UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~October~~July 3, ~~2021~~2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From To

COMMISSION FILE NUMBER: 000-22671

QUICKLOGIC CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

77-0188504

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2220 Lundy Avenue, San Jose, CA 95131-1816

(Address of principal executive offices including zip code))

(408) 990-4000

(Registrant's telephone number, including area code)

Securities registered pursuant Section 12(b) of the act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.001 per share	QUIK	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated Filer	☐
Non-accelerated filer	☒	Smaller Reporting Company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act). Yes ☐ No ☒

As of ~~November 11,2021,~~ August 12, 2022, there were ~~11,795,647~~12,591,225 shares of registrant’s common stock, par value $0.001 per share, outstanding.

Table of Contents

QUICKLOGIC CORPORATION

FORM 10-Q

~~October~~July 3, ~~2021~~2022

TABLE OF CONTENTS

		Page
Part I - Financial Information		3

Item 1.	Unaudited Condensed Consolidated Financial Statements	3

	Consolidated Balance Sheets	3

	Consolidated Statements of Operations	4

	Consolidated Statements of Cash Flows	5

	Consolidated Statements of Changes in Stockholders’ Equity	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2115

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3324

Item 4.	Controls and Procedures	3324

Part II - Other Information		3424

Item 1.	Legal Proceedings	3424

Item 1A.	Risk Factors	3424

Item 2.3.	~~Unregistered Sales of Equity~~Defaults Upon Senior Securities ~~and Use of Proceeds~~	3424

Item 6.	Exhibits	3524

Signatures		3625

Table of Contents

PART I. Financial Information

Item 1. Financial Statements

QUICKLOGIC CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value amount)

	*October 3,*			*January 3,*			*July 3,*			*January 2,*
	*2021*			*2021*			*2022*			*2022*
ASSETS
Current assets:
Cash, cash equivalents and restricted cash	$	19,581		$	22,748		$	18,546		$	19,605
Accounts receivable, net of allowances for doubtful accounts of $62 and $0, respectively		2,012			1,688
Accounts receivable, net of allowances for doubtful accounts of $62								3,560			1,294
Inventories		2,182			2,688			2,212			2,078
Other current assets		1,157			1,066			1,201			1,181
Total current assets		24,932			28,190			25,519			24,158
Property and equipment, net		542			548			607			499
Capitalized internal-use software, net		1,191			986			1,343			1,241
Right of use assets		1,722			1,839			1,141			1,529
Intangible assets		779			860			699			752
Goodwill		185			185			185			185
Investment in privately-held non-affiliate								300			300
Other assets		279			280			195			309
TOTAL ASSETS	$	29,630		$	32,888		$	29,989		$	28,973

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit	$	15,000		$	15,000		$	15,000		$	15,000
Trade payables		1,376			935			1,898			934
Accrued liabilities		1,591			1,340			1,652			1,665
Deferred revenue		94			52			142			455
Lease liabilities, current		803			685			705			819
Total current liabilities		18,864			18,012			19,397			18,873
Long-term liabilities:
Notes payable, non-current		0			1,192
Lease liabilities, non-current		993			1,197			482			744
Other liabilities, non-current		167			0			125			147
Total liabilities		20,024			20,401			20,004			19,764
Commitments and contingencies (see Note 11)
Commitments and contingencies (see Note 10)								—			—
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000 shares authorized; no shares issued and outstanding		0			0
Common stock, $0.001 par value; 200,000 authorized; 11,790 and 11,094 shares issued and outstanding as of October 3, 2021 and January 3, 2021, respectively		12			11
Preferred stock, $0.001 par value; 10,000 shares authorized; no shares issued and outstanding								0			0
Common stock, $0.001 par value; 200,000 authorized; 12,428 and 11,863 shares issued and outstanding as of July 3, 2022 and January 2, 2022, respectively								12			12
Additional paid-in capital		309,036			306,885			312,686			310,222
Accumulated deficit		(299,442	)		(294,409	)		(302,713	)		(301,025	)
Total stockholders' equity		9,606			12,487			9,985			9,209
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	29,630		$	32,888		$	29,989		$	28,973

See accompanying ~~Notes~~notes to ~~Unaudited Condensed Consolidated Financial Statements.~~unaudited condensed consolidated financial statements.

Table of Contents

QUICKLOGIC CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	*Three Months Ended*						*Nine Months Ended*						*Three Months Ended*						*Six Months Ended*
	*October 3,*			*September 27,*			*October 3,*			*September 27,*			*July 3,*			*July 4,*			*July 3,*			*July 4,*
	*2021*			*2020*			*2021*			*2020*			*2022*			*2021*			*2022*			*2021*
Revenue	$	3,858		$	1,780		$	8,980		$	6,134		$	4,541		$	2,882		$	8,637		$	5,122
Cost of revenue		1,126			857			3,638			3,092			1,997			1,416			3,632			2,512
Gross profit		2,732			923			5,342			3,042			2,544			1,466			5,005			2,610
Operating expenses:
Research and development		1,807			1,380			5,346			5,399			1,190			1,652			2,523			3,539
Selling, general and administrative		2,186			1,478			5,927			5,022			1,981			1,794			4,118			3,741
Restructuring costs		0			111			0			624
Total operating expenses		3,993			2,969			11,273			11,045			3,171			3,446			6,641			7,280
Loss from operations		(1,261	)		(2,046	)		(5,931	)		(8,003	)		(627	)		(1,980	)		(1,636	)		(4,670	)
Interest expense		(35	)		(36	)		(99	)		(299	)		(22	)		(32	)		(55	)		(64	)
Gain on forgiveness of debt		0			0			1,192			0			0			0			0			1,192
Interest income and other income (expense), net		(7	)		27			(59	)		94			142			(45	)		19			(52	)
Loss before income taxes		(1,303	)		(2,055	)		(4,897	)		(8,208	)		(507	)		(2,057	)		(1,672	)		(3,594	)
Provision for (benefit from) income taxes		(21	)		10			136			1
Provision for income taxes														17			5			16			157
Net loss	$	(1,282	)	$	(2,065	)	$	(5,033	)	$	(8,209	)	$	(524	)	$	(2,062	)	$	(1,688	)	$	(3,751	)
Net loss per share:
Basic and diluted	$	(0.11	)	$	(0.19	)	$	(0.44	)	$	(0.88	)	$	(0.04	)	$	(0.18	)	$	(0.14	)	$	(0.33	)
Weighted average shares outstanding:
Basic and diluted		11,573			11,023			11,441			9,315			12,412			11,485			12,269			11,374

Note: Net loss equals comprehensive loss for all periods presented.

See accompanying ~~Notes~~notes to ~~Unaudited Condensed Consolidated Financial Statements.~~unaudited condensed consolidated financial statements.

