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What changed in QUICKLOGIC Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of QUICKLOGIC Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+444 added−432 removedSource: 10-K (2025-03-26) vs 10-K (2023-03-28)

Top changes in QUICKLOGIC Corp's 2024 10-K

444 paragraphs added · 432 removed · 272 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

65 edited+40 added−54 removed19 unchanged
Biggest changeAs of January 1, 2023 , our research and development staff consists of eighteen employees located in California, Oregon and Taiwan. • Our system software group creates the drivers and other system code required to connect our silicon hardware products to Application Processors, drivers and microcode to support our sensor hubs. • Our platform engineering group develops low power programmable hardware products and system IP that can be used in standalone solution platforms such as PolarPro 3E or combined in solution platforms such as EOS S3. • Our electronic design and automation software group collaborates with the open source software community to ensure the design libraries, interface routines and place and route software that allow our customer to take their own designs and target them to programmable hardware products and develops the design tools that support algorithm development for our sensor hubs. • Our hardware group develops and verifies IP Blocks that can be programmed into our programmable logic and develops primarily open source hardware reference designs to showcase and verify our solutions. • Our product engineering group oversees product manufacturing and process development with our third-party foundries and is involved in ongoing process improvements to increase yields and optimize device characteristics. • The office of the CTO investigates future trends and requirements in order to define the next generation of solutions and platforms. • Our SensiML group develops and maintains all software with respect to the SensiML Analytics Software Suite. 8 Table of Contents Manufacturing We have close relationships with third-party manufacturers for our customer commercial products for wafer fabrication, package assembly, and testing requirements to help us ensure stability in the supply of our products and to allow us to focus our internal efforts on product and solution design and sales.
Biggest changeOur system software group creates the drivers and other system code required to connect our silicon hardware products to Application Processors, drivers, and microcode to support our sensor hubs. • Our hardware group develops and verifies IP Blocks that can be programmed into our programmable logic and develops primarily open-source hardware reference designs to showcase and verify our solutions. • Our product engineering group oversees product manufacturing and process development with our third-party foundries and is involved in ongoing process improvements to increase yields and optimize device characteristics. • The office of the CTO investigates future trends and requirements in order to define the next generation of solutions and platforms. • Our SensiML group develops and maintains all software with respect to the SensiML Analytics Software Suite.
The well-being of employees is a key priority and includes a dynamic and welcoming workplace that promotes inclusive diversity, fosters collaboration and encourages employees to bring their best ideas to work every day, and promotes work-life balance.
The well-being of employees is a key priority and includes a dynamic and welcoming workplace that promotes inclusive diversity, fosters collaboration, encourages employees to bring their best ideas to work every day, and promotes work-life balance.
TSMC also manufactures our Eclipse products on 0.25 micron CMOS process, and other mature products using a 65nm CMOS process on twelve-inch wafers. We purchase products from GlobalFoundries, and TSMC on a purchase order basis. Outsourcing of commercial wafer manufacturing enables us to take advantage of the high volume economies of scale offered by these suppliers.
TSMC also manufactures our Eclipse products on 0.25 micron CMOS process, and other products using a 65nm CMOS process on twelve-inch wafers. We purchase products from GlobalFoundries and TSMC on a purchase order basis. Outsourcing of commercial wafer manufacturing enables us to take advantage of the high-volume economies of scale offered by these suppliers.
Furthermore, our SRAM reprogrammable silicon platforms can be programmed in-system by our customers, and therefore we do not incur programming cost, lowering the overall cost of ownership to our customers. We expect to continue to invest in silicon solution platforms and manufacturing technologies that make us competitive for the variety of markets and applications that programmable logic serves.
Furthermore, our SRAM reprogrammable silicon platforms can be programmed in-system by our customers, and therefore, we do not incur programming costs, lowering the overall cost of ownership to our customers. We expect to continue to invest in silicon solution platforms and manufacturing technologies that make us competitive for the variety of markets and applications that programmable logic serves.
GlobalFoundries manufactures our EOS S3, EOS S3 LV, and EOS S3AI Sensor Platform in a 40 nm CMOS process, and PolarPro 3E, ArcticLink III VX and BX, and ArcticLink 3 S2 Sensor Hub, in a 65 nm CMOS process. TSMC manufactures our pASIC 3, QuickRAM and certain QuickPCI products, using a 0.35 micron complementary metal oxide semiconductor, ("CMOS"), process.
GlobalFoundries manufactures our EOS S3, EOS S3 LV, and EOS S3AI Sensor Platform in a 40 nm complementary metal oxide semiconductor ("CMOS") process, and PolarPro 3E, ArcticLink III VX and BX, and ArcticLink 3 S2 Sensor Hub, in a 65 nm CMOS process. TSMC manufactures our PASIC 3, QuickRAM and certain QuickPCI products, using a 0.35 nm CMOS process.
Our common stock trades on the Nasdaq under the symbol “QUIK.” Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports are available, free of charge, on our website home page as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission, or SEC.
Our common stock trades on the Nasdaq Capital Market under the symbol “QUIK.” Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to such reports are available, free of charge, on our website home page as soon as reasonably practicable after we electronically file such materials with, or furnish them to, the Securities and Exchange Commission, or the SEC.
SensiML Data Capture Lab is a full-featured client tool that enables rapid, efficient, and collaborative multi-user data collection, cleansing, labeling, and metadata annotation of custom application datasets. SensiML Analytics Studio is a cloud service component that uses labeled datasets to deliver device-optimized firmware for a chosen endpoint product.
SensiML Data Studio (formerly the Data Capture Lab) is a full-featured client tool that enables rapid, efficient, and collaborative multi-user data collection, cleansing, labeling, and metadata annotation of custom application datasets. SensiML Analytics Studio is a cloud service component that uses labeled datasets to deliver device-optimized firmware for a chosen endpoint product.
Faith has served as our President and Chief Executive Officer since June 2016 after having served as Vice President of Worldwide Marketing and Vice President of Worldwide Sales & Marketing between 2008 and 2016. Mr. Faith during the last 25 years has held a variety of managerial and executive leadership positions in engineering, product line management, marketing and sales. Mr.
Faith has served as our President and Chief Executive Officer since June 2016 after having served as Vice President of Worldwide Marketing and Vice President of Worldwide Sales & Marketing between 2008 and 2016. Mr. Faith during the last 26 years has held a variety of managerial and executive leadership positions in engineering, product line management, marketing, and sales. Mr.
We may establish additional commercial foundry relationships as such arrangements become economically useful or technically necessary. In connection with U.S. Governme nt end-user customers, we are required to procure wafer fabrication, package assembly, and testing from sources that maintain Defense Microelectronics Activity accreditation from the U.S. Department of Defense and maintain certain intellectual property security standards.
We may establish additional commercial foundry relationships as such arrangements become economically useful or technically necessary. In connection with U.S. Government end-user customers, we are required to procure wafer fabrication, package assembly, and testing from sources that maintain Defense Microelectronics Activity accreditation from the U.S. Department of Defense and maintain certain intellectual property security standards.
See Note 13 to the consolidated financial statements for additional information. Backlog We do not believe that backlog as of any particular date is indicative of future results. The majority of our quarterly shipments are typically booked during the quarter. Our sales are made primarily pursuant to standard purchase orders issued by OEM customers and distributors.
See Note 14 to the consolidated financial statements for additional information. Backlog We do not believe that backlog as of any particular date is indicative of future results. The majority of our quarterly silicon shipments are typically booked during the quarter. Our silicon sales are made primarily pursuant to standard purchase orders issued by OEM customers and distributors.
In order to grow our revenue from its current level, we depend upon increased revenue from our new products including existing new product platforms and platforms currently in development. We expect our business growth to be driven mainly by our silicon solutions, eFPGA IP and SensiML AI Software.
In order to grow our revenue from its current level, we depend upon increased revenue from our new products, including existing new product platforms and platforms currently in development. We expect our business growth to be driven mainly by eFPGA IP and our silicon solutions.
Nader brings more than 30 years of experience in semiconductors and related industries, including 20 years in senior leadership positions. Prior to joining QuickLogic, Mr.
Nader brings more than 30 years of experience in semiconductors and related industries, including 21 years in senior leadership positions. Prior to joining QuickLogic, Mr.
Government may use or authorize others to use the inventions covered by such patents. Information About Our Executive Officers and Directors Our executive officers are appointed by, and serve at the discretion of, our Board of Directors. There are no family relationships among our directors and officers.
Government may use or authorize others to use the inventions covered by such patents. 10 Table of Contents Information About Our Executive Officers and Directors Our executive officers are appointed by, and serve at the discretion of, our Board of Directors. There are no family relationships among our directors and officers.
SensiML collaborates with several microcontroller and sensors manufacturers to integrate the microcontroller and/or sensor manufacturers’ development kits with SensiML’s Analytics Toolkit in order to showcase combined solutions for AI/ML applications. Currently, these collaborations include Infineon Technologies, On Semiconductor Corp., Microchip Technology Inc., Silicon Laboratories, Inc., STMicroelectronics N.V., Arduino, NXP Semiconductors N.V., Raspberry Pi, and Nordic Semiconductor.
For our AI/ML Software, SensiML collaborates with several microcontroller and sensor manufacturers to integrate the microcontroller and/or sensor manufacturers’ development kits with SensiML’s Analytics Toolkit in order to showcase combined solutions for AI/ML applications. Currently, these collaborations include On Semiconductor Corp., Microchip Technology Inc., Silicon Laboratories, Inc., Arduino, NXP Semiconductors N.V., Raspberry Pi, and Nordic Semiconductor.
Information regarding the backgrounds of our directors is incorporated by reference from our definitive Proxy Statement relating to the 2023 Annual Meeting of Stockholders, which Proxy Statement is anticipated to be filed within 120 days after the end of the Fiscal Year covered by this Report. 10 Table of Contents
Information regarding the backgrounds of our directors is hereby incorporated by reference from our definitive Proxy Statement relating to the 2025 Annual Meeting of Stockholders, which Proxy Statement is anticipated to be filed within 120 days after the end of the Fiscal Year covered by this Annual Report. 11 Table of Contents
Suppliers of programmable logic hardware products, which have lower development and market risks and development costs relative to ASICs, have aggressively reduced the unit cost of their products over time, making programmable logic hardware products the solution of choice for custom products unless the volume is very high.
Suppliers of programmable logic hardware products, which have lower development and market risks and development costs relative to ASICs, have aggressively reduced the unit cost of their products over time, making programmable logic hardware products the solution of choice for custom products unless the volume is very high or the functionality and/or operating environment is unique.
We also have a military, industrial and IoT product customer base that purchases our mature silicon products. We expect to continue to offer silicon hardware products to these customers, as well as new eFPGA IP for when these customers choose to implement their own silicon platform solution.
We also have an Aerospace and Defense, Industrial, and IoT product customer base that purchases our mature silicon products. We expect to continue to offer silicon hardware products to these customers, as well as new eFPGA IP for when these customers choose to implement their own silicon platform solution.
By using our silicon platforms, our IPs, our software, and our in-depth architecture knowledge, we can deliver energy efficient custom solutions that blend the benefits of traditional ASSPs with the flexibility, product proliferation, differentiation and low total cost of ownership advantages of programmable logic.
By using our silicon platforms, our IPs, our software, and our in-depth architecture knowledge, we can deliver energy efficient custom solutions that blend the benefits of traditional ASSPs with the flexibility, product proliferation, differentiation, and low total cost of ownership advantages of programmable logic. Our product technology consists of five major elements: 1.
QuickLogic FPGAs have a loyal following in certain segments of these markets, particularly when instant-on, energy efficiency, high reliability or intellectual property security is important. QuickLogic has also entered into eFPGA-related agreements with customers in the defense market and expects to continue to do so in the future.
QuickLogic FPGAs have a loyal following in certain segments of these markets, particularly when instant-on, energy efficiency, high reliability, or intellectual property security is important. Since 2022, QuickLogic has also entered into multiple, large eFPGA-related contracts with customers in the Aerospace and Defense market and expects to continue to do so in the future.
A solution can be based on our programmable technology, which enables customized designs, low power, flexibility, rapid time-to-market, longer time-in-market and lower total cost of ownership. We are capable of providing complete solutions because of our investment in developing the low power IP and software required to implement specific functions, along with sensor software algorithms optimized for our architecture.
A solution can be based on our programmable technology, which enables customized designs, low power, flexibility, rapid time-to-market, longer time-in-market, and lower total cost of ownership. We are capable of providing complete solutions because of our investment in developing the low power IP and software required to implement specific functions.
We recognize that our markets require a range of solutions, and we intend to work with market leading companies to combine silicon solution platforms, packaging technology, sensor software algorithms, software drivers and firmware, to meet the product proliferation, high bandwidth, time-to-market, time-in-market and form factor requirements of IoT device manufacturers.
We recognize that our markets require a range of solutions, and we intend to work with market-leading companies to combine silicon solution platforms, packaging technology, FPGA User Tools, sensor software algorithms, software drivers, and firmware, to meet the product proliferation, high bandwidth, time-to-market, time-in-market, and form factor requirements of our customers.
The Analytics Toolkit from SensiML Corporation ("SensiML"), our wholly-owned subsidiary, provides an end-to-end Artificial Intelligence / Machine Learning solution with accurate sensor algorithms using AI technology. The full range of platforms, software tools and eFPGA IP enables the practical and efficient adoption of AI, voice and sensor processing across Consumer/Industrial IoT, Consumer Electronics, Military, Aerospace and Defense markets.
The Analytics Toolkit from SensiML Corporation ("SensiML"), our wholly-owned subsidiary, provides an end-to-end Artificial Intelligence / Machine Learning solution with accurate sensor algorithms using AI technology. The full range of products, software tools, and eFPGA IP enables the practical and efficient field programmability for our customers across Aerospace and Defense, Consumer/Industrial IoT, and Consumer Electronics markets.
