiscal Year 20232024 was primarily attributable to increasesan in employee salaries, financing arrangement expenses, and reductions in the allocationincrease of R&D expenseslabor allocations to costCost of revenues,Revenues and decreases in salaries and compensation, partially offset by aan decreaseincrease in consultinggeneral costs,allocations and software maintenancetool costs, and amortization expense associated with software tools. R&D costs allocable to cost of revenues are included in cost of revenue in the consolidated statements of operations.amortization.

Selling, General and Administrative Expenses. Our selling, general and administrative ("SG&A") expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, administration, human resources, and general management. SG&A expenses were $8.8$9.3 million and $8.0$8.8 million in Fiscal Years 20242025 and 2023,2024, respectively, which represented 44%67% and 38%,45%, respectively, of revenue for those periods. The $0.8$0.5 million increase in SG&A expenses in Fiscal Year 20242025 as compared to Fiscal Year 20232024 was primarily attributable to an increase in salariesbonus andincentive stock-based compensation costs,compensation, partially offset by a decreasedecreases in incentivestock-based compensation.compensation costs.

Income tax expense for the Fiscal Year 20242025 and 20232024 relates primarily to US state and foreign income tax provisions.

We have described under the heading “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 28, 2025, filed with the SEC on March 27, 2026, and under the heading "Risk Factors" included in our Form 10-Q for the quarter ended March 29, 2026, filed with the SEC on May 13, 2026, a number of risks and uncertainties that could cause our actual results of operations and financial condition to vary materially from past, or from anticipated future, results of operations and financial condition. Except as set forth below, thereThere have been no material changes from these risk factors previously described in our 2025 Annual Report on Form 10-K for the year ended December 28, 2025.2025 and our Quarterly Report on Form 10-Q for the quarter ended March 29, 2026. These risks and uncertainties are not the only risks facing us. Additional risks and uncertainties not presently known to us or that we currently deem not material may also adversely affect our business, financial condition, results of operations, or the market price of our Common Stock.

For cost-sensitive applications, we utilize small form-factor packaging options that reduce device costcosts and minimize printed circuit board space requirements for customers. For applications requiring enhanced environmental reliability, including certain aerospace and defense systems, we support packaging options designed for ruggedized operating environments.

In the first quarter of 2025, we announced our Board of Directors was actively exploring options for the sale of our wholly-owned subsidiary, SensiML. This decision by us and our 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 our 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, we will focus all of our resources on leveraging and growing the cornerstones of our core business model.

During the firstsecond quarter of 2026, we generated total revenue from continuing operations of $5.1$5.5 million, an increase of 35%9% compared to the prior quarter, and an increase of 17%49% compared to the same quarter last year. Our new product revenue from continuing operations in the firstsecond quarter was $4.3$4.7 million, an increase of 51%9% from the prior quarter and an increase of 14%60% from the firstsecond quarter of 2025. Our mature product revenue from continuing operations was $0.8 million in the firstsecond quarter of 2026, aan decreaseincrease of 14%8% compared to the prior quarter, and an increase of 32%7% compared to the firstsecond quarter of 2025. We expect our mature product revenue to continue to fluctuate over time.

We devote substantially all of our development, sales, and marketing efforts to our new eFPGA IP licensing and professional services. Overall, we reported a net loss from continuing operations of $2.2$0.9 million for the firstsecond quarter of 2026, as compared to a net loss from continuing operations of $3.6$2.2 million in the prior quarter and a net loss from continuing operations of $2.1$2.7 million for the firstsecond quarter of 2025.

We reported a net loss from discontinued operations of $4$5 thousand for the firstsecond quarter of 2026, as compared to a net loss from discontinued operations of $2.4$4 millionthousand in the prior quarter and a net loss from discontinued operations of $0.1$9 millionthousand for the firstsecond quarter of 2025. The net loss from discontinued operations of $2.4 million recognized in the prior quarter was primarily attributable to the full impairment of the asset group of the SensiML subsidiary in the amount of $2.4 million.

As of MarchJune 29,28, 2026, we had one operating lease with a remaining lease term of 1.170.92 years. The operating lease relates to our company headquarters in San Jose, CA.