Table of Contents

QUICKLOGIC CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	*Nine Months Ended*						*Six Months Ended*
	*October 3,*			*September 27,*			*July 3,*			*July 4,*
	*2021*			*2020*			*2022*			*2021*
Cash flows from operating activities:
Net loss	$	(5,033	)	$	(8,209	)	$	(1,688	)	$	(3,751	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		471			644			334			323
Stock-based compensation		1,455			601			860			570
Write-down of inventories		225			55
Write-off of equipment		(5	)		41
Write-down of inventories and reclassifications								54			229
Gain on disposal of equipment								(76	)		0
Gain on forgiveness of debt		(1,192	)		0			0			(1,192	)
Allowance for bad debt		62			0
Bad debt expense								0			32
Changes in operating assets and liabilities:
Accounts receivable		(386	)		876			(2,266	)		(407	)
Inventories		281			67			(188	)		254
Other assets		(90	)		433			(6	)		82
Trade payables		699			225			1,161			569
Accrued liabilities and deferred revenue		293			122
Accrued liabilities								87			266
Deferred revenue								(313	)		24
Other long-term liabilities		167			0			(22	)		189
Net cash used in operating activities		(3,053	)		(5,145	)		(2,063	)		(2,812	)
Cash flows from investing activities:
Capital expenditures for property and equipment		(178	)		(155	)		(117	)		(174	)
Capitalized internal-use software		(402	)		(607	)		(285	)		(273	)
Net cash used in investing activities		(580	)		(762	)		(402	)		(447	)
Cash flows from financing activities:
Payment of finance lease obligations		(231	)		(179	)		(198	)		(156	)
Proceeds from paycheck protection program loan		0			1,191
Proceeds from line of credit		45,000			42,000			30,000			30,000
Repayment of line of credit		(45,000	)		(42,000	)		(30,000	)		(30,000	)
Proceeds from issuance of common stock		148			0			1,604			148
Proceeds from equity funding, net of issuance costs		1,034			8,099
Taxes paid related to settlement of equity awards		(485	)		(67	)		0			(485	)
Net cash provided by financing activities		466			9,044
Net cash provided by (used in) financing activities								1,406			(493	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(3,167	)		3,137			(1,059	)		(3,752	)
Cash, cash equivalents and restricted cash at beginning of period		22,748			21,548			19,605			22,748
Cash, cash equivalents and restricted cash at end of period	$	19,581		$	24,685		$	18,546		$	18,996

See accompanying ~~Notes~~notes to ~~Unaudited Condensed Consolidated Financial Statements.~~unaudited condensed consolidated financial statements.

Table of Contents

QUICKLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

					*Additional*						*Total*							*Additional*					*Total*
	*Common Stock*				*Paid-In*			*Accumulated*			*Stockholders'*			*Common Stock*				*Paid-In*		*Accumulated*			*Stockholders'*
	*Shares*		*Amount*		*Capital*			*Deficit*			*Equity*			*Shares*		*Amount*		*Capital*		*Deficit*			*Equity*
Balance at January 3, 2021		11,094	$	11	$	306,885		$	(294,409	)	$	12,487
Balance at January 2, 2022															11,863	$	12	$	310,222	$	(301,025	)	$	9,209
Issuance of common stock under public stock offering, net of stock issuance cost															310		0		1,482		0			1,482
Common stock issued under stock plans and employee stock purchase plans															189		0		0		0			0
Stock-based compensation															—		0		383		0			383
Net loss															—		0		0		(1,164	)		(1,164	)
Balance at April 3, 2022															12,362		12		312,087		(302,189	)		9,910
Common stock issued under stock plans and employee stock purchase plan		354		0		(484	)		0			(484	)		66		0		122		0			122
Stock-based compensation		—		0		368			0			368			—		0		477		0			477
Net loss		—		0		0			(1,689	)		(1,689	)		—		0		0		(524	)		(524	)
Balance at April 4, 2021		11,448		11		306,769			(296,098	)		10,682
Common stock issued under stock plans and employee stock purchase plan		64		1		146			0			147
Stock-based compensation		—		0		202			0			202
Net loss		—		0		0			(2,062	)		(2,062	)
Balance at July 4, 2021		11,512	$	12	$	307,117		$	(298,160	)	$	8,969
Common stock issued under stock plans and employee stock purchase plan		79		0		0			0			0
Common stock offering, net of issuance costs of $45		199		0		1,034			0			1,034
Stock-based compensation		—		0		885			0			885
Net loss		—		0		0			(1,282	)		(1,282	)
Balance at October 3, 2021		11,790	$	12	$	309,036		$	(299,442	)	$	9,606
Balance at July 3, 2022															12,428	$	12	$	312,686	$	(302,713	)	$	9,985

					*Additional*						*Total*							*Additional*						*Total*
	*Common Stock*				*Paid-In*			*Accumulated*			*Stockholders'*			*Common Stock*				*Paid-In*			*Accumulated*			*Stockholders'*
	*Shares*		*Amount*		*Capital*			*Deficit*			*Equity*			*Shares*		*Amount*		*Capital*			*Deficit*			*Equity*
Balance at December 29, 2019		8,331	$	8	$	297,073		$	(283,258	)	$	13,823
Balance at January 3, 2021															11,094	$	11	$	306,885		$	(294,409	)	$	12,487
Common stock issued under stock plans and employee stock purchase plans															354		0		(484	)		0			(484	)
Stock-based compensation															—		0		368			0			368
Net loss															—		0		0			(1,689	)		(1,689	)
Balance at April 4, 2021															11,448		11		306,769			(296,098	)		10,682
Common stock issued under stock plans and employee stock purchase plan		52		0		(25	)		0			(25	)		64		1		146			0			147
Stock-based compensation		—		0		(398	)		0			(398	)		—		0		202			0			202
Net loss		—		0		0			(3,165	)		(3,165	)		—		0		0			(2,062	)		(2,062	)
Balance at March 29, 2020		8,383		8		296,650			(286,423	)		10,235
Common stock issued under stock plans and employee stock purchase plan		29		0		(31	)		0			(31	)
Common stock offering, net of issuance costs of $1.1 million		2,500		3		7,653			0			7,656
Stock-based compensation		—		0		741			0			741
Net loss		—		0		0			(2,979	)		(2,979	)
Balance at June 28, 2020		10,912	$	11	$	305,013		$	(289,402	)	$	15,622
Common stock issued under stock plans and employee stock purchase plan		14		0		(13	)		0			(13	)
Stock issuance costs		142		0		445			0			445
Stock-based compensation		—		0		258			0			258
Net loss		—		0		0			(2,065	)		(2,065	)
Balance at September 27, 2020		11,068	$	11	$	305,703		$	(291,467	)	$	14,247
Balance at July 4, 2021															11,512	$	12	$	307,117		$	(298,160	)	$	8,969

See accompanying ~~Notes~~notes to ~~Unaudited Condensed Consolidated Financial Statements~~unaudited condensed consolidated financial statements

Table of Contents

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~Notes to unaudited condensed consolidated financial statements

Note 1 — The Company and Basis of Presentation

QuickLogic Corporation (“QuickLogic” or “Company”) was founded in 1988 and reincorporated in Delaware in 1999. The Company enables Original Equipment Manufacturers (“OEMs”) to maximize battery life for highly differentiated, immersive user experiences with smartphone, wearable, hearable, tablet and internet-of-Things (“IoT devices”)., military, aerospace and defense products. QuickLogic delivers these benefits through industry leading ultra-low power customer programmable System on Chip (“SoC”) semiconductor solutions, embedded software, and algorithm solutions for always-on voice and sensor ~~processing and enhanced visual experiences.~~processing. The Company is a fabless semiconductor provider of comprehensive, flexible sensor processing solutions, ultra-low power display bridges, and ultra-low power Field Programmable Gate Arrays (“FPGAs”)~~, and embedded FPGA (eFPGA) intellectual property (IP)~~. The Company’s wholly owned subsidiary, SensiML Corporation (“SensiML”) provides Analytics Toolkit, which is used in many of the applications where the Company’s ArcticPro™, eFPGA intellectual property (“IP”) plays a critical role. SensiML Analytics toolkit is an end-to-end software suite that provides OEMs a straightforward process for developing pattern matching sensor algorithms using machine learning technology that are optimized for ultra-low power consumption.