Our multi-core sensor processing products such as ArcticLink 3 S1, ArcticLink 3 S2, EOS 3, EOS S3 LV, and EOS S3AI accomplish this result with general purpose and targeted cores, which provide an extremely power-efficient approach for real-time multi-modal (vision, motion, voice, location, biometric and environmental) sensor processing independently of the cloud.
Our multi-core sensor processing products such as ArcticLink 3 S1, ArcticLink 3 S2, EOS 3, EOS S3 LV, and EOS S3AI provide an extremely power-efficient approach for real-time multi-modal (vision, motion, voice, location, biometric, and environmental) sensor processing independently of the cloud.
Copies of the materials filed by the Company with the SEC are also available on the SEC’s website at www.sec.gov . A copy of our Code of Conduct and Ethics is posted on our website at https://ir.quicklogic.com/governance-docs. Any changes to or waiver from this Code of Conduct and Ethics will be posted to this page on our website.
Copies of the materials filed by the Company with the SEC are also available on the SEC’s website at www.sec.gov . A copy of our Code of Conduct and Ethics is posted on our website at https://ir.quicklogic.com/governance-docs.
We believe o ur future success depends in part on our continued ability to attract, hire and retain qualified personnel. None of our employees are represented by a labor union and we believe our employee relations are favorable. We recognize that in order to drive innovation and operational excellence, we must attract, develop, motivate and retain highly qualified talent.
None of our employees are represented by a labor union and we believe our employee relations are favorable. We recognize that in order to drive innovation and operational excellence, we must attract, develop, motivate, and retain highly qualified talent.
The following table sets forth certain information concerning our current executive officers and dir ectors as of March 20, 2023: Name Age Position Brian C.
The following table sets forth certain information concerning our current executive officers and directors as of March 25, 2025: Name Age Position Brian C.
Our customers can use our eFPGA IP for hardware acceleration and pre-processing in their own custom semiconductor hardware products, our SoCs to run our customer’s software and build their hardware around, and our discrete FPGAs to implement their custom functionality.
Our customers can use our eFPGA IP for hardware acceleration and pre-processing in their Application Specific Integrated Circuit (ASIC) products, our SoCs to run our customers' software and build their hardware around, and our discrete FPGAs to implement their custom functionality.
Customers typically order our products through our distributor s. Currently, we have seven distributors in North America and a network of twenty-three distributors and sales representative throughout Eu rope and Asia to support our international business. eFPGA IP customers and SensiML SaaS subscribers typically enter into licensing agreements directly with QuickLogic and SensiML, respectively.
Currently, we have fourteen active distributors in North America and a network of nineteen active distributors and sales representatives throughout Eu rope and Asia to support our international business. eFPGA IP customers and SensiML SaaS subscribers typically enter into licensing agreements directly with QuickLogic and SensiML, respectively.
Faith 48 President and Chief Executive Officer; Director Elias Nader 58 Chief Financial Officer and Senior Vice President (SVP) of Finance Rajiv Jain 62 Vice President, Worldwide Operations Timothy Saxe 66 Senior Vice President Engineering and Chief Technology Officer Owen Bateman 56 Vice President, Worldwide Sales Michael R.
Faith 50 President and Chief Executive Officer; Director Elias Nader 60 Chief Financial Officer and Senior Vice President (SVP) of Finance Rajiv Jain 64 Vice President, Worldwide Operations Timothy Saxe 69 Senior Vice President Engineering and Chief Technology Officer Owen Bateman 58 Vice President, Worldwide Sales Andrew Jaros 61 Vice President, Intellectual Property Sales Michael R.
This combination of mixed signal, hard-wired logic and programmable logic enables us to deliver low cost, small form factor solutions that can be customized for particular customer or market requirements while lowering the total cost of ownership. Third, we develop and integrate innovative IP cores, intelligent data processing IP cores, or standard interfaces used in IoT products.
This combination of mixed signal, hard-wired logic, and programmable logic enables us to deliver low cost, small form factor solutions that can be customized for a particular customer or market requirements while lowering the total cost of ownership. 5.
Farese 76 Chairman of the Board Joyce Kim 52 Director Radhika Krishnan 52 Director Andrew J. Pease 72 Director Christine Russell 73 Director Gary H. Tauss 68 Director 9 Table of Contents Brian C. Faith joined QuickLogic in June 1996. Mr.
Farese 78 Chairman of the Board Joyce Kim 54 Director Andrew J. Pease 74 Director Christine Russell 75 Director Gary H. Tauss 70 Director Brian C. Faith joined QuickLogic in June 1996. Mr.
The decision to cease maintaining a patent is made based on the importance of the patent in our current or future product offerings. We have five registered trademarks with the U.S. Patent and Trademark Office. With regard to certain patents, the U.S. Government has an irrevocable, non-exclusive, royalty-free license, pursuant to which the U.S.
We have five registered trademarks with the U.S. Patent and Trademark Office. With regard to certain patents, the U.S. Government has an irrevocable, non-exclusive, royalty-free license, pursuant to which the U.S.
Saxe joined GateField Corp., a design verification tools and services company formerly known as Zycad, in June 1983 and was a founder of their semiconductor manufacturing division in 1993. Dr. Saxe became GateField’s Chief Executive Officer in February 1999 and served in that capacity until Actel Corp. acquired GateField in November 2000. Dr.
Saxe was Vice President of FLASH Engineering at Actel Corp. a semiconductor manufacturing company, from November 2000 to February 2001. Dr. Saxe joined GateField Corp., a design verification tools and services company formerly known as Zycad, in June 1983 and was a founder of their semiconductor manufacturing division in 1993. Dr.
Our R&D expenses were $5.0 million, or 31% of revenue, $6.9 million, or 55% of revenue, and $7.5 million, or 87% of revenue for the years ended January 1, 2023, January 2, 2022 and January 3, 2021, respectively.
Our R&D expenses were $6.5 million, or 33% of revenue, $6.4 million, or 30% of revenue, and $5.0 million, or 31% of revenue for the years ended December 29, 2024, December 31, 2023, and January 1, 2023, respectively.
More recently, there is a general trend in the semiconductor market that enhanced processing capability can come from the adoption of more heterogeneous architectures. Examples of this trend are the inclusion of one or more general purpose processor cores (e.g. Arm or RISC-V) in conjunction with programmable logic.
This could be one or more instances of a single processor type, or only programmable logic. More recently, there is a general trend in the semiconductor market that enhanced processing capability can come from the adoption of more heterogeneous architectures.
We use small form factor packages, which are less expensive to manufacture and include smaller pin counts. Reduced pin counts result in lower costs for our customer’s printed circuit board space and routing.
We typically implement sophisticated logic blocks and mixed signal functions in hard-wired logic because it is very cost-effective and energy efficient. We use small form factor packages, which are less expensive to manufacture and include smaller pin counts. Reduced pin counts result in lower costs for our customers' printed circuit board space and routing.
Fourth, we develop and optimize a software framework for use in conjunction with our sensor processing silicon platforms. Fifth, through SensiML, we develop and optimize an end-to-end software suite that provides developers a practical means for developing IoT sensor algorithms using AI.
Artificial Intelligence / Machine Learning (AI/ML) Software Through our wholly-owned subsidiary company, SensiML, we develop and optimize an end-to-end software suite that provides developers with a practical means for developing IoT sensor algorithms using AI.
Our eFPGA IP are currently developed on 250nm, 130nm, 90nm, 65nm, 40nm, 28nm and 22nm process nodes. The licensable IP is generated by an automated compiler tool, called Australis™, that enables our engineers to create an eFPGA IP for our licensees that they can then integrate into their SoC without significant involvement by QuickLogic.
The licensable IP is generated by our automated compiler tool called Australis™, which enables our engineers to create an eFPGA IP for our licensees that they can then integrate into their SoC without significant involvement by QuickLogic. We believe this flow enables a scalable development and support model for QuickLogic.
Research and Development We are focused on developing our solutions and platforms. Our solutions combine our silicon platforms with our IP, software drivers, and other system software, and may include SensiML software for AI applications.
Our products combine our silicon platforms with our eFPGA IP, FPGA User Tools, software drivers, and other system software, and may include SensiML software for AI applications.
Specifically, we are a fabless semiconductor company that develops a full stack platform for artificial intelligence or AI, voice and sensor processing. The platform is based on our embedded FPGA ("eFPGA") intellectual property ("IP"), low power, multi-core semiconductor system-on-chips ("SoCs"), discrete FPGAs, and AI software.
Specifically, we are a fabless semiconductor company with a variety of products: embedded FPGA ("eFPGA") intellectual property ("IP"), low power, multi-core semiconductor system-on-chips ("SoCs"), discrete FPGAs, and AI software.
We believe our solutions are resonating with our target customers who value the differentiated user experience, lower power consumption, platform design capability, rapid time-to-market, longer time-in-market and low total cost of ownership available through the use of our solutions. 7 Table of Contents We sell our products through a network of sales managers in North America, Europe and Asia.
We intend to continue to define and implement compelling solutions for our target customers and partners. We believe our solutions are resonating with our target customers who value lower power consumption, platform design flexibility, rapid time-to-market, longer time-in-market, and low total cost of ownership available through the use of our solutions.
SensiML provides an AI software platform for products which include Software-as-a-Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services, all of which are also included in the new products revenue category. Our mature products include primarily FPGA families named pASIC®3 and QuickRAM® as well as programming hardware and design software.
In addition to delivering our own semiconductor solutions, our new products category includes our AI/ML Software Platform from our wholly-owned subsidiary company, SensiML, which includes Software as a Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services, all of which are also included in the new products revenue category.
Three customers represented approximately 20%, 16% and 12% of our total revenue for the year ended January 1, 2023 . Three customers represented 16 %, 14%, and 10% of our total revenue f or the year ended January 2, 2022 . In addition, a significant portion of our revenue comes from sales to customers located outside of the United States.
One customer represented approximately 54% of our total revenue for the year ended December 29, 2024 . One customer represented 70% of our total revenue f or the year ended December 31, 2023 . In addition, a noteworthy portion of our revenue comes from sales to customers located outside of the United States.
Historically, the defense market has followed QuickLogic's mature products revenue trend, but recent advancements in QuickLogic's Australis IP generator tool and participation in the DARPA Toolbox, have enabled renewed interest from customers in this area. Consequently, QuickLogic expects these trends to result in higher growth.
Historically, the Defense market has followed QuickLogic’s mature products revenue trend, but recent advancements in QuickLogic’s Australis IP generator tool, the recent Strategic Radiation Hardened FPGA contract for the U.S. Department of Defense, participation in the DARPA Toolbox, and other eFPGA-related contracts with the Defense Industrial Base have enabled renewed interest from customers in this area.
In Europe and Asia, we hold three patents and have two pending applications. Our issued patents expire between 2033 and 2039. I n most cases, revenue will decline from a decrease in demand for our mature products long before the expiration of pending or issued patents relating to the underlying technology in such products.
I n most cases, revenue will decline from a decrease in demand for our mature products long before the expiration of pending or issued patents relating to the underlying technology in such products. The decision to cease maintaining a patent is made based on the importance of the patent in our current or future product offerings.
System designers can customize their products using programmable logic ASICs or MCUs. The competitive dynamic between these classes of core silicon are well understood. High development risks, development costs and opportunity costs are incurred when using ASICs to produce custom hardware products with very low unit production cost.
System designers can customize their products using programmable logic, ASICs, or MCUs. The competitive dynamic between these classes of core silicon is well understood.
Our EOS S3, EOS S3AI and ArcticLink III solution platforms are manufactured on an advanced process node where we can benefit from smaller die sizes. We typically implement sophisticated logic blocks and mixed signal functions in hard-wired logic because it is very cost-effective and energy efficient.
Our EOS S3, EOS S3AI, QuickAI and ArcticLink III silicon platforms combine mixed signal physical functions and hard-wired logic alongside our field programmable logic. Our EOS S3, EOS S3AI, and ArcticLink III solution platforms are manufactured on process nodes where we can benefit from smaller die sizes and lower power consumption.
Marketing, Sales and Customers We monetize our technology through hardware product sales, and eFPGA IP licenses, with any necessary corresponding work delivered via professional engineering services, and SensiML Analytics Toolkit subscriptions and per unit royalties. We specialize in enhancing the user experience in leading edge IoT hardware products.
Lastly, the SensiML Application Programmer’s Interface ("API") is a simplified interface to extend the SensiML algorithms and manage advanced features like edge model tuning and continuous learning updates to the cloud. 8 Table of Contents Marketing, Sales and Customers We monetize our technology through hardware product sales and eFPGA IP licenses, with any necessary corresponding work delivered via professional engineering services, SensiML Analytics Toolkit subscriptions, and per unit royalties.
ITEM 1. BUSINESS General QuickLogic Corporation was founded in 1988 and reincorporated in Delaware in 1999. Our vision is to transform the way people and hardware products interact with each other and their surroundings. Our mission is to provide innovative silicon and software platforms to successfully enable our customers to develop hardware products that fundamentally change the end-user experience.
ITEM 1. BUSINESS General QuickLogic Corporation was founded in 1988 and reincorporated in Delaware in 1999. We provide innovative, programmable silicon and software platforms to enable our customers to develop custom hardware products in a fast time-to-market and cost-effective way.
In addition to our corporate headquarters in San Jose, California, we have international sales operations in China, Japan, Taiwan, and the United Kingdom. Our sales personnel and independent sales representatives are responsible for sales and application support for a given region, focusing on major strategic accounts, and managing our channel sales partners such as distributors.