The methodologies, estimates, and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our consolidated financial statements. The SEC has defined critical accounting policies as those that are most important to the portrayal of the Company's financial condition and results of operations and requires us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our critical accounting policies include revenue recognition, inventory valuation, including the identification of excess quantities, market value, and obsolescence, and valuation of long-lived and intangible assets. We believe that we apply judgments and estimates in a consistent manner and that such consistent application results in consolidated financial statements and accompanying notes that fairly represent all periods presented. However, any factual errors or errors in these judgments and estimates may have a material impact on our financial statements. During the three and six months ended MarchJune 29,28, 2026, there were no changes in our critical accounting policies from our disclosure in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025, which was filed with the SEC on March 27, 2026.

Three Months Ended MarchJune 29,28, 2026 Compared to Three Months Ended MarchJune 30,29, 2025

The table below sets forth the changes in revenue from continuing operations in the three months ended MarchJune 29,28, 2026 compared to the three months ended MarchJune 30,29, 2025 (in thousands, except percentage data):

Product revenue for the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025 increased $0.7$1.8 million. The increase primarily resulted from increases in eFPGA IP and professional services revenues.

The table below sets forth the changes in new product revenue from continuing operations in the three months ended MarchJune 29,28, 2026 compared to the three months ended MarchJune 30,29, 2025 (in thousands, except percentage data):

eFPGA IP revenue for the three months ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025 was $4.2$4.4 million and $3.6$2.6 million, respectively, which was primarily professional services revenue.

The table below sets forth the changes in gross profit from continuing operations for the three months ended MarchJune 29,28, 2026 compared to the three months ended MarchJune 30,29, 2025 (in thousands, except percentage data):

In the firstsecond quarter of 2026, gross profit decreasedincreased $35$1.5 thousand,million, or 2%,152%, compared to the same quarter in the prior year. The net decreaseincrease in gross profit reflects a 31%49% increase in cost of revenue, partially offset by a 17%13% increase in revenues.cost of revenue. Revenue increased from the same quarter in the prior year due to increased eFPGA IP and professional services revenues as the result of timing for related contracts. The net increase in cost of revenues was primarily due to increases in consulting services and increased depreciation, as well as additional inventory reserves.depreciation.

The table below sets forth the changes in operating expenses from continuing operations for the three months ended MarchJune 29,28, 2026 compared to the three months ended MarchJune 30,29, 2025 (in thousands, except percentage data):

Our R&D expenses consist primarily of personnel, overhead, and other costs associated with System on Chip ("SoC") and software development, programmable logic design, and eFPGA development. R&D expenses for the firstsecond quarter of 2026 as compared to the same quarter in 2025 increased $0.2$0.4 million, primarily due to increases in compensation and slightemployee-related increasesexpenditures inand softwareamortization toolingand expenditures.depreciation expense.

Our selling, general and administrative ("SG&A") expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, administration, human resources, and general management. The $0.1$0.6 million decreaseincrease in SG&A expenses in the firstsecond quarter of 2026, as compared to the firstsecond quarter of 2025, was attributable primarily to decreasedincreased compensation costs,costs partiallyand offsetcredit byloss an increase in benefits allocations.expense.

The table below sets forth the changes in interest expense and interest income and other income (expense), net from continuing operations for the three months ended MarchJune 29,28, 2026 compared to the three months ended MarchJune 30,29, 2025 (in thousands, except percentage data):

Interest expense relates primarily to our revolving line of credit facilityfacilities and notes payable. Interest income and other income (expense), net, relates to net foreign exchange losses recorded, partially offset by interest earned in our money market accounts. Changes in interest expense are related to varying levels of utilization of our revolving loan. Interest expense for the firstsecond quarter of this year as compared to the same period in the prior year decreased approximately $43$37 thousand. We did not utilize our revolving loan in the three months ended March 29, 2026. Interest income and other income (expense), which is mostly comprised of bank fees, net foreign exchange losses, and refunds, increased approximately $26$11 thousand. Additionally, the Company recognized a $1.0 million gain upon the extinguishment of a vendor payable.