The accompanying interim condensed consolidated financial statements are unaudited. In the opinion of the Company’s management, these statements have been prepared in accordance with the United States generally accepted accounting principles (“U.S. GAAP”), and include all adjustments, consisting only of normal recurring adjustments, necessary to provide a fair statement of results for the interim periods presented. The Company recommends that these interim ~~Unaudited Condensed Consolidated Financial Statements~~unaudited condensed consolidated financial statements be read in conjunction with the Company's Form 10-K for the year ended January ~~3, 2021~~2, 2022, , which was filed with the Securities and Exchange Commission (“SEC”) on March ~~23, 2021.~~22, 2022. Operating results for the three and ~~nine~~six months ended ~~October~~July 3, ~~2021~~2022 are not necessarily indicative of the results that may be expected for the full fiscal year.

QuickLogic's fiscal year ends on the Sunday closest to December 31 and each fiscal quarter ends on the Sunday closest to the end of each calendar quarter. QuickLogic's ~~third~~second fiscal ~~quarters~~quarter for ~~2021~~2022 and ~~2020~~2021 ended on ~~October~~July 3, ~~2021~~2022 and ~~September 27, 2020~~July 4, 2021, respectively.

COVID-19 - Impact on Business

OnThere have been ~~January 30, 2020,~~ no~~the World Health Organization (“WHO”) declared a global emergency~~ material changes due to the ~~COVID-~~impact of the Covid-19 pandemic ~~and~~on our business from that disclosed in our most recently filed Annual Report. Our most recent Annual Report on Form 10-K for the year ended January 2, 2022 as filed with the SEC on ~~February 28, 2020,~~March 22, 2022 ~~the WHO raised its assessment of the threat from high to very high at a global level. The social~~provides additional information about our business and ~~economic impact of the COVID-~~19 ~~outbreak has continued to increase exponentially since this declaration. The outbreak has resulted in significant governmental measures being implemented to control the spread of COVID-~~19 ~~and countries across the world continue to manage repeated waves of the pandemic, including variant strains of COVID-~~19 amid increasing, yet uneven progress toward vaccination. Restrictions on travel, business operations and the movement of people in many regions of the world in which the Company operates, and the imposition of further shelter-in-place or similarly restrictive work-from-home orders would impact many of the Company’s offices and employees, including those located in the United States. As a result, the Company has substantially limited the presence of personnel in its offices in several impacted locations, implemented travel restrictions and withdrawn from various industry events. The Company has also experienced some disruption and delays in its supply chain, customer deployment plans, and logistics challenges, including certain limitations on its ability to access customer fulfillment and service sites.operations.

~~As such, while COVID-~~19 ~~has had an impact on the Company's financial results on the~~ ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~October 3, 2021~~~~, the COVID-~~19 ~~pandemic and its potential effects on the Company’s business in its fiscal~~ ~~2021~~ remain dynamic, and the broader implications for its business and future results of operations remain uncertain and cannot be predicted. These implications could include 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. Additionally, multiple countries have imposed and ~~may~~ ~~further impose restrictions on business operations and movement of people and products to limit the spread of COVID-~~~~19.~~ ~~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 COVID-~~19 ~~could delay or inhibit its ability to obtain the supply of components and finished goods. If COVID-~~19 ~~becomes more prevalent 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 and results of operations. In addition, any other widespread health crisis that could adversely affect global and regional economies, financial markets and overall demand environment for the Company's products could have a material adverse effect on the Company’s business, cash flows or results of operations. It is difficult to accurately predict the full impact that COVID-19 will have on the Company's future results from operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the duration and severity of the pandemic and related containment measures. The Company will continue to closely monitor the pandemic's associated effects on all aspects of the business.

~~Restructuring~~

In ~~January 2020,~~ ~~the Company implemented a restructuring plan to lower annual operating expenses. The restructuring plan was approved by the Company’s Board of Directors on~~ ~~January 24, 2020.~~ ~~Pursuant to the restructuring plan, the Company recorded $624,000 restructuring costs during the~~ ~~nine~~ ~~months ended~~ ~~September 27, 2020,~~ ~~consisting primarily of employee severance related costs and facilities costs. There were 0 restructuring charges incurred for the~~ ~~nine~~ ~~months ended~~ ~~October~~ ~~3,2021.~~

~~Table of Contents~~

Liquidity

The Company has financed its operations and capital investments through ~~sales~~public and private offerings of our common stock, finance and operating leases, and borrowing under a revolving line of credit ~~and~~with Heritage Bank (the "Revolving Facility"), partially offset by cash ~~flows from~~used in operations. ~~As of~~ ~~October 3, 2021~~,In addition to the Company's ~~principal sources of liquidity consisted~~$18.5 million of cash, cash equivalents and restricted cash, as of ~~$19.6 million, including~~July 3, 2022 other sources of liquidity included a $15.0 million drawn down from ~~its revolving line of credit with Heritage Bank of Commerce (“Heritage Bank”), $1.2~~the Revolving Facility and $1.6 million ~~loan received under the Paycheck Protection Program (“PPP”) which was forgiven~~ in~~January~~ of ~~2021,~~ ~~and~~ net proceeds ~~of $1.0 million~~ from the Company's sale of common stock in ~~September 2021.~~

On ~~December 11, 2020,~~ ~~the Company entered into a Second Amendment (the “Second Amendment”) to the Amended and Restated Loan Agreement with Heritage Bank originally entered into on~~ ~~December 21, 2018 (~~~~the "Amended and Restated Loan Agreement"). The Second Amendment extended the loan maturity date for~~ ~~one~~ ~~year through~~ ~~September 28 2022,~~ ~~and amended the interest to a rate per annum equal to~~ ~~one~~six ~~half of~~months ended ~~one~~July 3, 2022 ~~percentage point (0.50%) above the prime rate.~~

On ~~August 16, 2021,~~ ~~the Company entered into a Third Amendment to the Amended and Restated Loan Agreement with Heritage Bank (the "Third Amendment")~~. The Third Amendment (a) amended the Company’s non-compliance with the minimum cash covenant which obligated the Company to maintain at least $3.0 million of unrestricted cash at all times and (b) amended this obligation such that the Company shall now be required to maintain unrestricted cash in its accounts at the Bank in an amount of at least $3.0 million measured i) immediately prior to the funding of any credit extension, and ii) at all times that any advance is outstanding.

The Company was in compliance with all the Heritage Bank Revolving Facility loan covenants as of ~~October~~July 3, ~~2021~~2022. As of ~~October~~July 3, ~~2021~~2022, the Company had $15.0 million of outstanding ~~revolving line of credit~~on the Revolving Facility with an interest rate of ~~3.75%~~5.25%.