Our sales personnel and independent sales representatives are responsible for sales and application support for a given region, focusing on major strategic accounts, and managing our channel sales partners, such as distributors. Customers typically order our FPGA products through our distributor s.
Bateman served as QuickLogic’s Senior Director of Sales EMEA and USA from 2013 to 2022, and Strategic Accounts, Direct Sales and Channel Sales from 1997 to 2013. Prior to joining QuickLogic, Mr. Bateman held sales and field application engineering positions at Intel and Abacus Polar. Mr. Bateman has designed with FPGAs and completed several successful FPGAs and custom ASIC designs.
Bateman has served as our Vice President of Worldwide Sales since April 2022. Prior to this role, Mr. Bateman served as QuickLogic’s Senior Director of Sales EMEA and USA from 2013 to 2022, and Strategic Accounts, Direct Sales and Channel Sales from 1997 to 2013. Prior to joining QuickLogic, Mr.
Mr. Bateman holds a Higher National Certificate in Electronic and Microelectronic Engineering from Brooklands College, England. Timothy Saxe (Ph.D.) joined QuickLogic in May 2001. Dr. Saxe has served as our Senior Vice President of Engineering and Chief Technology Officer since August 2016 and Senior Vice President and Chief Technology Officer since November 2008. Previously, Dr.
Saxe has served as our Senior Vice President of Engineering and Chief Technology Officer since August 2016 and Senior Vice President and Chief Technology Officer since November 2008. Previously, Dr. Saxe has held a variety of executive leadership positions in QuickLogic including Vice President of Engineering and Vice President of Software Engineering. Dr.
We outsource wafer manufacturing, package packaging and testing services to certified U.S.-owned and continental U.S.-based suppliers. Employees and Human Capital As of January 1, 2023, w e had forty-five employees worldwide of which forty employees are located in the United States.
We outsource wafer manufacturing, packaging, and testing services to certified U.S.-owned and continental U.S.-based suppliers. Employees and Human Capital As of December 29, 2024, we had fifty-nine employees worldwide, of which fifty-one employees were located in the United States. We believe o ur future success depends in part on our continued ability to attract, hire, and retain qualified personnel.
This type of architecture enables the end user to partition their application workloads across the heterogeneous cores so that the most appropriate core is used for a given workload, often concurrently. Generally, this is viewed as the most optimal way to design systems that need to optimize for performance or battery life. Another important trend is shrinking product life cycles.
Examples of this trend are the inclusion of one or more general purpose processor cores (e.g., Arm or RISC-V) in conjunction with programmable logic. This type of architecture enables the end user to partition their application workloads across the heterogeneous cores so that the most appropriate core is used for a given workload, often concurrently.
Our future success will depend largely on our ability to rapidly develop, enhance and introduce our platform solutions that meet emerging industry standards and satisfy changing customer requirements. We have made and expect to continue to make substantial investments in R&D.
Our future success will depend largely on our ability to rapidly develop, enhance, and port to new foundry and process technology our eFPGA IP solutions, as well as continue to enhance and support our FPGA User Tools to meet emerging industry standards and satisfy changing customer requirements.
Our embedded FPGA technology gives SoC developers targeting IoT endpoint applications the flexibility to make design changes post-production while keeping power consumption low. Our SensiML Analytics Toolkit is cutting-edge software that enables ultra-low power IoT endpoints that implement AI to transform raw sensor data into meaningful insight at the device itself.
Our SensiML Analytics Toolkit is cutting-edge software that enables ultra-low power IoT endpoints that implement AI to transform raw sensor data into meaningful insight at the device itself. The Toolkit also provides an end-to-end development platform spanning data collection, labeling, algorithm and firmware auto generation, and testing.
Therefore, our revenue growth needs to be strong enough to enable us to sustain profitability while we continue to invest in the development, sales and marketing of our new solution platforms, IP and software. 4 Table of Contents Supply Chain Disruptions Global, supply chain constraints have not had a material impact on our business.
Therefore, our revenue growth needs to be strong enough to enable us to sustain profitability while we continue to invest in the development, sale, and marketing of our new solution platforms, IP, and software. Available Information Our corporate headquarters are located at 2220 Lundy Avenue, San Jose, California 95131.
Our product technology consists of five major elements: First, our programmable logic allows us to hardware customize our platforms. We have two distinct types of programmable logic.
Programmable Logic Technology Our programmable logic enables our customers to customize their hardware platforms. We have two distinct types of programmable logic – Reprogrammable and One-Time Programmable ("OTP").
Saxe holds a B.S.E.E. degree from North Carolina State University, and an M.S.E.E. degree and a Ph.D. in Electrical Engineering from Stanford University.
Saxe became GateField’s Chief Executive Officer in February 1999 and served in that capacity until Actel Corp. acquired GateField in November 2000. Dr. Saxe holds a B.S.E.E. degree from North Carolina State University, and an M.S.E.E. degree and a Ph.D. in Electrical Engineering from Stanford University. Owen Bateman joined QuickLogic in February 1997. Mr.
Jain holds a Master’s degree in Chemical Engineering from the University of California, Berkeley and a B.S. degree in Chemical Engineering from the University of Illinois, Champaign/Urbana. Owen Bateman joined QuickLogic in February 1997. Mr. Bateman has served as our Vice President of Worldwide Sales since April 2022. Prior to this role, Mr.
Jain holds a Master’s degree in Chemical Engineering from the University of California, Berkeley and a B.S. degree in Chemical Engineering from the University of Illinois, Champaign/Urbana. Timothy Saxe (Ph.D.) joined QuickLogic in May 2001. Dr.
Intellectual Property We believe that it is important to maintain a large patent portfolio to protect our innovations. We currently hold eighteen active U.S. patents and have five pending applications for an additional U.S. patent. Our patents contain claims covering various aspects of programmable integrated circuits, programmable interconnect structures and programmable metal hardware products.
We believe our compensation philosophy, along with the career growth and development opportunities promotes longer employee tenure and reduces voluntary turnover. Intellectual Property We believe that it is important to maintain a large patent portfolio to protect our innovations. We currently hold twenty-one active U.S. patents and have four pending applications for additional U.S. patents.
(a subsidiary of Microchip Technology Inc.); and (v) suppliers of low power microcontrollers such as STMicroelectronics N.V. and NXP Semiconductors N.V. Our existing competitors for conventional FPGAs include suppliers of low power complex programmable logic devices ("CPLD") and FPGAs such as Lattice Semiconductor Corp., Xilinx Inc. (a subsidiary of Advanced Micro Devices, Inc.), Intel Corp., and Microsemi Corp.
In 2024, Analog Devices acquired the assets and technology of our most noteworthy eFPGA competitor, FlexLogix. Competitors of our low power discrete FPGA devices include suppliers of low-density FPGAs such as Lattice Semiconductor Corp. and Microsemi Corp. (a subsidiary of Microchip Technology Inc.). Competitors for our Aerospace and Defense discrete FPGAs include conventional FPGAs suppliers such as Xilinx Inc.
Hardware customization gives our hardware products the ability to execute key actions faster than software implementations, and at lower power. Second, our ArcticLink and EOS S3, EOS S3 LV, and EOS S3AI platforms combine mixed signal physical functions, hard-wired logic and programmable logic on one device.
We also have multiple silicon platforms that fall under the SoC category - ArcticLink, EOS S3, EOS S3 LV, and EOS S3AI. Our SoC platforms combine mixed signal physical functions, hard-wired logic, and programmable logic on one device.
We believe this flow enables a scalable development and support model for QuickLogic. For our eFPGA strategy, we typically work with semiconductor manufacturing partners prior to this IP being licensed to a SoC company.
For our eFPGA strategy, we typically work with semiconductor manufacturing partners prior to this IP being licensed to a SoC company. We have changed our manufacturing strategies to reduce the cost of our silicon solution platforms to enable their use in a range of unique products ranging from low to high volume.
Our new products include our ArcticPro™, EOS™, QuickAI™, SensiML Analytics Toolkit, ArcticLink® III, PolarPro®3, PolarPro II, PolarPro, and Eclipse II products.
Our new products include the following: eFPGA IP Licensing business, associated professional services, consisting of development and integration of eFPGA technology into custom semiconductor solutions, and our silicon products consisting of EOS™, QuickAI™, ArcticLink® III, PolarPro®3, PolarPro II, PolarPro, and Eclipse II products.
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In addition to delivering our own semiconductor solutions, our new products category includes our IP business that licenses our eFPGA technology for use in other semiconductor companies SoCs and provides professional services, consisting of development and integration of eFPGA technology into bespoke semiconductor solutions.
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Our mature products include primarily FPGA families named PASIC®3 and QuickRAM®, as well as programming hardware and design software. For our IP and silicon platforms, we collaborate with multiple partners on co-marketing and/or co-selling initiatives. These partners could have primary business lines in semiconductor IP, Design Services, semiconductor foundry, semiconductor assembly and test, and others.
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Our solutions typically fall into one of four categories: Hardware products consisting of Sensor Processing, Display Smart Connectivity, and eFPGA intellectual property and its associated Tools. Our solutions include a unique combination of our silicon platforms, IP cores, software drivers, and in some cases, firmware and application software.
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Our eFPGA IP is currently developed on 12nm, 16nm, 22nm, 28nm, 40nm, 65nm, 90nm, 130nm, and 250nm process nodes with a roadmap to more advanced, sub-10nm nodes.
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All of our silicon platforms are standard hardware products and must be programmed to be effective in a system. Through the acquisition of SensiML our core IP also expanded to include the SensiML Analytics Toolkit that enables Original Equipment Manufacturers ("OEMs") to develop AI software for a broad array of resource-constrained time-series sensor endpoint applications.
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Any changes to or waiver from this Code of Conduct and Ethics will be posted to this page on our website. 6 Table of Contents Fiscal Year Our fiscal year ends on the Sunday closest to December 31.
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These include a wide range of consumer and industrial sensing applications. We collaborate with multiple partners on reference designs, and in some cases, co-marketing and/or co-selling initiatives. QuickLogic also works with processor manufacturers, sensor manufacturers, and voice recognition, sensor fusion and context awareness algorithm developers, and embedded systems companies in the development of reference designs.
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References to Fiscal Years 2024, 2023, and 2022 refer to the Fiscal Years ended December 29, 2024 , December 31, 2023 , and January 1, 2023 , respectively. Industry Background Historically, system processing capability was built using a homogenous architecture, meaning one that consisted of the use of only one type of technology.
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Through reference designs that incorporate our solutions, we believe processor manufacturers, sensor manufacturers, and sensor and voice algorithm companies can expand the available market for their respective products.
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Generally, this is viewed as the most optimal way to design systems that need to optimize for performance or battery life. The heterogeneity can be implemented as multiple discrete devices on a Printed Circuit Board (PCB), multiple IP cores in a monolithic device, or as multiple devices (e.g., chiplets) integrated into an advanced package.
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Furthermore, should a solution developed for a processor manufacturer or sensor and/or sensor algorithm company be applicable to a set of common OEMs or Original Design Manufacturers ("ODMs") we can amortize our Research and Development ("R&D") investment over that set of OEMs.
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An important underlying trend for the Aerospace and Defense, and Industrial markets is that there is a need for a high degree of fragmentation of system functionality.
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There may also be cases when platform providers that intend to use always-on voice recognition will dictate certain performance requirements for the combined software/hardware solution before the platform provider certifies and/or qualifies our product for use by end customers.
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This drives a need for a time and cost-efficient product development flow while maintaining the ability to extend the life cycle of a given design through design changes and uniquely optimize designs for new workloads and/or algorithms that need to be deployed (e.g., deploying more advanced AI algorithms in the future).
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We have changed our manufacturing strategies to reduce the cost of our silicon solution platforms to enable their use in high volume, mass customization products. Our EOS S3, EOS S3AI, QuickAI and ArcticLink III silicon platforms combine mixed signal physical functions and hard-wired logic alongside programmable logic.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn order to react quickly to opportunities or to obtain favorable wafer prices, we make significant investments in and commitments to purchase inventories and capital equipment before we have firm commitments from customers. 16 Table of Contents We expect our business growth to be driven by new products, which currently include ArcticPro™, EOS™, QuickAI™, SensiML Analytics Toolkit, ArcticLink® III, PolarPro®3, PolarPro II, PolarPro, Eclipse II products and eFPGA IP licenses and professional services.
Biggest changeWe 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.
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 be materially fluctuate as a result.
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.
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 undersupply of manufacturing capacity, we would have to compete with larger foundry and assembly customers for limited manufacturing resources.
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 addition, data security breaches experienced by us, 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.
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.
Changes to existing accounting pronouncements or taxation rules or practices may cause adverse income fluctuations, affect our reported financial results or how we conduct our business. Generally accepted accounting principles in the United States (“GAAP”) are promulgated by and are subject to the interpretation of the Financial Accounting Standards Board (“FASB”) and the SEC.
Changes to existing accounting pronouncements or taxation rules or practices may cause adverse income fluctuations or affect our reported financial results or how we conduct our business. Generally accepted accounting principles in the United States (“GAAP”) are promulgated by and are subject to the interpretation of the Financial Accounting Standards Board (“FASB”) and the SEC.
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 EOS S3, ArcticLink and PolarPro solution platforms, eFPGA IP and the development of additional new products and solutions.
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 PolarPro solution platforms, and the development of additional new products and solutions.
Newly introduced solutions and products are often more complex and more difficult to produce, increasing the risk of manufacturing related defects. New manufacturing facilities or processes are often more complex and take a period of time to achieve expected quality levels and manufacturing efficiencies.
Newly introduced solutions and products are often more complex and more difficult to produce, increasing the risk of manufacturing-related defects. New manufacturing facilities or processes are often more complex and take a period of time to achieve the expected quality levels and manufacturing efficiencies.