The table below sets forth the changes in the provisions for income taxes in the three months ended MarchJune 29,28, 2026, compared to the three months ended MarchJune 30,29, 2025 (in thousands, except percentage data):

The Company recorded a net income tax benefitexpense of approximately $3 thousand for the three months ended MarchJune 29,28, 2026 and a net income tax expense of $5$1 thousand for the three months ended MarchJune 30,29, 2025. The effective tax rate foras of the firstsecond quarter ended MarchJune 29,28, 2026 was 0.14%(0.01)% as compared to (0.240.13)% for the same period in the prior year.

Balance sheet amounts from continuing operations at MarchJune 29,28, 2026 compared to December 28, 2025 resulted from typical and usual activities in the normal course of business.

Total assets decreased by approximately $12.4$1.8 million, primarily due to a $12.8 million reduction in cash and cash equivalents due to greater payments than borrowings on our revolving line of credit, a $0.2 million reduction in prepaid expenses and other current assets, a $0.1$1.5 million reduction in accounts receivable and contract assets due to the collection of outstanding receivables, a $0.1$0.6 million net decrease in equipment and internal-use software assets, a $0.4 million reduction in cash and cash equivalents due to greater payments than borrowings on the Company's revolving line of credit, a $0.2 million in amortization expense of our right-of-use assets, and a $0.1 million reduction in our inventory balances, partially offset by a $0.5$0.8 million net increase in equipmentprepaid expenses and internal-useother softwarecurrent assets and a $0.4$0.1 million net increase in other assets.

Liabilities decreased by approximately $14.2$10.6 million due to greater payments than borrowings in the amount of $15.0$10.0 million on our revolving linelines of creditcredit, a $0.6 million decrease in accrued liabilities, and payments on notes payable and operating leases of $0.2 million and $0.1 million, respectively, partially offset by net borrowings on notes payable ofa $0.3 million, increases in accrued liabilities and deferred revenues of $0.3 million, and a $0.2 million increase in tradedeferred payables.revenues.

Equity increased $1.8$8.8 million due to a $4.0$11.9 million increase in additional paid in capital arising from the sale of shares of common stock and recognition of stock-based compensation, partially offset by a $2.2$3.1 million net loss for the threesix months ended MarchJune 29,28, 2026.

We have financed our operations and capital investments through the sale of our common stock, financing arrangements, operating leases, and cash flows from operations. As of MarchJune 29,28, 2026, our principal sources of liquidity consisted of cash and cash equivalents from continuing operations of $6.0$18.5 million, inclusive of a $5.0 million advance from our Revolving Credit Facility and $3.1$9.5 million in net proceeds from the sale of our common stock in the threesix months ended MarchJune 29,28, 2026. We did not utilize our $20.0 million revolving line of credit with Heritage Bank of Commerce in the three months ended March 29, 2026.

On February 25, 2025, we entered into an At Market Issuance Sales Agreement (the "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, we may offer and sell, from time to time, through the Agent, shares of our common stock, par value of $0.001 per share, having an aggregate offering price of up to $20,000,000 (the "ATM Offering"). In the three months ended March 30, 2025, we sold 182 thousand shares under the ATM offering, resulting in net cash proceeds of approximately $1.2 million. Issuance costs related to the ATM Offering were $89 thousand.$20,000,000.

In connection with the New Registration Statement, we filed a sales prospectus whereby we amended, restated, and renewed our ATM program, allowing us to sell an aggregate offering price of up to $20,000,000 (the "Amended ATM Offering"). We also amended and restated our At Market Sales Agreement with the Agent on August 14, 2025. The $20,000,000 shares of our common stock that may be sold under the Amended ATM Offering are included in the $125,000,000 of our securities that may be sold under the New Registration Statement.

During the threesix months ended MarchJune 29,28, 2026, we sold 403903 thousand shares under the Amended ATM Offering, resulting in net cash proceeds of approximately $3.1$9.5 million. Issuance costs related to the amendedAmended ATM Offering were $94$297 thousand. In the six months ended June 29, 2025, we 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.

We currently use our cash to fund our working capital, to accelerate the development of next-generation products, and for general corporate purposes. Based on past performance and current expectations, we believe that our existing cash and cash equivalents, together with $3.1$9.5 million in net cash proceeds from the Amended ATM Offering and sales thereby, our revenues from operations, and the available financial resources from our newRevolving revolvingCredit facility with Sunflower Bank, N.A.Facility will be sufficient to fund our operations and capital expenditures and provide adequate working capital for the next twelve months.