On ~~May 6, 2020,~~February 9, 2022, the Company entered into ~~a loan agreement~~common stock purchase agreements with ~~Heritage Bank for a loan of $1.2 million pursuant to the PPP under the Coronavirus Aid, Relief, and Economic Security Act enacted on~~ ~~March 27, 2020,~~ ~~or CARES Act. On~~ ~~January 26, 2021,~~ ~~the Company received notice from Heritage Bank that amounts under the loan agreement had been forgiven. See Note~~ 5 ~~to these Unaudited Condensed Consolidated Financial Statements~~certain investors for the ~~details.~~

On ~~June 22, 2020,~~ ~~the Company closed~~sale of an ~~underwritten public offering~~aggregate of ~~2.5 million~~310,000 shares of common stock, ~~$0.001~~ par value ~~per~~$0.001, in a registered direct offering. These share ~~at a price of $3.50 per share. The Company received gross~~placements resulted in net cash proceeds ~~from the offering~~ of approximately ~~$8.8 million and incurred stock issuance~~$1.5 million. Issuance costs ~~of approximately $1.1 million. Under the terms of the underwriting agreement, the Company granted the underwriter a~~ 30~~-day option~~related to this offering were negligible. The purchase ~~up to an additional 375,000 shares of common stock to cover overallotments. On~~ ~~July 21, 2020~~ ~~the underwriter's partially exercised the option to purchase 141,733 additional shares~~price for each share of common stock in ~~connection with~~this placement was $4.78. The Company currently intends to use the ~~offering, resulting in additional gross~~net proceeds tofrom the ~~Company~~financing for working capital, the development of ~~approximately $496,000~~next generation eFPGA-based products, including AI and ~~incurred additional stock issuance costs of approximately $52,000. Total gross proceeds received from this offering was approximately $9.3 million~~open-source hardware or software, and ~~incurred total stock issuance costs of approximately $1.2 million. Net proceeds received from this offering after deducting stock issuance costs was approximately $8.1 million.~~general corporate purposes.

On ~~September 22, 2021,~~ ~~the Company entered into a Share Subscription Agreement for the sale of 125,000 shares of our common stock (the “Private Placement”). On~~ ~~September 30, 2021,~~ the Company entered into a Common Stock Purchase Agreement for the sale of 73,664 shares of our common stock, in a registered direct offering pursuant to our effective shelf registration statement on Form S-3 ~~(File~~ ~~No.~~~~333~~-~~230352~~) (the “Registered Direct Offering,” and together with the Private Placement, the “Share Placements”). The net proceeds to the Company from the Share Placements in aggregate, after deducting equity issuance costs of approximately $45,000, was approximately $~~1.0~~ ~~million.~~

The Company currently uses its cash to fund its working capital to accelerate the development of next generation products and for general corporate purposes. Based on past performance and current expectations, the Company believes that its existing cash and cash equivalents, together with available financial resources from the Revolving Facility, ~~with Heritage Bank,~~ will be sufficient to fund its operations and capital expenditures and provide adequate working capital for the next twelve months. We continue to monitor our financial performance to ensure sufficient liquidity to fund operations and execute on our business plan.

Various factors can affect the Company’s liquidity, including, among others: the level of revenue and gross profit as a result of the cyclicality of the semiconductor industry, the conversion of design opportunities into revenue, ~~the~~ market acceptance of existing and new products including solutions based on its eFPGA IP, ArcticLink^®, and PolarPro^® platforms, eFPGA, EOS S3 SoC, Quick AI solution, and SensiML software ~~tools, the~~ fluctuations in revenue as a result of product end-of-life, ~~the~~ fluctuations in revenue as a result of the stage in the product life cycle of its customers’ products, ~~the~~ costs of securing access to and availability of adequate manufacturing ~~capacity, the~~capacity; levels of ~~inventories and~~inventories; wafer purchase ~~commitments,~~commitments; customer credit ~~terms,~~terms; the amount and timing of research ~~and~~ development ~~expenditures,~~expenditures; the timing of new product ~~introductions,~~introductions; production ~~volumes and~~volumes; product ~~quality,~~quality; sales and marketing ~~efforts,~~efforts; the value and liquidity of its investment ~~portfolio,~~portfolio; changes in operating assets and ~~liabilities,~~liabilities; the ability to obtain or renew debt financing and to remain in compliance with the terms of existing credit ~~facilities,~~facilities; the ability to raise funds from the sale of equity in the ~~Company, the ability to capitalize on synergies with our newly acquired subsidiary SensiML;~~Company; the issuance and exercise of stock options and participation in the Company’s employee stock purchase plan and other factors related to the uncertainties of the industry and global economics.

Over the longer term, the Company anticipates that sales generated from its new product offerings and existing cash and cash equivalents, together with financial resources from its Revolving Facility, assuming renewal of the Revolving Facility or the Company entering into a new debt agreement with an alternative lender prior to the ~~Heritage Bank~~ expiration of the Revolving Facility in December 2023, and its ability to raise additional capital in the public capital markets, will be sufficient to satisfy its operations and capital expenditures. However, the Company cannot provide any assurance that it will be able to raise additional capital, if required, or that such capital will be available on terms acceptable to the Company. The inability of the Company to generate sufficient sales from its new product offerings and/or raise additional capital if needed could have a material adverse effect on the Company’s operations and financial condition, including its ability to maintain compliance with its lender’s financial covenants. ~~On November 16, 2021, we entered into a Fourth Amendment to extend the Amended and Restated Loan Agreement with Heritage Bank to extend the maturity date to December 31, 2023. See Note 12.~~

Table of Contents

Principles of Consolidation

The ~~Unaudited Condensed Consolidated Financial Statements~~unaudited condensed consolidated financial statements include the accounts of QuickLogic and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Foreign Currency

The functional currency of the Company's non-U.S. operations is the U.S. dollar. Accordingly, all monetary assets and liabilities of these foreign operations are translated into U.S. dollars at current period-end exchange rates and non-monetary assets and related elements of expense are translated using historical exchange rates. Income and expense elements are translated to U.S. dollars using the average exchange rates in effect during the period. Gains and losses from the foreign currency transactions of these subsidiaries are recorded as interest income and other ~~income (expense),~~expense, net in the unaudited condensed consolidated statements of operations.

Uses of Estimates

The preparation of these ~~Unaudited Condensed Consolidated Financial Statements~~unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities and the reported amounts of revenue and expenses during the period. Actual results could differ materially from those estimates, particularly in relation to revenue recognition, the allowance for doubtful accounts, sales returns, valuation of long-lived assets including mask sets, valuation of goodwill, capitalized internal-use software and related amortizable lives, fair value measurements, and intangibles related to the acquisition of SensiML, including the estimated useful lives of acquired intangible assets, valuation of inventories including identification of excess quantities, market value and obsolescence, measurement of stock-based compensation awards, accounting for income taxes and estimating accrued liabilities.

Contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together ~~may~~ ~~require significant judgment.~~

Judgment is required to determine the Stand-alone Selling Price (“SSP”) for each distinct performance obligation. The Company uses a range of amounts to estimate SSP when each of the products and services are sold separately and determines the discount to be allocated based on the relative SSP of the various products and services when products and services sold are bundled. In instances where SSP is ~~not~~ ~~directly observable, such as when the Company does~~ ~~not~~ ~~sell the product or service separately, it determines the SSP using~~ For additional information, ~~that~~ ~~may~~ ~~include market conditions and other observable inputs. The Company typically has more than~~ ~~one~~ ~~SSP for individual products and services due~~please refer to the ~~stratification of those products and services by customers. In these instances,~~Company's most recent annual report which was filed with the ~~Company~~SEC on ~~may~~ March 22, 2022.~~use information such as the size of the customer, customer tier, type of the technology used, customer demographics, geographic region and other factors in determining the SSP.~~

Concentration of Risk

The Company's accounts receivable ~~are~~is denominated in U.S. dollars and are derived primarily from sales to customers located in North America, Asia Pacific, and Europe. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. See Note 109, ~~to the Unaudited Condensed Consolidated Financial Statements~~Information Concerning Product Lines, Geographic Information and Revenue Concentration, for information regarding concentrations associated with accounts receivable.

Note 2 — Significant Accounting Policies

During the ~~nine~~three and six months ~~period~~ ended ~~October~~July 3, ~~2021~~2022, there were no changes in the Company's significant accounting policies from its disclosures in the Annual Report on Form 10-K for the year ended January ~~3, 2021~~~~, except for the new accounting standards adopted during the~~ ~~nine~~ ~~months ended~~ ~~October 3, 2021~~2, 2022. For a discussion of the significant accounting policies, please see the Annual Report on Form 10-K for the fiscal year ended January ~~3, 2021~~2, 2022, , filed with the SEC on March ~~23,~~22, ~~2021.~~ ~~For a discussion of the new accounting standards adopted during the~~ ~~nine~~ ~~months of~~ ~~2021~~~~, see “New Accounting Pronouncements” below.~~

~~Included in the results for the~~ ~~third~~ ~~quarter of fiscal~~ ~~2021,~~ ~~was IP Licensing revenue of approximately $1.0 million related to an agreement the Company signed in~~ ~~August 2021.~~ The Company allocated the total transaction price to each separate performance obligation on a relative stand alone selling price basis. The Company expects the remaining performance obligations to be delivered by ~~December 2021.~~2022.

~~Table of Contents~~

~~Fair Value Measurements~~

~~The Company’s cash, cash equivalents and restricted cash include money market account balance of $19.6 million and $22.7 million as of~~ ~~October 3, 2021~~~~, and~~ ~~January 3, 2021~~~~, respectively. Fair value of the Company’s money market account balance with Heritage Bank equals to book value. The Company's money market account primarily consists of cash.~~

~~Restricted Cash~~

~~Cash, cash equivalent and restricted cash includes an amount of~~ ~~$100,000 pledged as cash security related to the use of credit cards as of~~ ~~October 3, 2021~~~~, and~~ ~~January 3, 2021~~.

~~New~~Recent Accounting ~~Pronouncements~~

~~Recently adopted accounting pronouncements~~Standards Adopted

In ~~December 2019,~~May 2021, the Financial Accounting Standards Board ("FASB") issued ASU No.2021-04,Issuer’s Accounting for Certain Modifications of Exchanges of Freestanding Equity-Classified Written Call Options to clarify the accounting for modifications or exchanges of freestanding equity-classified written call options, such as warrants, that remain equity classified after modification or exchange. This ASU became effective for the Company on January 3, 2022 and did not have a material impact on the Company's consolidated financial statements.

New Accounting Standards Not Yet Adopted

In June 2022, the FASB issued ASU No. ~~2019~~2022-~~12,~~03, ~~Simplifying~~Fair Value Measurement (Topic 820) Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions to clarify the ~~Accounting for Income Taxes, which removes certain exceptions~~measurement of the fair value of an equity security subject to contractual restrictions that prohibit the ~~general principles~~sale of ~~ASC~~ ~~740,~~ ~~in order to reduce the cost~~an equity security and ~~complexity of its application. These changes include elimination to the exceptions for (~~1~~) Intra-period tax allocation, (~~2~~) Deferred tax liabilities~~requires disclosures related to ~~outside basis differences, and (~~these types of equity securities. This ASU 32022~~) Year-to-date losses in interim periods. The~~-03 becomes effective for the Company ~~adopted this standard prospectively effective~~on January ~~4, 2021,~~2, 2023 ~~with an insignificant impact to the Unaudited Condensed Consolidated Financial Statements.~~

~~New accounting pronouncements~~and is not ~~yet adopted~~

In ~~August 2020,~~ ~~the FASB issued ASU~~ ~~No.~~~~2020~~-~~06,~~~~Debt~~—~~Debt with Conversion and Other Options (Subtopic~~ ~~470~~-20~~) and Derivatives and Hedging~~—~~Contracts in Entity~~’~~s Own Equity (Subtopic~~ ~~815~~-40~~): Accounting for Convertible Instruments and Contracts in~~expected to have an Entity’s Own Equity, which address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. This amendment is effective for public business entities that meet the definition of a Securities and Exchange Commission ("SEC") filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after ~~December 15, 2021,~~ ~~including interim periods within those fiscal years. The Company is currently evaluating the potential~~ impact on ~~its Unaudited Condensed Consolidated Financial Statements.~~the Company's consolidated financial statements or disclosures.

Note 3 — Net Loss Per Share

Basic loss per share is computed by dividing net loss ~~available to common stockholders~~ by the weighted average number of common shares outstanding during the period. Diluted net loss per share was computed using the weighted average number of common shares outstanding during the period plus potentially dilutive common shares outstanding during the period under the treasury stock method. In computing diluted net loss per share, the weighted average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options and warrants.

For the three and ~~nine~~six months ended ~~October~~July 3, ~~2021~~ 2022and ~~September 27, 2020~~July 4, 2021,~~690,719~~ 536 thousand and ~~979,363~~255 thousand shares of common stock, respectively, associated with equity awards and the estimated number of shares to be purchased under the current offering period of the 2009 Employee Stock Purchase Plan were outstanding. These shares were not included in the computation of diluted net loss per share, as they were considered anti-dilutive due to the net losses the Company experienced during these periods. Warrants to purchase up to ~~386,100~~386 thousand shares were issued in connection with May 29, 2018, stock offering were not included in the diluted loss per share calculation of the ~~three~~ ~~and~~ ~~nine~~ ~~months ended~~ ~~October 3, 2021~~ ~~and~~ ~~September 27, 2020~~,periods presented as they were also considered anti-dilutive due to the net loss the Company experienced during these periods.

108

Table of Contents

Note 4 — Balance Sheet Components

The following table provides details relating to certain balance sheet line items as of ~~October~~July 3, ~~2021~~2022, and January ~~3, 2021~~2, 2022 (in thousands):

	*July 3,*			*January 2,*
	*2022*			*2022*
Accounts receivable:
Trade account receivables	$	3,295		$	1,113
Less: Allowance for doubtful accounts		(62	)		(62	)
Trade account receivables, net		3,233			1,051
Unbilled account receivables		12			0
Contract assets		315			243
	$	3,560		$	1,294
Inventories:
Work-in-process	$	1,512		$	1,397
Finished goods		700			681
	$	2,212		$	2,078
Other current assets:
Prepaid taxes, royalties and other prepaid expenses	$	893		$	921
Other		308			260
	$	1,201		$	1,181
Property and equipment, net:
Equipment	$	10,348		$	10,341
Software		1,803			1,878
Furniture and fixtures		21			32
Leasehold improvements		466			466
		12,638			12,717
Less: Accumulated depreciation and amortization		(12,031	)		(12,218	)
	$	607		$	499
Capitalized internal-use software, net:
Capitalized internal-use software	$	1,984		$	1,699
Less: Accumulated amortization		(641	)		(458	)
	$	1,343		$	1,241
Accrued liabilities:
Accrued compensation	$	914		$	740
Accrued employee benefits		37			111
Accrued payroll tax		97			102
Other(1)		604			712
	$	1,652		$	1,665
(1) Accrued liabilities-Other is partially comprised of a $100 non-cash lease adjustment offsetting Other Assets in the six months ended July 3, 2022.