Both our customers and we are subject to laws, regulations and similar requirements that affect our business, results of operations and financial condition, including, but not limited to, the areas of commerce, import and export control, financial disclosures, intellectual property, income and other taxes, anti-trust, anti-corruption, labor, environmental, health and safety.
Both we and our customers are subject to laws, regulations, and similar requirements that affect our business, results of operations, and financial condition, including, but not limited to, the areas of commerce, import and export control, financial disclosures, intellectual property, income and other taxes, anti-trust, anti-corruption, labor, environmental, health, and safety.
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 capacity and costs in response to economic and competitive pressures; (vii) our reliance on subcontract manufacturers for product capacity, yield 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 allocations between our operating expenses and cost of sales .
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 capacity and costs in response to economic and competitive pressures; (vii) our reliance on subcontract manufacturers for product capacity, yield 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 .
Acquisitions, involve many complexities, including, but not limited to, risks associated with the acquired business’ past activities, difficulties in integrating personnel and human resource programs, integrating technology systems and other infrastructures under the Company’s control, unanticipated expenses and liabilities, and the impact on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002.
Acquisitions, involve many complexities, including, but not limited to, risks associated with the acquired business’ past activities, difficulties in integrating personnel and human resource programs, integrating technology systems and other infrastructures under our control, unanticipated expenses and liabilities, and the impact on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002.
Companies that supply ASICs, which may be purchased for a lower price at higher volumes and typically 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.
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 our customers cannot provide us with accurate delivery lead times, we may not be able to deliver product 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 our customers 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.
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 cost to manufacture and test our products. We utilize third-party logistics services, including transportation, warehouse and shipping services.
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. We utilize third-party logistics services, including transportation, warehouse, and shipping services.
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 as what we can provide with our products.
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.
If we are unable to obtain competitive pricing (NRE, royalty) and prompt quality support by our partner, our solution may not be competitive. In addition, if the quality of our partner’s solution does not meet our customer’s requirements, it may delay or prevent the incorporation of our product by the customer.
If we are unable to obtain competitive pricing (NRE, royalty) and prompt quality support from our partner, our solution may not be competitive. In addition, if the quality of our partner’s solution does not meet our customer’s requirements, it may delay or prevent the incorporation of our product by the customer.
Delays in production or delivery of components or raw materials that are part of the Company’s 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.
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.
The software developed by us for eFPGA may be delayed or may not meet the needs of the eFPGA Market. The support required by a customer to incorporate the eFPGA may be much higher than expected which may delay new engagements or lead to high costs.
The software developed by us for eFPGA may be delayed or may not meet the needs of the eFPGA Market. The support required by a customer to incorporate the eFPGA may be much higher than expected which may delay new engagements or lead to higher costs.
If we are unable to license new technologies, 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. 19 Table of Contents We depend upon third parties to fabricate, assemble, test and program our products, and to provide logistics services.
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. 20 Table of Contents We depend upon third parties to fabricate, assemble, test, and program our products, and to provide logistics services.
Customers typically order products with short, requested delivery lead times, and do not provide a commitment to purchase product past the period covered by purchase orders, which may be rescheduled or canceled.
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.
Any problems at these third parties could adversely affect 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.
Any problems with these third parties could adversely affect 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.
Unless such cash flow levels are achieved, in addition to the proceeds that we received during Fiscal 2022 from the sale of our equity securities, and the credit line we may be able to draw down from Heritage Bank of Commerce, 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.
Unless such cash flow levels are achieved, in addition to the proceeds that we received during Fiscal 2024 from the sale of our equity securities, and the credit line we may be able to draw down from Heritage Bank of Commerce, 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.
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 IoP processor manufacturers and companies that supply sensor, storage, networking or graphics components for embedded systems.
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, networking or graphics components for embedded systems.
Our and our collaborators’ and contractors’ failure to fully comply with GDPR, CCPA and other laws could lead to significant fines and require onerous corrective action.
Our company's, collaborators’, and contractors’ failure to fully comply with GDPR, CCPA and other laws could lead to significant fines and require onerous corrective action.
Some vendors offer low power FPGAs that can be adopted by a 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.
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.
We are limited in our ability to increase or decrease our forecasts under such agreements. Other manufacturers supply us with product on a purchase order basis. The allocation of capacity is determined solely by our suppliers, over which we have no direct control.
We are limited in our ability to increase or decrease our forecasts under such agreements. Other manufacturers supply us with products on a purchase order basis. The allocation of capacity is determined solely by our suppliers, over which we have no direct control.
Stock prices for many companies in the technology and emerging growth sectors have experienced wide fluctuations that have often been unrelated to the operating performance of such companies. In the past, securities class action litigation has often been brought against companies following periods of volatility in the market price of its securities.
Stock prices for many companies in the technology and emerging growth sectors have experienced wide fluctuations that have often been unrelated to the operating performance of such companies. In the past, securities class action litigation has often been brought against companies following periods of volatility in the market price of their securities.
Any material decline in available funding or our ability to access our cash, cash equivalents, and liquidity resources could adversely impact our ability to meet our operating expenses, financial and contractual obligations, or result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws.
Any material declines in available funding or our ability to access our cash, cash equivalents, and liquidity resources could adversely impact our ability to meet our operating expenses, financial and contractual obligations, or result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws.
Due to the actions of outside parties, employee error, malfeasance, or otherwise, an authorized party may gain access to our data or our users’ or customers’ data or attack the networks causing denial of service or attempt to hold our data or systems in ransom.
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.
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 materi al adverse impact on our business, results of operations and financial condition.
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.
To the extent any such risks materialize, our business, results of operations and financial condition could be materially adversely affected. 18 Table of Contents We have implemented import and export control procedures to comply with United States regulations but we are still exposed to potential risks from import and export activity.
To the extent any such risks materialize, our business, results of operations, and financial condition could be materially adversely affected. We have implemented import and export control procedures to comply with United States regulations, but we are still exposed to potential risks from import and export activity.
These provisions require companies to undertake due diligence procedures and report on the use of conflict minerals in its products, including products manufactured by third parties.
These provisions require companies to undertake due diligence procedures and report on the use of conflict minerals in their products, including products manufactured by third parties.
Higher than expected costs, or lower than expected volume may have a material adverse effect on our business, results of operations and financial condition. Our products are subject to a lengthy sales cycle and our customers may cancel or change their product plans after we have expended substantial time and resources in the design of their products.
Higher than expected costs, or lower than expected volume may have a material adverse effect on our business, results of operations, and financial condition. 17 Table of Contents Our products are subject to a lengthy sales cycle and our customers may cancel or change their product plans after we have expended substantial time and resources on the design of their products.
ITEM 1A. RISK FACTORS In addition to other information in this Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission, the following risk factors should be carefully considered in evaluating our business as they may have a significant impact on our business, operating results and financial condition.
ITEM 1A. RISK FACTORS 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 results and financial condition.
This could lead to further disruptions or restrictions on the Company’s ability to source, manufacture or distribute its products, including temporary disruptions to the facilities of its contract manufacturers in China, Taiwan, Philippines and Singapore, or the facilities of its suppliers and their contract manufacturers globally.
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.
As a result, we may incur substantially higher manufacturing costs, shortages of inventories or reduced customer demand. Yield fluctuations frequently occur in connection with the manufacture of newly introduced products, with changes in product architecture, with manufacturing at new facilities, on new fabrication processes or in conjunction with new backend manufacturing processes.
As a result, we may incur substantially higher manufacturing costs, shortages of inventories, or reduced customer demand. Yield fluctuations frequently occur in connection with the manufacture of newly introduced products, with changes in product architecture, and with manufacturing at new facilities, on new fabrication processes, or in conjunction with new back-end manufacturing processes.
Negotiating and performing under these arrangements involves significant time and expense, and we cannot assure you 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.
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 assure you that we will meet all the conditions under these arrangements. We may end up with owing various obligations and commitments to third parties related to these arrangements.
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.
If demand for our products or gross margin generated from our products does not meet our expectations or if we are unable to collect amounts due from significant customers, we may be required to write-off inventories, provide for uncollectible accounts receivable or incur charges against long-lived assets, which may have a material adverse effect on our business, results of operations and financial condition.
If demand for our products or gross margin generated from our products does not meet our expectations or if we are unable to collect amounts due from significant customers, we may be required to write off inventories, provide for uncollectible accounts receivable, or incur charges against long-lived assets, which may have a material adverse effect on our business, results of operations, and financial condition. 19 Table of Contents Our revenue from U.S.
If we do not maintain compliance with the listing requirements of the Nasdaq Capital Market, our common stock could be delisted, which could, among other things, reduce the price of our common stock and the levels of liquidity available to our stockholders.
If we do not maintain compliance with the listing requirements of the Nasdaq Capital Market, our common stock could be delisted, which could, among other things, reduce the price of our common stock and the levels of liquidity available to our stockholders. Our common stock is listed on the Nasdaq Capital Market (“Nasdaq”).
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. 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.
Our current FPGA architectures and their performance may not be a good fit for the eFPGA 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.
Although we attempt to limit our liability to end users through disclaimers of special, consequential and indirect damages and similar provisions, we cannot assure you that such limitations of liability will be legally enforceable.
Although we attempt to limit our liability to end users through disclaimers of special, consequential, and indirect damages and similar provisions, we cannot provide assurance that such limitations of liability will be legally enforceable.
If the impact of a pandemic becomes more severe in the locations where the Company, its customers or suppliers conduct business, or the Company experiences more pronounced disruptions in its operations, the Company may experience constrained supply or curtailed demand that may materially adversely impact its business, cash flows and results of operations.
If the impact of a pandemic becomes more severe 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.
Further, the California Privacy Rights Act (“CPRA”), which was recently voted into law by California residents 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.
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.
We may be unable to accurately estimate quarterly revenue, which could adversely affect the trading price of our stock.
Risks Related to Our Common Stock We may be unable to accurately estimate quarterly revenue, which could adversely affect the trading price of our stock.
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-party that either delays or jeopardizes the original intent of the partnering relationship or investment. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
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-party that either delays or jeopardizes the original intent of the partnering relationship or investment. 22 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS Not applicable.
If we fail to adequately forecast demand for our products, our business, the relationship with our customers, our results of operations and financial condition could be materially adversely affected. 17 Table of Contents Our business could be adversely affected by undetected errors or defect in our products.
If we fail to adequately forecast demand for our products, our business, the relationship with our customers, and our results of operations and financial condition could be materially adversely affected. Our business could be adversely affected by undetected errors or defects in our products.
In addition to recent trade tariffs, if U.S. export controls expand to place new restrictions on the exportation of our products or a subset of our products, such controls could have a material adverse effect on our operating results.
If U.S. export controls expand to place new restrictions on the exportation of our products or a subset of our products, such controls could have a material adverse effect on our operating results.
Our Certificate of Incorporation, Bylaws and Delaware law contain provisions that could discourage a takeover that is beneficial to stockholders. Provisions of our Certificate of Incorporation, our Bylaws and Delaware law could have the effect of discouraging takeover attempts that certain stockholders might deem to be in their interest.
Provisions of our certificate of incorporation, our bylaws, and Delaware law could have the effect of discouraging takeover attempts that certain stockholders might deem to be in their interest.
As demonstrated by the 2023 cybersecurity incident, security vulnerabilities may arise from our hardware, software, employees, contractors or policies we have deployed, which may result in external parties gaining access to our networks, datacenters, cloud datacenters, corporate computers, manufacturing systems, and or access to accounts we have at our suppliers, vendors, and customers.
As demonstrated by our January 2023 cybersecurity incident that was previously disclosed, security 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.
As a result, our business, results of operations and financial condition could be materially adversely affected, and we may be required to write-off related inventories and long-lived assets.
As a result, our business, results of operations, and financial condition could be materially adversely affected and we may be required to write off related inventories and long-lived assets. Rising concern of potential export restrictions could materially and adversely affect our business and results of operations.
If we are unable to successfully compete with companies that supply ASSPs, lower power FPGAs, MCUs, ASICs, eFPGA IP, or sensor algorithm software 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, manufacturing and marketing efforts.
If we are unable to successfully compete with companies that supply ASSPs, lower power FPGAs, MCUs, ASICs, eFPGA IP, or sensor algorithm software 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, manufacturing and marketing efforts. 21 Table of Contents We may engage in manufacturing, distribution, or technology agreements that involve numerous risks, including the use of cash, erosion of margins due to royalty obligations or revenue sharing, and diversion of resources.
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.
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. Risks Related to Our Business We have incurred losses in the past years.
The ultimate impact of a pandemic and its potential effects on the Company’s business in its Fiscal Year 2023 depends on many factors that are not within our control.
The ultimate impact of a pandemic and its potential effects on our business depends on many factors that are not within our control.
In addition, if any parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, 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.
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 SEC and the Nasdaq Capital Market have also imposed higher independence standards and certain special requirements on directors of public companies. Accordingly, it may become increasingly difficult to attract and retain qualified outside directors to serve on our board of directors. Our company ’ s global operations are subject to risks and uncertainties.
The SEC and the Nasdaq Capital Market have also imposed higher independence standards and certain special requirements on directors of public companies. Accordingly, it may become increasingly difficult to attract and retain qualified outside directors to serve on our board of directors.
With the recent supply chain shortages and materials price increases, and we anticipate that our average selling prices will fluctuate in future periods, although the timing and amount of these fluctuations cannot be predicted with any certainty.
Historically, the market for our products has been characterized by declining selling prices. With the recent supply chain shortages and materials price increases, we anticipate that our average selling prices will fluctuate in future periods, although the timing and amount of these fluctuations cannot be predicted with any certainty.