October 3,

January 3,

2021 2021
Inventories:

Raw materials
$ 0 $ 191
Work-in-process
1,428 1,842
Finished goods
754 655
$ 2,182 $ 2,688
Other current assets:

Prepaid taxes, royalties and other prepaid expenses
$ 871 $ 884
Other
286 182
$ 1,157 $ 1,066
Property and equipment, net:

Equipment
$ 10,336 $ 10,471
Software
1,880 1,783
Furniture and fixtures
31 33
Leasehold improvements
466 466
12,713 12,753
Less: Accumulated depreciation and amortization
(12,171 ) (12,205 )
$ 542 $ 548
Capitalized internal-use software, net:

Capitalized internal-use software
$ 1,568 $ 1,166
Less: Accumulated amortization
(377 ) (180 )
$ 1,191 $ 986
Accrued liabilities:

Employee related accruals
$ 955 $ 762
Other
636 578
$ 1,591 $ 1,340

~~Table of Contents~~

Note 5 — Debt Obligations

Revolving Line of Credit

As of ~~October~~July 3, ~~2021~~2022 and January ~~3, 2021~~2, 2022, the Company had $15.0 million of revolving debt outstanding with an interest rate of 5.25% and 3.75% per ~~annum.~~annum, respectively. 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 ~~Amended and Restated Loan Agreement.~~agreement. The Company was in compliance with all loan covenants under the ~~Amended and Restated Loan Agreement~~agreement as of the end of the current reporting period. Interest expense recognized were ~~$21,941~~ $14 thousand and ~~$28,146~~$39 thousand for thethree and six months ended July 3, 2022, respectively, and $22 thousand and $46 thousand for the three ~~months ended~~ ~~October 3, 2021~~ and ~~September 27, 2020,~~ ~~respectively, and $68,109 and $270,521 for the~~ ~~nine~~six months ended ~~October 3,~~July 4, 2021~~and~~ ~~September 27, 2020,~~ , respectively.

~~Payroll Protection Program Loan~~

On ~~May 6, 2020,~~April 4, 2022, the Company entered into a ~~$1.2 million Payroll Protection Program loan agreement~~Fifth Amendment (the "Amendment") to the December 21, 2018 Amended and Restated Loan and Security Agreement (as amended, the "Agreement") with Heritage ~~Bank (“PPP Loan”) under~~Bank. The purpose of the ~~CARES Act as implemented by the U.S. Small Business Administration. The PPP Loan~~Fifth Amendment was ~~evidenced by a promissory note (“PPP Note”) dated~~ ~~May 6, 2020~~ ~~and matured~~ ~~two~~ ~~years from the disbursement date. The PPP Note bore interest of 1.00% per annum, with the~~ ~~first~~~~six~~ ~~months of interest deferred. Principal and interest were payable monthly commencing~~ ~~six~~ ~~months after the disbursement date. The Company applied for loan forgiveness in the~~ ~~fourth~~ ~~quarter of fiscal~~ ~~2020~~ ~~in accordance with the~~primarily to clarify certain terms of the ~~CARES Act. On~~Agreement as follows: (i) added a definition of "Remaining Months Liquidity" to be defined as the Borrower's unrestricted cash maintained at Bank (including cash in the Pledged Account) minus the outstanding principal amount of the Advances, divided by the absolute value of the average trailing ~~January 26, 2021,~~ three (3) month EBITDA; and (ii) revised the minimum cash and remaining months liquidity financial covenants. The minimum cash covenant was revised such that the balance of unrestricted cash in the pledged account shall at all times exceed the principal amount of all advances owed that are outstanding at any time. The remaining months liquidity covenant specified that it should not be less than nine months. The Company ~~received notice from Heritage Bank~~does not believe that ~~amounts~~the clarifications of the terms in the Amendment will have a material impact on the Company's liquidity or utilization of the revolving loan under the PPP Note had been forgiven. The gain related to the loan forgiveness of approximately $1.2 million is reported in other income as gain on forgiveness of debt on the Company’s Unaudited Condensed Statements of Operations for the ~~nine~~ ~~months ended~~ ~~October 3, 2021~~.Agreement.

129

Table of Contents

Note 6 — Leases

The Company entered into operating leases for office space for its ~~headquarters,~~headquarters. The Company has elected the practical expedient to apply to recognition requirements to short-term leases for its domestic and foreign subsidiaries and for its sales ~~offices.~~offices and recognized rent payments on short-term leases on a straight-line basis over the lease term. Finance leases are primarily for engineering design software. Operating leases generally have lease terms of one to five years. Finance leases are generally two to three years. As of ~~October~~July 3, ~~2021~~2022 and January 2, 2022, the balance of right-of-use assets was approximately ~~$1.7~~$1.1 million and $1.5 million, respectively, and the lease liability was approximately ~~$1.8~~$1.2 million and $1.6 million, respectively, for operating and finance leases for the headquarters in San Jose and for the operating subsidiaries of SensiML in Oregon and the Company's subsidiary in India. ~~The lease term of the San Diego facility expired in~~ ~~July~~ ~~2020~~ ~~and the office was closed. On~~ ~~July 10, 2020,~~ ~~the Indian subsidiary leased a smaller office premises of approximately 1,100 square feet for a period of~~ ~~eleven~~ ~~months to accommodate the reduced headcount. Effective~~ ~~July 2020,~~ ~~the rental expense of the prior office lease in India was expensed to restructuring charges in the amount of approximately $39,000. The lease term of the Indian facility expired in~~ ~~July 2021.~~ Total rent expense was $0.1 million and $0.2 million for the three ~~months ended~~ ~~October 3, 2021~~ and ~~September 27, 2020~~ ~~was approximately $105,000 and $150,000, respectively. Total rent expense for the~~ ~~nine~~six months ended ~~October~~July 3, ~~2021~~ 2022and ~~September 27, 2020~~July 4, 2021, ~~as approximately $319,000 and $455,000,~~ respectively.

The following table provides the expenses related to operating and finance leases (in thousands):

	*Three Months Ended*				*Nine Months Ended*				*Three Months Ended*				*Six Months Ended*
	*October 3, 2021*		*September 27, 2020*		*October 3, 2021*		*September 27, 2020*		*July 3, 2022*		*July 4, 2021*		*July 3, 2022*		*July 4, 2021*
Operating lease costs:
Fixed	$	101	$	146	$	306	$	440	$	100	$	101	$	199	$	204
Short term		4		4		13		15		6		5		13		9
Total	$	105	$	150	$	319	$	455	$	106	$	106	$	212	$	213
Finance lease costs:
Amortization of ROU asset	$	87	$	91	$	591	$	224	$	109	$	98	$	219	$	513
Interest		6		9		57		29		6		6		13		52
Total	$	93	$	100	$	648	$	253	$	115	$	104	$	232	$	565

The following table provides the details of supplemental cash flow information. ~~The right-of-use~~Right-of-use assets obtained in exchange for new finance and operating lease liabilities represent the new operating and finance leases entered into during the ~~nine~~six months ended ~~October~~July 3, ~~2021~~ 2022and the ~~September 27, 2020~~six months ended July 4, 2021 were $0 (in thousands):

	*Six Months Ended*
	*July 3, 2022*		*July 4, 2021*
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	203	$	202
Operating cash flows used for finance leases		13		5
Financing cash flows used for financing leases		198		156
Total	$	414	$	363

Nine Months Ended

October 3,

September 27,

2021 2020
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows used for operating leases
$ 100 $ 427
Operating cash flows used for finance leases
9 29
Financing cash flows used for financing leases
231 179
Total
$ 340 $ 635

Right-of-use assets obtained in exchange for finance lease obligations
$ 397 $ 773

~~Table of Contents~~

The following table provides the details of right-of-use assets and lease liabilities as of ~~October~~July 3, ~~2021~~2022 and January ~~3, 2021~~2, 2022 (in thousands):

	*October 3,*		*January 3,*
	*2021*		*2021*		*July 3, 2022*		*January 2, 2022*
Right-of-use assets:
Operating leases	$	893	$	1,134	$	640	$	809
Finance leases		829		705		501		720
Total right-of-use assets	$	1,722	$	1,839	$	1,141	$	1,529
Lease liabilities:
Operating leases	$	960	$	1,212	$	695	$	873
Finance leases		836		670		492		690
Total lease liabilities	$	1,796	$	1,882	$	1,187	$	1,563

Table of Contents

The following table provided the details of future lease payments for operating and finance leases as of ~~October~~July 3, ~~2021~~2022 (in thousands):

	*Operating Leases*			*Finance Leases*			*Operating Leases*			*Finance Leases*
2021 (Remaining period)	$	100		$	159
2022		409			475
2022 (remaining period)							$	206		$	264
2023		421			141			422			141
2024		107			106			106			106
Total lease payments		1,037			881			734			511
Less: Interest		(77	)		(45	)		(39	)		(19	)
Present value of lease liabilities	$	960		$	836		$	695		$	492

The following table provides the details of lease terms and discount rates as of ~~October~~July 3, ~~2021~~2022 and January ~~3, 2021~~2, 2022:

	October 3,			January 3,
	2021			2021			*July 3, 2022*			*January 2, 2022*
Right-of-use assets:
Weighted-average remaining lease term (years)
Operating leases		2.50			3.24			1.75			2.25
Finance leases		2.19			2.21			1.84			2.15
Weighted-average discount rates:
Operating leases		6.00	%		6.00	%		6.00	%		6.00	%
Finance leases		5.50	%		5.50	%		4.42	%		4.57	%

~~Table of Contents~~

Note7 — Employee Stock Plans

2019Stock Plan

On ~~April 24, 2019,~~May 10, 2022 at the ~~Company’s Board~~Company's Annual Meeting, Company stockholders approved increasing the reservation of ~~Directors and shareholders approved~~the additional shares under the 2019 Stock Plan, (as amended on ~~“2019~~May 10, 2022. ~~Plan”)~~The approval of an additional 900 thousand shares of common stock increased the total number of available shares to ~~replace~~1.4 million under the ~~2009~~2019 Stock ~~Plan. Under~~Plan, as amended. The number of shares available for future awards as of the date of the Annual Meeting are the sum of (1) 900 thousand, (2) the number of shares available for future awards under the plan immediately before such approval which were 522 thousand shares and (3) any shares subject to outstanding awards under the 2019 Plan ~~357,143~~or the 2009 Plan, that are terminated, canceled, surrendered, or forfeited which was zero at the Date. On May 19, 2022, the Company filed a Registration Statement on Form S-8 with the SEC to register an additional 900 thousand shares of its common stock ~~were made available for grants, plus any shares subject to any outstanding options or other awards granted~~that may be issued under the Company’s ~~2009~~2019 Stock Plan, that expire, including the 241,203 shares then available, or which are forfeited, cancelled, returned to the Company for failure to satisfy vesting requirements, settled for cash or otherwise terminated without payment being made thereunder.as amended.

~~The~~ ~~2019~~ ~~Plan was amended and restated by the Board of Directors on~~ ~~March~~ ~~5,2020~~ ~~and approved by the Company’s stockholders on~~ ~~April 22, 2020~~ ~~to, among other things, reserve an additional 550,000 shares of common stock for issuance under the~~ ~~2019~~ ~~Plan. The~~ ~~2019~~ ~~Plan was amended and restated by the Board of Directors on~~ ~~March 3, 2021~~ ~~and approved by the Company’s stockholders on~~ ~~May 12, 2021~~ ~~to, among other things, reserve an additional 600,000 shares of common stock for issuance under the~~ ~~2019~~ ~~Plan. As of~~ ~~October 3, 2021~~~~, approximately 642,899 shares of the Company’s common stock were available for issuance under the~~ ~~2019~~ ~~Plan.~~

~~2009~~ ~~Employee Stock Purchase Plan~~

~~The~~ ~~2009~~ ~~Employee Stock Purchase Plan (~~~~“2009~~ ~~ESPP”) was adopted in~~ ~~March~~ ~~2009~~ ~~and amended by the Board of Directors in~~ ~~January 2015~~ ~~and in~~ ~~February 2017,~~ ~~and approved by the Company's stockholders on~~ ~~April 23, 2015~~ ~~and~~ ~~April 26, 2017,~~ ~~to reserve an additional 71,429 and 107,143 shares of common stock, respectively, for issuance under the~~ ~~2009~~ ~~ESPP.~~

~~The~~ ~~2009~~ ~~ESPP was amended and restated by the Board of Directors on~~ ~~March 5, 2020~~ ~~and approved by the Company’s stockholders on~~ ~~April 22, 2020.~~ ~~The amendment, among other things, extend the term of the plan until~~ ~~March 5, 2029~~ ~~and reserved an additional 300,000 shares of common stock for issuance under the~~ ~~2009~~ ~~ESPP. As of~~ ~~October 3, 2021~~~~, approximately 281,859 shares of the Company’s common stock were reserved for issuance under the~~ ~~2009~~ ~~ESPP.~~

~~Table of Contents~~

Note 8 — Stock-Based Compensation

Stock-based compensation expense included in the Company's consolidated financial statements for the three and ~~nine~~six months ended ~~October~~July 3, ~~2021~~ 2022and ~~September 27, 2020~~July 4, 2021 was as follows (in thousands):

	*Three Months Ended*				*Nine Months Ended*
	*October 3,*		*September 27,*		*October 3,*		*September 27,*		*Three Months Ended*				*Six Months Ended*
	*2021*		*2020*		*2021*		*2020*		*July 3, 2022*		*July 4, 2021*		*July 3, 2022*		*July 4, 2021*
Cost of revenue	$	78	$	37	$	132	$	80	$	117	$	18	$	173	$	54
Research and development		282		51		521		73		91		82		176		239
Selling, general and administrative		525		170		802		448		269		102		511		277
Total	$	885	$	258	$	1,455	$	601	$	477	$	202	$	860	$	570

~~During the~~There was ~~nine~~no ~~months ended~~ ~~September 27, 2020~~~~, the Company reversed stock-based~~stock-based compensation expense reversal related to the cancellation of certain unvested performance-based RSUs ~~and restructuring-related terminations. During~~for the ~~second~~three ~~quarter of~~and ~~2020,~~six ~~the Company issued fully vested RSUs in lieu of cash for variable compensation to certain employees.~~months ended July 3, 2022 and July 4, 2021.