This change to existing rules, future changes, if any, or the questioning of current practices may adversely affect our reported financial results, our ability to remain listed on the Nasdaq, or the way we conduct our business and subject us to regulatory inquiries or litigation.
This change to existing rules, future changes, if any, or the questioning of current practices may adversely affect our reported financial results, our ability to remain listed on the Nasdaq Capital Market, or the way we conduct our business and subject us to regulatory inquiries or litigation. We may have increased difficulty attracting and retaining qualified, outside board members.
If we are unable to continue to develop and retain existing executive officers or other key employees or are unsuccessful in attracting new highly-qualified employees, our financial condition, cash flows, and results of operations could be materially and adversely affected. 13 Table of Contents We may have increasing difficulty attracting and retaining qualified outside board members.
If we are unable to continue to develop and retain existing executive officers or other key employees or are unsuccessful in attracting new highly qualified employees, our financial condition, cash flows, and results of operations could be materially and adversely affected.
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 and may in the future lead to market-wide liquidity problems.
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.
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.
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.
If, for example, pandemics were to occur in ways that significantly disrupt the manufacture, shipment, and purchasing of our products or the products of our customers, this may materially negatively impact our operating results and our overall business.
If, for example, pandemics were to occur in ways that significantly disrupt the manufacture, shipment, and purchasing of our products or the products of our customers, this may materially negatively impact our operating results and our overall business. Disruptions to manufacturing and shipping could also constrain our supplies, leading to operational delays, disruptions, and inflationary pressures.
We depend upon partnering with other companies to offer voice, motion, and other solutions into our platform. In addition to working directly with our customers, we partner with other companies that are experts in certain technologies to create more complete solutions.
In addition to working directly with our customers, we partner with other companies that are experts in certain technologies to create more complete solutions.
We expect this high level of customer concentration to reduce as we continue to market our solutions to customers in more fragmented IoT markets as well as Military, Aerospace and Defense customers. As in the past, future demand from these customers may fluctuate significantly from quarter to quarter.
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 this customer may fluctuate significantly from quarter to quarter.
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.
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.
If we are unable to generate sufficient sales from our new products or adequate funds are not available when needed, our liquidity, financial condition and operating results would be materially and adversely affected, and we may not be able to operate our business without significant changes in our operations or at all, Risks Related to Adverse Developments Affecting Financial Institutions Adverse Developments Affecting Financial Institutions, Companies in the Financial Services Industry or the Financial Services Industry Generally, such as Actual Events or Concerns Involving Liquidity, Defaults or Non-Performance, Could Adversely Affect our Operations and Liquidity.
If we are unable to generate sufficient sales from our new products or adequate funds are not available when needed, our liquidity, financial condition, and operating results would be materially and adversely affected, and we may not be able to operate our business without significant changes in our operations, or at all.
Current events, including the Russia-Ukraine military conflict, potential disruption caused by pandemics, the United Kingdom’s recent exit from the European Union, potential changes in immigration policies and tax reform proposals, create a level of uncertainty for multi-national companies.
Current events, including the ongoing conflict in the Middle East, 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.
In addition, our customers may require that we provide them with a certification and our inability to do so may disqualify us as a supplier. We have entered and will continue to enter into strategic licensing and collaborative partnerships and relationships with third parties.
In addition, our customers may require that we provide them with a certification and our inability to do so may disqualify us as a supplier.
Delayed sales or lost customers resulting from these disruptions could adversely affect our financial results, stock price and reputation. 15 Table of Contents 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.
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.
Our future operating results are likely to fluctuate and therefore may fail to meet expectations, which could cause our stock price to decline. Our operating results have varied widely in the past and are likely to do so in the future. In addition, our past operating results may not be an indicator of future operating results.
Our future operating results are likely to fluctuate and therefore, may fail to meet expectations, which could materially adversely affect our business, results of operations, and financial condition. Our operating results have varied widely in the past and are likely to do so in the future.
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.
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. 12 Table of Contents As previously disclosed, we detected a ransomware infection on January 20, 2023 affecting a limited number of IT systems, including systems that contained personal information of our employees.
We anticipate that sales to customers located outside the United States will continue to represent a significant portion of our total revenue in future periods. In addition, most of our domestic customers sell their products outside of North America, thereby indirectly exposing us to risks associated with foreign commerce and economic instability. The Company continues to maintain overseas sales offices.
Many of our products are manufactured outside of the United States at manufacturing facilities operated by our suppliers in Asia and South Asia. In addition, most of our domestic customers sell their products outside of North America, thereby indirectly exposing us to risks associated with foreign commerce and economic instability. We continue to maintain overseas sales offices.
Pandemics, epidemics or other widespread public health problems, such as the ongoing COVID-19 pandemic, could negatively impact our business. Outbreaks have, and could again, result in significant government measures to control the spread of disease, including, among others, restrictions on travel, manufacturing, and the movement of employees.
Outbreaks have, and could again, result in significant government measures to control the spread of disease, including, among others, restrictions on travel, manufacturing, and the movement of employees.
Changes in, and responses to, United States trade policy could reduce the competitiveness of our products and cause our sales and revenues to drop, which could materially and adversely impact our business and results of operations. Exchange rate fluctuations could adversely affect our company ’ s results of operations and financial condition.
Changes in, and responses to, United States trade policy could reduce the competitiveness of our products and cause our sales and revenues to drop, which could materially and adversely impact our business and results of operations. 18 Table of Contents Our business could suffer as a result of tariffs and trade sanctions or similar actions.
This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements, which could cause the market price of our common stock to decline and make it more difficult for us to finance our operations Risks Related to Our Products If we fail to successfully develop, introduce and sell new products and other new solutions or if our design opportunities do not generate the revenue we expect, we may be unable to compete effectively in the future and our future gross margins and operating results will be lower.
Risks Related to Our Products If we fail to successfully develop, introduce, and sell new products and other new solutions or if our design opportunities do not generate the revenue we expect, we may be unable to compete effectively in the future and our future gross margins and operating results will be lower.
In addition, we quote opportunities in anticipation of future cost reductions and may aggressively price products to gain market share.
Some of the markets we are targeting typically have higher volumes and greater price pressure than our traditional business. In addition, we quote opportunities in anticipation of future cost reductions and may aggressively price products to gain market share.
A small number of end-customers represented a significant portion of our total revenue in our Fiscal Year ended January 1, 2023 . During our Fiscal Year ended January 1, 2023 , three customers accounted for 20%, 16% and 12%, respectively, of our total revenue.
A small number of end-customers represented a significant portion of our total revenue in our Fiscal Year ended December 29, 2024. During our Fiscal Year ended December 29, 2024, one customer accounted for 54% of our total revenue.
Any losses or damages incurred by us as a result of a catastrophic event or any other significant uninsured loss could have a material adverse effect on our business. There may be some effects of system outages or data security breaches, which could adversely affect our operations, financial results or reputation.
Any losses or damages incurred by us as a result of a catastrophic event or any other significant uninsured loss could have a material adverse effect on our business. 14 Table of Contents Our insurance may not adequately cover certain risks and, as a result, our financial condition and results may be adversely affected.
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.
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.
We believe our future success depends upon our ability to attract and retain highly competent personnel. Our employees are at-will and not subject to employment contracts.
We may be unable to successfully grow our business if we fail to compete effectively with others to attract and retain our executive officers, and other key management or technical personnel. We believe our future success depends upon our ability to attract and retain highly competent personnel. Our employees are at-will and not subject to employment contracts.
In the future, we may be the subject of similar litigation. Securities litigation could result in substantial costs and divert management’s attention.
In the future, we may be the subject of similar litigation. Securities litigation could result in substantial costs and divert management’s attention. Our certificate of incorporation, our bylaws, and Delaware law contain provisions that could discourage a takeover that is beneficial to stockholders.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our principal administrative, sales, marketing, research and development and final testing facility is located in a building of approximately 24,164 square feet of premises located at 2220 Lundy Avenue, San Jose, California, leased for a duration from April 15, 2019 to April 14, 2024.
Biggest changeITEM 2. PROPERTIES Our principal administrative, sales, marketing, research and development, and final testing facility is located in a building of approximately 24,164 square feet of premises located at 2220 Lundy Avenue, San Jose, California, which is under lease until June 14, 2027.
Our subsidiary, SensiML Corp., occupies a 706 square feet facility space in Beaverton, Oregon, leased for a duration from April 2021 until March 2023. We lease flexible work-space on a monthly basis for sales offices in Shanghai, China; London, England; and Taipei, Taiwan. We also lease sales office space in the Seoul Capital Area, South Korea on a short-term basis.
Our subsidiary, SensiML Corp., occupies a 925 square feet facility space in Beaverton, Oregon, which is under lease until March 31, 2025. We lease flexible workspace on a monthly basis for sales offices in Shanghai, China; London, England; and Taipei, Taiwan. We also lease sales office space in the Seoul Capital Area, South Korea on a short-term basis.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStockholders are cautioned against drawing any conclusions from the data contained therein, as past results are not necessarily indicative of future performance. 12/31/2017 12/30/2018 12/29/2019 1/3/2021 1/2/2022 1/1/2023 QuickLogic Corporation 100.00 43.72 18.80 15.56 20.98 21.10 S&P 500 100.00 95.62 125.72 148.85 191.58 156.89 S&P Semiconductor 100.00 93.62 137.39 197.46 294.91 184.86 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 22 Table of Contents ITEM 6. [RESERVED]
Biggest changeStockholders are cautioned against drawing any conclusions from the data contained therein, as past results are not necessarily indicative of future performance. 12/29/2019 1/3/2021 1/2/2022 1/1/2023 12/31/2023 12/29/2024 QuickLogic Corporation 100.00 82.75 111.57 112.23 302.62 215.28 S&P 500 100.00 118.40 152.39 124.79 157.59 197.02 S&P Semiconductors 100.00 143.73 214.66 134.55 283.10 525.75 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 25 Table of Contents ITEM 6. [RESERVED]
Stock Performance Graph The following graph compares the cumulative total return to stockholders of our common stock from December 31, 2017 to January 1, 2023 to the cumulative total return over such period of (i) the S&P 500 Index and (ii) the S&P Semiconductors Index.
Stock Performance Graph The following graph compares the cumulative total return to stockholders of our common stock from December 29, 2019 to December 29, 2024 to the cumulative total return over such period of (i) the S&P 500 Index and (ii) the S&P Semiconductors Index.
The graph assumes that $100 was invested on December 31, 2017 in QuickLogic’s common stock and in each of the other two indices and the reinvestment of all dividends, if any, through January 1, 2023.
The graph assumes that $100 was invested on December 29, 2019 in QuickLogic’s common stock and in each of the other two indices and the reinvestment of all dividends, if any, through December 29, 2024.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Information O ur common stock is currently traded on the Nasdaq Capital Market under the symbol QUIK.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Information O ur common stock is currently traded on the Nasdaq Capital Market under the symbol QUIK. The closing price of our common stock on the Nasdaq was [$ 5.62] per share on March 21, 2025.
As of March 20, 2023, there were 13,236,478 shares of common stock outstanding that were held of record by 115 stockholders. The actual number of stockholders is greater than this number of holders of record since this number does not include stockholders whose shares are held in trust by other entities.
As of March 21, 2025, there were [15,799,036] shares of common stock outstanding that were held of record by [75] stockholders. The actual number of stockholders is greater than this number of holders of record since this number does not include stockholders whose shares are held in trust by other entities.
Removed
From October 15, 1999, the date of our initial public offering to July 21, 2019, our common stock was traded on the Nasdaq Global Market under the same symbol. The closing price of our common stock on the Nasdaq was $5.06 per share on March 20, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNet Cash from Financing Activities In Fiscal Year 2022, net cash provided by financing activities was $4.5 million, primarily attributable to proceeds from issuance of common stock of $4.9 million, partially offset by $0.5 million in payments related to finance leases.
Biggest changeNet Cash provided by (used in) Financing Activities In Fiscal Year 2024, net cash provided by financing activities was $3.7 million, primarily attributable to proceeds from the issuance of common stock in the amount of $7.1 million, partially offset by $1.4 million in payments related to financing arrangements primarily for tooling related to revenue contracts with customers and $2.0 million in greater payments than borrowings on the Company's revolving line of credit. 34 Table of Contents In Fiscal Year 2023, net cash provided by financing activities was $6.9 million, primarily attributable to an increase in our revolving credit facility in the amount of $5.0 million and proceeds from the issuance of common stock in the amount of $2.5 million, partially offset by $0.7 million in payments related to financing arrangements primarily for tooling related to revenue contracts with customers.
We recognize eFPGA intellectual property revenue from licensing our eFPGA intellectual property to customers and recognize eFPGA-related professional services revenue from the fees associated with custom development and integration of our technology solutions into hardware products. We recognize eFPGA revenue from support and maintenance services for post-implementation customer support ratably over the service term.
We recognize eFPGA intellectual property revenue from licensing our eFPGA intellectual property to customers and recognize eFPGA-related professional services revenue from the fees associated with the custom development and integration of our technology solutions into hardware products. We recognize eFPGA revenue from support and maintenance services for post-implementation customer support ratably over the service term.
Issuance costs related to the September 14, 2022 and the February 9, 2022 offerings were immaterial.
Issuance costs related to the September 14, 2022 and February 9, 2022 offerings were immaterial.
Valuation of Inventories Inventories are stated at the lower of standard cost or net realizable value. Standard cost approximates actual cost on a first-in, first-out basis. We routinely evaluate quantities and values of our inventories in light of current market conditions and market trends and record reserves for quantities in excess of demand and product obsolescence.
Valuation of Inventories Hardware product inventories are stated at the lower of standard cost or net realizable value. Standard cost approximates actual cost on a first-in, first-out basis. We routinely evaluate quantities and values of our inventories in light of current market conditions and trends and record reserves for quantities in excess of demand and for product obsolescence.
We also regularly review the cost of inventories against estimated market value and record a lower of cost or market reserve for inventories that have a cost in excess of estimated market value, which could have a material impact on our gross margin and inventory balances based on additional write-downs to net realizable value or a benefit from inventories previously written down.
We also regularly review the cost of inventories against estimated market value and record a lower of cost or market reserve for inventories that have a cost in excess of estimated market value, which could have a material impact on our hardware product gross margin and hardware product inventory balances based on additional write-downs to net realizable value or a benefit from inventories previously written down.
On August 17, 2022, the Company filed a new Registration Statement on Form S-3 with the SEC to replace a previously expired Registration on Form S-3, under which the Company may sell, from time-to-time common stock, preferred stock, depositary shares, warrants, debt securities, and units, individually or as units comprised of one or more of the other securities or a combination thereof.
On August 17, 2022, we filed a new Registration Statement on Form S-3 with the SEC to replace a previously expired Registration on Form S-3, under which we may sell, from time-to-time common stock, preferred stock, depositary shares, warrants, debt securities, and units, individually or as units comprised of one or more of the other securities or a combination thereof.
Because we rely on independent subcontractors to perform these services, we cannot directly control product delivery schedules, costs or quality levels. Our future success also depends on the financial viability of our independent subcontractors. These subcontract manufacturers produce products for other companies, and we must place orders in advance of expected delivery.
Since we rely on independent subcontractors to perform these services, we cannot directly control product delivery schedules, costs, or quality levels. Our future success also depends on the financial viability of our independent subcontractors. These subcontract manufacturers produce products for other companies and we must place orders in advance of expected delivery.
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 lower gross margin as a percentage of revenue.
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.
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 statem ents.
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.
These costs are recorded in selling, general and administrative expense in the consolidated statements of operations. • We do not dis close the value of unsatisfied performance obligations for (i) contracts with original expected lengths of one year or less or (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for the services performed.
These costs are recorded in selling, general, and administrative expense in the consolidated statements of operations. • We do not disclose the value of unsatisfied performance obligations for (i) contracts with original expected lengths of one year or less or (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for the services performed.
We have experienced net losses in the past years and expect to experience losses in at least some of the fiscal quarters during 2023, as we continue to develop new products, applications and technologies.
We have experienced net losses in the past years and expect to experience losses in at least some of the fiscal quarters during 2025 as we continue to develop new products, applications, and technologies.
Our hardware products have historically had an unusually 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 new product life cycle may be shorter, which could increase the potential for obsolescence.
Our hardware products have historically had an unusually long product life cycle and obsolescence has not been a significant factor in the valuation of inventories. However, as we continue to develop new products, we believe our new product life cycle may be shorter, which could increase the potential for obsolescence.
SaaS and Other Revenue SaaS & Other Revenue is comprised primarily of Software as a Service ("SaaS") revenue, software-related professional services revenue, and royalties from licensing our technology. SaaS revenue is generated when we license our software to customers and allow customers to access the software over a short-term subscription basis.
SaaS and Other Revenue SaaS & Other Revenue is comprised primarily of software as a service ("SaaS") revenue and software-related professional services revenue. SaaS revenue is generated when we license our software to customers and allow customers to access the software over a short-term subscription basis.
After the next twelve months, the Company's cash requirements will depend on many factors, including its level of revenue and gross profit, the market acceptance of its existing and new products, the levels at which it maintains inventories and accounts receivable, costs of securing access to adequate manufacturing capacity, new product development efforts, capital expenditures and the level of our operating expenses.
After the next twelve months, our cash requirements will depend on many factors, including our level of revenue and gross profit, the market acceptance of our existing and new products, the levels at which we maintain inventories and accounts receivable, costs of securing access to adequate manufacturing capacity, new product development efforts, capital expenditures, and the level of our operating expenses.
The evaluation may take into consideration historic usage, expected demand, anticipated sales price, the stage in the product life cycle of our customers’ products, new product development schedules, the effect new products might have on the sale of existing products, product obsolescence, customer design activity, customer concentrations, product merchantability and other factors. Market conditions are subject to change.
The evaluation may take into consideration historic usage, expected demand, anticipated sales price, the stage in the product life cycle of our customers’ products, new product development schedules, the effect new products might have on the sale of existing products, product obsolescence, customer design activity, customer concentrations, and product merchantability, among other factors.
In order to grow our revenue from its current level, we depend upon increased revenue from our new products including existing new product platforms and platforms currently in development. We exp ect our business growth to be driven mainly by our silicon solutions, eFPGA IP and SensiML AI Software.
In order to grow our revenue from its current level, we depend upon increased revenue from our new products, including existing new product platforms and platforms currently in development. We expect our business growth to be driven mainly by eFPGA IP and our silicon solutions.
On September 14, 2022 and February 9, 2022, the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of 487 thousand and 310 thousand shares of common stock, respectively, in registered direct offering direct offerings pursuant to our effective shelf registration statement on Form S-3 (File No. 333-266942 and 333-230352, respectively), resulting in net cash proceeds of approximately $3.2 million and $1.5 million, respectively.
On September 14, 2022 and February 9, 2022, we entered into common stock purchase agreements with certain investors for the sale of an aggregate of 487 thousand and 310 thousand shares of common stock, respectively, in registered direct offerings pursuant to an effective shelf registration statement on Form S-3, resulting in net cash proceeds of approximately $3.2 million and $1.5 million, respectively.
Unless such cash flow levels are achieved, in addition to the $3.2 million and $1.5 million in proceeds that we received in September 2022 and February 2022, respectively, from the sale of our equity securities, and the revolving line of credit we may be able to draw down from Heritage Bank of Commerce, we may need to obtain additional funds through strategic divestiture, or sell debt or equity securities, or some combination thereof, to provide fundin g for our operations.
Unless such cash flow levels are achieved, in addition to the $3.2 million, $3.5 million, and $2.3 million in net proceeds that we received in December 2024 , March 2024, and March 2023, respectively, fro m the sale of our equity securities, and the revolving line of credit we may be able to draw down from Heritage Bank of Commerce, we may need to obtain additional funds through strategic divestiture, or sell debt or equity securities, or some combination thereof, to provide fundin g for our operations.
We elected a practical expedient in which we do not assess whether a contract has a significant financing component since our standard payment terms are less than one year. We allocate the transaction price of customer contracts to each distinct product based on its relative standalone selling price. The majority of our revenue is derived from hardware product sales.
We elected a practical expedient in which we do not assess whether a contract has a significant financing component since our standard payment terms are less than one year. We allocate the transaction price of customer contracts to each distinct product based on its relative SSP.
Credit Agreement On December 21, 2018 , the Company entered into the QuickLogic Corporation Heritage Bank of Commerce Amended and Restated Loan and Security Agreement (the "Loan Agreement") with Heritage Bank which among other things, provided a revolving facility ("Revolving Facility") allowing the Company to draw advances up to $15.0 million.
Credit Agreement On December 21, 2018 , we entered into an Amended and Restated Loan and Security Agreement with Heritage Bank (as amended, the "Loan Agreement") which among other things, provided a revolving facility ("Revolving Facility") allowing us to draw advances up to $15.0 million.
Our research and development ("R&D") expenses consist primarily of personnel, overhead and other costs associated with System on Chip ("SoC") and software development, programmable logic design, AI and eFPGA development. R&D expenses were $5.0 million and $6.9 million in Fiscal Years 2022 and Fiscal 2021, respectively, which represented 31% and 55%, respectively, of revenue for those periods.
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 million and $6.4 million in Fiscal Years 2024 and 2023, respectively, which represented 32% and 30%, respectively, of revenue for those periods.
The licensable IP is generated by a compiler tool that enables licensees to create an eFPGA block that they can integrate into their SoC without significant involvement by QuickLogic. We believe this flow enables a scalable support model for QuickLogic.
The licensable IP is generated by our automated compiler tool called Australis™, which enables our engineers to create an eFPGA IP for our licensees that they can then integrate into their SoC without significant involvement by QuickLogic. We believe this flow enables a scalable development and support model for QuickLogic.
In the case of the input methods, the key factors reviewed by management to estimate costs to complete each contract is the estimated labor days-effort necessary to complete the project, budgeted hours, hourly cost to us, profit margins, and engineering hours at cut-off when projects extend beyond a reporting period.
In the case of the selection of an input method, the key factors reviewed by management to estimate costs to complete each contract include, but are not limited to, the estimated labor days-effort necessary to complete the project, budgeted hours, hourly cost to the company, profit margins, and engineering hours at cut-off when projects extend beyond a reporting period.
Cash balances held at our foreign subsidiaries were approximately $0.2 million and $0.4 million as of January 1, 2023 and January 2, 2022 , respectively. Earnings from our foreign subsidiaries are currently deemed to be indefinitely reinvested.
Cash balances held at our foreign subsidiaries were approximately $0.1 million and $0.1 million as of December 29, 2024 and December 31, 2023 , respectively. Earnings from our foreign subsidiaries are currently deemed to be indefinitely reinvested.
The increase in product revenue was comprised of an increase of $3.9 million in new product revenue partially offset by a decrease of $0.4 million in mature product revenue. New Products Revenue .
The decrease in total revenue was comprised of a decrease of $2.1 million in new product revenue, partially offset by an increase of $1.0 million in mature product revenue. New Products Revenue .
Common Stock Offerings On March 21, 2023, the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of 450,000 shares of our common stock, in a registered direct offering pursuant to our effective shelf registration statement on Form S-3 (File No. 333-266942), resulting in net cash proceeds of approximately $2.3 million.
On March 21, 2023, we entered into common stock purchase agreements with certain investors for the sale of an aggregate of 450 thousand shares of our common stock, in a registered direct offering pursuant to an effective shelf registration statement on Form S-3, resulting in net cash proceeds of approximately $2.3 million. Issuance costs related to the offering were immaterial.
Contract liabilities (deferred revenue) associated with eFPGA-related professional services revenue was $0 and $0.3 million and were included in deferred revenue on the consolidated balance sheets as of January 1, 2023 and January 2, 2022, respectively.
Contract liabilities (deferred revenue) associated with eFPGA-related professional services revenue was $0.4 million and $1.0 million and were included in deferred revenue on the consolidated balance sheets as of December 29, 2024 and December 31, 2023, respectively.
We grant customers the right to access and use software at the outset of the arrangement and throughout the entire term of the arrangement. We recognize SaaS revenue ratably over the license term and software-related professional services revenue as services are provided to the customer.
We grant the customer the right to access and use software at the outset of the arrangement and throughout the entire term of the arrangement. We recognize SaaS revenue ratably over the license term. We recognize revenue from software-related professional services as services are provided to the customer. Other miscellaneous revenue is comprised primarily of royalties from licensing our technology.
In these instances, we may use information such as our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, type of the customer, customer tier, type of the technology used, customer demographics, geographic locations, and other factors.
In these instances, we may use information such as our overall pricing objectives, taking into consideration market conditions and other factors, including the value of its contracts, customer type, customer tier, type of the technology used, customer demographics, and geographic locations, among other factors. We also provide eFPGA-related professional services on a time-and-material basis.
The Company requires substantial cash to fund our business. However, the Company believes that its existing cash and cash equivalents, together with available financial resources from the revolving facility will be sufficient to satisfy our operations and capital expenditures over the next twelve months. The Company's revolving facility will expire in December 2024.
We require substantial cash to fund our business. However, we believe that our existing cash and cash equivalents, together with available financial resources from the revolving facility will be sufficient to satisfy our operations and capital expenditures over the next twelve months. Our revolving facility will expire on December 31, 2025.
Contract assets associated with eFPGA-related professional services revenue was $2.0 million and $0.3 million on the consolidated balance sheets as of January 1, 2023 and January 2, 2022, respectively. Gross Profit.
Contract assets associated with eFPGA-related professional services revenue was $2.7 million and $3.6 million on the consolidated balance sheets as of December 29, 2024 and December 31, 2023, respectively. 31 Table of Contents Gross Profit.
In Fiscal Years 2022 and 2021, the Company capitalized costs associated with internal-use software of approxima tely $0.7 million and $0.5 million, respectively. For Fiscal Years 2022 and 2021, the Company recognized $0.4 million and $0.3 million, respectively in amortiza tion expense of internal-use software in cost of revenues on its consolidated statements of operations.
In Fiscal Years 2024 and 2023, we capitalized costs associated with internal-use software of approxima tely $1.1 million and $1.1 million, respectively. For Fiscal Years 2024 and 2023, we recognized $0.7 million and $0.6 million, respectively in amortiza tion expense of internal-use software in cost of revenues on our consolidated statements of operations.
Purchase obligations that are recorded on the Company's consolidated balance sheets are largely comprised of open purchase order commitments to suppliers and to subcontractors. Our risk associated with these purchase obligations is limited to the termination liability provisions within those contracts, and as such, we do not believe they represent a material liquidity risk to us.
Our risk associated with these purchase obligations is limited to the termination liability provisions within those contracts and as such, we do not believe they represent a material liquidity risk to us. Purchase obligations not recorded on our consolidated balance sheets represent significant future obligations associated with ongoing eFPGA IP revenue contracts.
Net cash used for investing activities in Fiscal Year 2021 was approximately $0.7 million, which was primarily attributable to the capitalization of internal use software of $0.5 million and capital expenditures primarily related to property and equipment of $0.2 million.
Net cash used in investing activities in Fiscal Year 2023 was approximately $6.3 million, which was primarily attributable to capital expenditures primarily related to property and equipment of $5.6 million and the capitalization of internal-use software in the amount of $1.0 million, partially offset by stock-based compensation capitalized to internal-use software in the amount of $0.2 million.
As of January 1, 2023, our interest-bearing debt consisted of $0.9 million outstanding under finance leases and $15.0 million outstanding under our Revolving Facility. Se e Note 6 t o the consolidated financial statements for additional information.
As of December 29, 2024, our interest-bearing debt consisted of $3.1 million outstanding under finance arrangements and $18 million outstanding under our Revolving Facility. Se e Note 7 t o the consolidated financial statements for additional information.
SG&A expenses were $7.6 million and $8.0 million in Fiscal Years 2022 and 2021, respectively, which represented 47% and 63%, respectively, of revenue for those periods.
SG&A expenses were $8.8 million and $8.0 million in Fiscal Years 2024 and 2023, respectively, which represented 44% and 38%, respectively, of revenue for those periods.
The $0.4 million decrease in SG&A expenses in Fiscal Year 2022 as compared to Fiscal Year 2021 was primarily attributable to a reduction in consulting costs, stock-based compensation costs and legal expenses, partially offset by an increase in salaries and accounting and audit expenses . Interest Expense, Gain on Forgiveness of Debt, Interest Income and Other (Expense) Income, net.
The $0.8 million increase in SG&A expenses in Fiscal Year 2024 as compared to Fiscal Year 2023 was primarily attributable to an increase in salaries and stock-based compensation costs, partially offset by a decrease in incentive compensation. Interest Expense and Interest Income and Other (Expense) Income, net.
Mature products include all products produced on semiconductor processes larger than 180 nanometer. 27 Table of Contents Total revenue increased approximately $3.5 million, or 28% in Fiscal Year ended January 1, 2023 as compared to the Fiscal Year ended January 2, 2022 .
Mature products include all products produced on semiconductor processes larger than 180 nanometer. Total revenue decreased approximately $1.1 million, or (5)% in Fiscal Year ended December 29, 2024 as compared to the Fiscal Year ended December 31, 2023 .
Of the $11.7 million in new products revenue, approximately $7.5 million was generated from eFPGA IP revenue, primarily eFPGA-related professional engineering services, as compared to approximately $2.7 million in the Fiscal Year ended January 2, 2022 .
Of the $16.1 million in new products revenue, approximately $13.1 million was generated from eFPGA IP revenue, primarily eFPGA-related professional engineering services, as compared to approximately $16.8 million in the Fiscal Year ended December 31, 2023 .
The table below sets forth the changes in provision for income taxes in the Fiscal Year ended January 1, 2023 compared to the Fiscal Year ended January 2, 2022 (in thousands, except percentage data): Fiscal Years Year-Over-Year Change 2022 2021 Amount Percentage Provision for income taxes $ 98 $ 119 $ (21 ) (18 )% Income tax expense for the Fiscal Year 2022 relates primarily to foreign income tax provision for the Company's India entity.
The table below sets forth the changes in provision for income taxes in the Fiscal Year ended December 29, 2024 compared to the Fiscal Year ended December 31, 2023 (in thousands, except percentage data): Fiscal Years Year-Over-Year Change 2024 2023 Amount Percentage Provision for income taxes $ 3 $ 2 $ 1 50 % Income tax expense for the Fiscal Year 2024 and 2023 relates primarily to foreign income tax provisions.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties including those discussed under Part I, Item 1A, “Risk Factors.” These risks and uncertainties may cause actual results to differ materially from those discussed in the forward-looking statements. Overview We develop low power, multi-core semiconductor platforms and IP for AI, voice and sensor processing.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties including those discussed under Part I, Item 1A, “Risk Factors.” These risks and uncertainties may cause actual results to differ materially from those discussed in the forward-looking statements. Overview QuickLogic Corporation was founded in 1988 and reincorporated in Delaware in 1999.
Income tax expense for the Fiscal Year 2021 relates primarily to foreign income tax provision for the Company's India and UK entities. As of the end of Fiscal Year 2022, our ability to utilize our U.S. deferred tax assets in future periods is uncertain and, accordingly, we have recorded a full valuation allowance against the related U.S. deferred tax assets.
As of the end of Fiscal Year 2024, our ability to utilize our U.S. deferred tax assets in future periods is uncertain and, accordingly, we have recorded a full valuation allowance against the related U.S. deferred tax assets. We will continue to assess the realizability of deferred tax assets in future periods.
We will continue to assess the realizability of deferred tax assets in future periods. Comparison of Fiscal Years 2021 and 2020 For discussion related to the results of operations and changes in financial condition for Fiscal Year 2021 compared to Fiscal Year 2020, please refer to “Part II, Item 7.
Comparison of Fiscal Years 2023 and 2022 For discussion related to the results of operations and changes in financial condition for Fiscal Year 2023 compared to Fiscal Year 2022, please refer to “Part II, Item 7.
We recognize revenue in an amount that reflects the consideration we expect to receive in exchange for those products, which also represents the SSP of our performance obligation. Hardware product transaction prices are fixed.
Transfer of control of hardware products occurs when our performance obligation is satisfied, which typically occurs upon shipment from our manufacturing site or headquarters. We recognize revenue in an amount that reflects the consideration we expect to receive in exchange for those products, which also represents the standalone selling price ("SSP") of our performance obligation. Hardware product prices are fixed.
Non-cash charges primarily consisted of stock-based compensation expense of $2.0 million, depreciation and amortization of long-lived assets and certain definite-lived intangible assets of $0.7 million and write-down of inventories of $0.2 million.
Non-cash charges primarily consisted of stock-based compensation expense of $2.5 million, depreciation and amortization of long-lived assets and certain definite-lived intangible assets of $2.2 million, and write-down of inventories of $0.6 million. Non-cash charges were partially offset by a net loss of $0.1 million and changes in working capital of $0.3 million.
The table below sets forth the changes in revenue for Fiscal Year ended January 1, 2023, compared to Fiscal Year ended January 2, 2022 (in thousands, except percentage data): Fiscal Years 2022 2021 Year-Over-Year Change Amount % of Total Revenues Amount % of Total Revenues Amount Percentage New products $ 11,675 72 % $ 7,761 61 % $ 3,914 50 % Mature products 4,505 28 % 4,924 39 % (419 ) (9 )% Total revenue $ 16,180 100 % $ 12,685 100 % $ 3,495 28 % New products revenue consists of revenues from the sale of hardware products manufactured on 180 nanometer or smaller semiconductor processes, eFPGA IP license, professional services, QuickAI and SensiML AI software as a service (SaaS) revenues.
The table below sets forth the changes in revenue for Fiscal Year ended December 29, 2024, compared to Fiscal Year ended December 31, 2023 (in thousands, except percentage data): Fiscal Years 2024 2023 Year-Over-Year Change Amount % of Total Revenues Amount % of Total Revenues Amount Percentage New products $ 16,128 80 % $ 18,211 86 % $ (2,083 ) (11 )% Mature products 3,984 20 % 2,987 14 % 997 33 % Total revenue $ 20,112 100 % $ 21,198 100 % $ (1,086 ) (5 )% New products revenue consists of revenues from the sale of hardware products manufactured on 180 nanometer or smaller semiconductor processes, eFPGA IP license, professional services, QuickAI, and SensiML AI software as a service (SaaS) revenues.
As part of its assessment of each contract, we evaluate certain factors including the customer’s ability to pay, or credit risk. The following is a description our revenue recognition policy by principal activity: Hardware Product Revenue We generate revenue by supplying standard hardware products, which must be programmed before they can be used in an application.
The following is a description of our revenue recognition policy by principal activity: Hardware Product Revenue We generate revenue by supplying standard hardware products, which must be programmed before they can be used in an application. Standard hardware products may be programmed by us, distributors, end customers, or third parties.
We do meaningful work with a global impact. 24 Table of Contents Critical Accounting Policies The methods, 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.
We are committed to our customers to provide the support they need to continue providing vital services and tools. 27 Table of Contents Critical Accounting Policies and Estimates The methods, 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.
Renewals of support and maintenance contracts create new performance obligations which we recognize as revenue ratably over the service term. eFPGA IP contracts with customers often include promises to transfer multiple goods and services to a customer.
Renewals of support and maintenance contracts create new performance obligations for which we recognize as revenue ratably over the service term.
Our contracts with customers containing variable consideration are generally sales based royalties, which is fully constrained. • Allocation of the transaction price to the performance obligations in the contract, and • Recognition of revenue when, or as, we satisfy a performance obligation.
We estimate the transaction price based on the amount expected to be received for transferring the performance obligations in the contract, which may include both fixed consideration and variable consideration. Our contracts with customers containing variable consideration are generally sales-based royalties, which is fully constrained. 4. Allocation of the transaction price to the performance obligations in the contract, and 5.
Standard hardware products may be programmed by us, distributors, end-customers or third parties. Contracts with customers for hardware products generally do not include other performance obligations such as services, extended warranties or other material rights. O ur promise to transfer hardware products is identified as a distinct performance obligation.
Contracts with customers for hardware products generally do not include other performance obligations such as services, extended warranties, or other material rights. Our promise to transfer hardware products is identified as a distinct performance obligation. We recognize revenue on hardware products when we transfer control of the promised products to the customer.
The Company also has the ability to draw advances from its revolving facility with Heritage Bank of Commerce ("Heritage Bank"). As of January 1, 2023, the Company's principal sources of liquidity consisted of cash, cash equivalents and restricted cash of $19.2 million, inclusive of $15.0 million in advances from its revolving facility.
We also have the ability to draw advances from our revolving facility with Heritage Bank of Commerce ("Heritage Bank"). As of December 29, 2024, our principal sources of liquidity consisted of cash, cash equivalents, and restricted cash of $21.9 million, inclusive of $18 million in advances from our $20 million revolving facility.
We recognize royalty revenue on the later of (i) the subsequent sale or usage, or (ii) satisfaction of a performance obligation to which some or all of the sales-based royalty has been allocated We recognized SaaS and Other Revenue of approxim ately $0.4 million , or 2% of total revenue, $0.2 million, or 1% of total revenue, and $0.2 million, or 2% of total revenue, in the Fiscal Years ended January 1, 2023, January 2, 2022, and January 3, 2021, respectively.
We recognize royalty revenue on the later of (i) the subsequent sale or usage, or (ii) satisfaction of a performance obligation to which some or all of the sales-based royalty has been allocated.
Net Cash from Investing Activities Net cash used for investing activities in Fiscal Year 2022 was approximately $0.8 million, which was primarily attributable to the capitalization of internal use software of $0.7 million, and capital expenditures primarily related to property and equipment of $0.1 million.
Net Cash provided by (used in) Investing Activities Net cash used in investing activities in Fiscal Year 2024 was approximately $6.5 million, which was primarily attributable to capital expenditures related to property and equipment of $5.4 million, $0.1 million in expenditures related to intangible assets, and the capitalization of internal-use software in the amount of $1.1 million, partially offset by stock-based compensation capitalized to property and equipment and internal-use software in the amount of $9 thousand and $149 thousand, respectively.
SensiML provides an AI software platform for products that include Software-as-a-Service ("SaaS") subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services, all of which are also included in the new products revenue category. Our mature products include primarily FPGA families named pASIC®3 and QuickRAM® as well as programming hardware and design software.
In addition to delivering our own semiconductor solutions, our new products category includes our AI/ML Software Platform from our wholly-owned subsidiary company, SensiML, which includes Software as a Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services, all of which are also included in the new products revenue category.
Practical Expedients and Exemptions • Taxes collected from customers and remitted to government authorities and that are related to the sales of our products are excluded from revenues. • Sales commissions are expensed when incurred because the amortization period would have been one year or less.
We recognized SaaS and Other Revenue of approxim ately $0.9 million , or 4% of total revenue, $0.4 million, or 2% of total revenue, and $0.6 million, or 3% of total revenue, in the Fiscal Years ended December 29, 2024, December 31, 2023, and January 1, 2023, respectively. 29 Table of Contents Practical Expedients, Elections, and Exemptions • Taxes collected from customers and remitted to government authorities and that are related to the sales of our products are excluded from revenues. • Sales commissions are expensed when incurred because the amortization period would have been one year or less.
In instances where the SSP is not directly observable because we do not sell the promised goods or services separately, we determine the SSP using information that may include market conditions and other observable inputs. We typically have more than one SSP for individual performance obligations due to the stratification of those items by classes of customers and circumstances.
In other instances, we may have more than one SSP for individual performance obligations due to the stratification of those items by classes of customers and circumstances.
We were in compliance with all loan covenants under the Loan Agreement, as amended as of the end of the current reporting period. Heritage Bank has a first priority security interest in substantially all of the Company’s tangible and intangible assets to secure any outstanding amounts under the Loan Agreement.
Heritage Bank has a first-priority security interest in substantially all of the company’s tangible and intangible assets to secure any outstanding amounts under the Loan Agreement. Se e Note 7 to the consolidated fi nancial statements for additional information.
In addition, changes in working capital accounts provided cash of $3.1 million as a result of decreases in accounts receivable $0.3 million, inventory of $0.4 million and other assets of $0.4 million, and increases in accounts payable of $0.4 million and accrued liabilities of $0.3 million, partially offset by cash inflow from a decrease in deferred revenue of $0.4 million.
Changes in working capital consisted of an increase in contract assets of $1.6 million, an increase in other assets of $1.2 million, and a decrease in lease liabilities of $0.4 million, partially offset by a decrease in accounts receivable of $1.0 million, an increase in accrued liabilities of $1.0 million, and an increase in deferred revenue of $0.8 million.
Mature products revenue for the Fiscal Year ended January 1, 2023 was $4.5 million, a 9% decrease compared to the Fiscal Year ended January 2, 2022 .
New products revenue for the Fiscal Year ended December 29, 2024 was $16.1 million, a decrease of $2.1 million as compared to the Fiscal Year ended December 31, 2023 .
We reported a net loss of $4.3 million for the Fiscal Year ended January 1, 2023 compared to a net loss of $6.6 million as compared to the Fiscal Year ended January 2, 2022 .
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 .
Purchase obligations not recorded on the Company’s consolidated balance sheets represent significant future obligations from eFPGA IP procurement contracts forecasted to meet our extended planning horizon. These obligations are dependent on numerous variables, and are therefore, difficult to predict the amount and timing of payments which could differ materially from our estimates.
These obligations are dependent on numerous variables and therefore, it is difficult to predict the amount and timing of payments which could differ materially from our estimates.
Our cash flows were as follows (in thousands): Fiscal Year 2022 2021 2020 Net cash used in operating activities $ (4,056 ) $ (2,859 ) $ (11,594 ) Net cash used in investing activities (814 ) (718 ) (921 ) Net cash provided by financing activities 4,466 434 7,600 Net Cash from Operating Activities In Fiscal Year 2022, net cash used in operating activities was $4.1 million, which was primarily due to a net loss of $4.3 million, adjusted for non-cash charges of $3.0 million.
Our cash flows were as follows (in thousands): Fiscal Year 2024 2023 2022 Net cash provided by (used in) operating activities $ 27 $ 4,847 $ (4,056 ) Net cash provided by (used in) investing activities (6,465 ) (6,339 ) (814 ) Net cash provided by (used in) financing activities 3,712 6,897 4,466 Net Cash provided by (used in) Operating Activities In Fiscal Year 2024, net cash provided by operating activities was $27 thousand, which was primarily due to non-cash charges of $8.6 million.
The increase in eFPGA IP revenue was comprised of $5.9 million in eFPGA-related professional services revenue, partially offset by $1.0 million in eFPGA revenue on the sale of intellectual property licenses during the prior Fiscal Year. SaaS & Other revenue increased approximately $0.2 million, or 103% as compared to the Fiscal Year ended January 2, 2022.
The decrease in eFPGA IP revenue was primarily comprised of a $3.5 million decrease in eFPGA-related professional services revenue. SaaS & Other revenue increased approximately $0.3 million, or 225% as compared to the Fiscal Year ended December 31, 2023. The increase in SaaS & Other revenue was driven by a $0.3 million increase in SaaS IP revenue.
Results of Operations The following table sets forth the percentage of revenue for certain items in our statements of operations for the periods indicated: Fiscal Years 2022 2021 2020 Statements of Operations: Revenue 100 % 100 % 100 % Cost of revenue 46 % 42 % 51 % Gross profit 54 % 58 % 49 % Operating expenses: Research and development 31 % 55 % 87 % Selling, general and administrative 46 % 63 % 79 % Restructuring costs — % — % 9 % Loss from operations (23 )% (59 )% (126 )% Interest expense (1 )% (1 )% (4 )% Gain on forgiveness of PPP Loan — % 9 % — % Interest income and other (expense) income, net (2 )% — % 1 % Loss before income taxes (26 )% (51 )% (129 )% Provision for income taxes — % 1 % 1 % Net loss (26 )% (52 )% (130 )% Co mparison of Fiscal Years 2022 and 2021 Revenue .
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. 30 Table of Contents Results of Operations The following table sets forth the percentage of revenue for certain items in our statements of operations for the periods indicated: Fiscal Years 2024 2023 2022 Statements of Operations: Revenue 100 % 100 % 100 % Cost of revenue 41 % 32 % 46 % Gross profit 59 % 68 % 54 % Operating expenses: Research and development 32 % 30 % 31 % Selling, general and administrative 44 % 38 % 46 % Operating income (loss) (17 )% — % (23 )% Interest expense (2 )% (1 )% (1 )% Interest income and other (expense) income, net — % (1 )% (2 )% Income (loss) before income taxes (19 )% (2 )% (26 )% Provision for income taxes — % — % — % Net income (loss) (19 )% (2 )% (26 )% Co mparison of Fiscal Years 2024 and 2023 Revenue .
We embrace remote work and enable our employees to do their best work from anywhere in the United States allowing them to balance their work obligations with their personal lives. We are committed to our customers to provide the support they need to continue providing vital services and tools.
Many of our personnel work from home except a few personnel required for minimum operations. We embrace remote work and enable our employees to do their best work from anywhere in the United States, allowing them to balance their work obligations with their personal lives.
In addition, changes in working capital accounts used cash of $2.7 million that resulted from an increased use of cash as reflected by increases of $1.7 million each in accounts receivable and in contract assets, inventory of $0.6 million, other assets of $0.3 million, and a reduction in deferred revenue of $0.2 million, partially offset by an increase in accounts payable of $1.9 million.
Changes in working capital consisted of a decrease in trades payable of $3.6 million, a decrease in accrued liabilities of $1.1 million, an increase in accounts receivable of $0.8 million, a decrease in deferred revenue of $0.6 million, and a decrease in lease liabilities of $0.3 million, partially offset by a decrease in contract assets of $0.9 million, a decrease in other assets of $0.6 million, and a decrease in inventories of $0.3 million.
The Company continues to experience increased material and logistics costs and impacts from the worldwide semiconductor supply shortage. The semiconductor supply shortage is due, in part, to increased demand across multiple industries resulting in a slowdown in production schedules.
Such additional funding may not be available on commercially reasonable terms, or at all. Impact of Supply Chain Disruptions on Business 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 industries resulting in a slowdown in production schedules.
The table below sets forth the changes in interest expense, gain on forgiveness of debt, interest income and other (expense) income, net, for the Fiscal Year ended January 1, 2023, as compared to Fiscal Year ended January 2, 2022 (in thousands, except percentage data): Fiscal Years Year-Over-Year Change 2022 2021 Amount Percentage Interest expense $ (148 ) $ (130 ) $ (18 ) 14 % Gain on forgiveness of debt — 1,192 (1,192 ) (100 )% Interest income and other (expense) income, net (221 ) (43 ) (178 ) 414 % Total interest expense, gain on forgiveness of debt, and interest income and other (expense) income, net $ (369 ) $ 1,019 $ (1,388 ) (136 )% Interest expense relates primarily to our line of credit facility.
The table below sets forth the changes in interest expense and interest income and other (expense) income, net, for the Fiscal Year ended December 29, 2024, as compared to Fiscal Year ended December 31, 2023 (in thousands, except percentage data): Fiscal Years Year-Over-Year Change 2024 2023 Amount Percentage Interest expense $ (406 ) $ (215 ) $ 191 89 % Interest income and other (expense) income, net $ (1 ) $ (116 ) (115 ) (99 )% Total interest expense and interest income and other (expense) income, net $ (407 ) $ (331 ) $ 76 23 % Interest expense relates primarily to our line of credit facility.
Our employees and customers Quicklogic nurtures a culture of highly talented teams of employees operating in a committed, execution-oriented, and globally collaborative environment. We are close-knit, family-oriented team welcomes and encourages all perspectives and ideas to improve and innovate in our space, providing exciting career opportunities for the future of technology.
Our close-knit, family-oriented team welcomes and encourages all perspectives and ideas to improve and innovate in our space, providing exciting career opportunities for the future of technology. Collaboration is deeply ingrained in how we work with each other and our customers. We offer competitive compensation and benefits.
See Note 6 to the consolidated financial statements for additional information. 30 Table of Contents Cash Flows As of January 1, 2023, most of our cash and cash equivalents were invested in a Heritage Bank Money Market account.
Our registration statement became effective on August 26, 2022. See N ote 11 to the consolid ated financial statements for additional information. Cash Flows As of December 29, 2024, most of our cash and cash equivalents were invested in a Heritage Bank money market account.
In order to satisfy the Company's longer-term liquidity requirements, it may be required to raise additional equity or debt financing.
In order to satisfy our longer-term liquidity requirements, we may be required to raise additional equity or debt financing. There can be no assurance that financing will be available at commercially acceptable terms or at all.
The table below sets forth the changes in new products revenue for Fiscal Year ended January 1, 2023 , compared to Fiscal Year ended January 2, 2022 (in thousands, except percentage data): Fiscal Years 2022 2021 Year-Over-Year Change Amount % of Total Revenues Amount % of Total Revenues Amount Percentage Hardware products $ 3,757 23 % $ 4,903 39 % $ (1,146 ) (23 )% eFPGA IP 7,545 47 % 2,674 21 % 4,871 182 % SaaS & Other 373 2 % 184 1 % 189 103 % Total new products revenue $ 11,675 72 % $ 7,761 61 % $ 3,914 50 % The increase in new product revenue was primarily driven by eFPGA IP revenue and also SaaS & Other revenue, partially offset by a decrease in new hardware product revenue. eFPGA IP revenue is primarily comprised of eFPGA intellectual property license revenue and eFPGA-related professional services revenue. eFPGA IP revenue increased approximately $4.9 million, or 182%, as compared to the Fiscal Year ended January 2, 2022 .
The table below sets forth the changes in new products revenue for Fiscal Year ended December 29, 2024 , compared to Fiscal Year ended December 31, 2023 (in thousands, except percentage data): Fiscal Years 2024 2023 Year-Over-Year Change Amount % of Total Revenues Amount % of Total Revenues Amount Percentage Hardware products $ 2,547 13 % $ 1,230 6 % $ 1,317 107 % eFPGA IP 13,120 65 % 16,839 79 % (3,719 ) (22 )% SaaS & Other 461 2 % 142 1 % 319 225 % Total new products revenue $ 16,128 80 % $ 18,211 86 % $ (2,083 ) (11 )% 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 million, or (22)%, as compared to the Fiscal Year ended December 31, 2023 .
Revenue Recognition We earn revenue from our activities delivering standard hardware products, professional engineering services, and software as a service to our customers. We apply a five-step model for recognizing revenue: • Identification of the contract, or contracts, with a customer, • Identification of the performance obligations in the contract, • Determination of the transaction price.
In accordance with ASC 606, we apply a five-step model for recognizing revenue: 1. Identification of the contract, or contracts, with a customer, 2. Identification of the performance obligations in the contract, 3. Determination of the transaction price.
There can be no assurance that financing will be available at commercially acceptable terms or at all. 31 Table of Contents Material Cash Requirements Material cash requirements from known contractual obligations and other obligations and the effect such obligations are expected to have on the Company's liquidity and cash flows in future fiscal periods.
Material Cash Requirements The following discussion describes the material cash requirements from known contractual obligations and other obligations, and the effect such obligations are expected to have on our liquidity and cash flows in future fiscal periods.
In Fiscal Year 2021, net cash used in operating activities was $2.9 million, which was primarily due to a net loss of $6.6 million, adjusted for non-cash charges of $2.2 million. Non-cash charges primarily consisted of stock-based compensation expense of $2.5 million and depreciation and amortization of long-lived assets and certain definite-lived intangible assets of $0.6 million.
Non-cash charges primarily consisted of stock-based compensation expense of $4.6 million, depreciation and amortization of long-lived assets and certain definite-lived intangible assets of $3.9 million, and write-down of inventories of $0.1 million. Non-cash charges were partially offset by a net loss of $3.8 million and changes in working capital of $4.7 million.
The table below sets forth the changes in operating expenses for Fiscal Year ended January 1, 2023 compared to Fiscal Year ended January 2, 2022 (in thousands, except percentage data): Fiscal Years 2022 2021 Year-Over-Year Change Amount % of Total Revenues Amount % of Total Revenues Amount Percentage Research and development $ 5,001 31 % $ 6,927 55 % $ (1,926 ) (28 )% Selling, general and administrative 7,601 47 % 8,008 63 % (407 ) (5 )% Total operating expenses $ 12,602 78 % $ 14,935 118 % $ (2,333 ) (16 )% Research and Development Expenses.
The table below sets forth the changes in operating expenses for Fiscal Year ended December 29, 2024 compared to Fiscal Year ended December 31, 2023 (in thousands, except percentage data): Fiscal Years 2024 2023 Year-Over-Year Change Amount % of Total Revenues Amount % of Total Revenues Amount Percentage Research and development $ 6,544 32 % $ 6,448 30 % $ 96 1 % Selling, general and administrative 8,773 44 % 7,969 38 % 804 10 % Total operating expenses $ 15,317 75 % $ 14,417 68 % $ 900 6 % Research and Development Expenses.
Generally, we provide eFPGA-related professional services to customers based on unique contractual arrangement terms and conditions and unique deliverables in conjunction with other performance obligations. As such, we are required to estimate the SSP for each performance obligation.
We allocate the transaction price of the contract to each performance obligation based on its relative SSP. We rarely sell eFPGA intellectual property licenses on a standalone basis. Generally, we will provide eFPGA-related professional services and support and maintenance services to customers in conjunction with eFPGA IP licenses based on unique contractual arrangement terms and conditions.
The increase in revenue was driven by a $3.9 million increase in new products revenue, partially offset by a $0.4 million decrease in mature products rev enue.
The decrease in revenue was driven by a $2.1 million decrease in new product revenue, primarily due to reductions in eFPGA IP professional services revenue, partially offset by a $1.0 million increase in mature product rev enu e.
Therefore, our revenue growth needs to be strong enough to enable us to sustain profitability while we continue to invest in the development, sales and marketing of our new solution platforms, IP and software. We are expecting revenue growth from EOS S3, SensiML AI SaaS, and eFPGA IP license in Fiscal Year 2023.
Therefore, our revenue growth needs to be strong enough to enable us to sustain profitability while we continue to invest in the development, sale, and marketing of our new solution platforms, IP, and software. We market our programmable logic (FPGAs and eFPGA IP) solutions primarily to Defense Industrial Base contractors, U.S. Government entities, System OEMs, and fabless semiconductor companies.

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