NaN stock-based compensation was capitalized during any period presented above.

NoNaN stock options were granted during the three and ~~nine~~six months ended ~~October~~July 3, ~~2021~~ 2022and ~~September 27, 2020~~July 4, 2021.

Stock-Based Compensation Award Activity

The following table summarizes the activity in the shares available for grant under the 2019 Plan during the ~~nine~~six months ended ~~October~~July 3, ~~2021~~2022 (in thousands):

	*Shares Available for Grants*
Balance at January ~~3, 2021~~2, 2022		~~320~~594
Authorized ~~shares~~		~~600~~908
RSUs granted		(~~377~~99	)
~~PRSU's granted~~		~~(175~~	)
~~Options cancelled~~		13
RSUs forfeited or expired		23
~~PRSUs forfeited or expired~~		~~239~~18
Balance at ~~October~~July 3, ~~2021~~2022		~~643~~1,421

Table of Contents

Stock Options

The following table summarizes stock options outstanding and stock option activity under the 2009 Plan and the 2019 Plan, and the related weighted average exercise price for the ~~nine~~six months ended ~~October~~July 3, ~~2021~~2022:

				*Weighted*		*Weighted*
				*Average*		*Average*		*Aggregate*
	*Number of*			*Exercise*		*Remaining*		*Intrinsic*
	*Shares*			*Price*		*Term*		*Value*
	(in thousands)					(in years)		(in thousands)
Balance outstanding at January 2, 2022		93		$	27.49
Expired		(9	)	$	48.03
Balance outstanding at July 3, 2022		84		$	25.42		2.94	$	—
Exercisable at July 3, 2022		84		$	25.42		2.94	$	—
Vested and expected to vest at July 3, 2022		84		$	25.42		2.94	$	—

Weighted

Weighted

Average

Average

Aggregate

Number of

Exercise

Remaining

Intrinsic

Shares

Price

Term

Value

(in thousands)

(in years)

(in thousands)

Balance outstanding at January 3, 2021
121 $ 28.46 3.75 —
Forfeited or expired
(13 ) $ 23.84
Balance outstanding at October 3, 2021
108 $ 29.04 2.99 $ 0
Exercisable at October 3, 2021
108 $ 29.04 2.99 $ 0
Vested and expected to vest at October 3, 2021
108 $ 29.04 2.99 $ 0

~~Table of Contents~~

NaN stock options were granted, exercised, forfeited or expired during the ~~three~~ ~~and~~ ~~nine~~six months ended ~~October~~July 3, ~~2021~~2022 and ~~September 27, 2020~~July 4, 2021.

Total stock-based compensation related to stock options was ~~approximately~~ $0 ~~and $11,000 for~~during the ~~three~~six months ended ~~October~~July 3, ~~2021~~2022 and ~~September 27, 2020~~July 4, 2021 ~~respectively, and $0 and $39,000 for the~~ ~~nine~~ ~~months ended~~ ~~October 3, 2021~~ ~~and~~ ~~September 27, 2020~~~~, respectively.~~ .

As of ~~October~~July 3, ~~2021~~2022, the fair value of unvested stock options, net of forfeitures, was $0.

Restricted Stock Units

The Company grants restricted stock units (“RSUs”) and performance restricted stock units ("PRSUs") to employees and directors with various vesting terms. RSUs entitle the holder to receive, at no cost, one common share for each RSU as it vests. In general, the Company's policy is to withhold shares in settlement of employee tax withholding obligations upon the vesting of RSUs. The stock-based compensation expense related to RSUs and PRSUs was approximately ~~$854,000~~$0.5 million and ~~$231,000~~$0.9 million for the three ~~months ended~~ ~~October 3, 2021~~ and~~September 27, 2020~~ ~~respectively, and $1.4 million and $538,000 for the~~ ~~nine~~ ~~months ended~~ ~~October 3, 2021~~ ~~and~~ ~~September 27, 2020~~ ~~respectively. Due to the cancellation of certain performance based RSUs and cancellations relating to restructuring, which was implemented in~~ ~~January 2020,~~ ~~the Company reversed stock-based compensation previously recorded resulting in a credit to the stock-based compensation during the~~ six months ended ~~June 28, 2020.~~July 3, 2022, respectively, and approximately $0.2 million and $0.6 million for the three and six months ended July 4, 2021, respectively.

As of ~~October~~July 3, ~~2021~~2022 and ~~September 27, 2020~~July 4, 2021, there was approximately ~~$2.1~~$1.1 million and ~~$1.2~~$0.2 million, respectively, in unrecognized compensation expense related to RSUs. The remaining unrecognized stock-based compensation expense as of ~~October~~July 3, ~~2021~~2022 is expected to be recorded over a weighted average period of ~~1.39~~1.47 years.

A summary of activity for the Company's RSUs and PRSUs for the ~~nine~~six months ended ~~October~~July 3, ~~2021~~2022 is as follows:

	*RSUs & PRSUs Outstanding*
				*Weighted*
				*Average*
	*Number of*			*Grant Date*
	*Shares*			*Fair Value*
	(in thousands)
Nonvested at January 2, 2022		568		$	5.86
Granted		99			5.51
Vested		(229	)		5.95
Forfeited		(22	)		5.09
Nonvested at July 3, 2022		416		$	5.78

RSUs & PRSUs Outstanding

Weighted

Average

Number of

Grant Date

Shares

Fair Value

(in thousands)

Nonvested at January 3, 2021
800 $ 4.99
Granted
552 5.82
Vested
(537 ) 5.00
Forfeited
(262 ) 4.99
Nonvested at October 3, 2021
553 $ 5.81

~~Table of Contents~~

Employee Stock Purchase Plan

Total stock-based compensation related to the Company's ~~ESPP~~Employee Stock Purchase Plan was approximately ~~$31,000~~$11 thousand and ~~$16,000~~$34 thousand for the three and sixmonths ended ~~October~~July 3, ~~2021~~ ~~and~~ ~~September 27, 2020~~2022, respectively, and ~~$97,000~~$36 thousand and ~~$24,000~~$66 thousand for the ~~nine~~three and six months ended ~~October 3,~~July 4, 2021~~and~~ ~~September 27, 2020~~, respectively.

Note 98 — Income Taxes

The Company recorded a net income tax ~~(benefit)~~ expense of ~~($21,000)~~$17 thousand and ~~$10,000~~$16 thousand for the three ~~months ended~~ ~~October 3, 2021~~ and ~~September 27, 2020~~ ~~, respectively; and $136,000 and $1,000 for the~~ ~~nine~~six months ended ~~October~~July 3, ~~2021~~ 2022, respectively, and $5 thousand and $0.2 million for the threeand ~~September 27, 2020~~six months ended July 4, 2021, respectively. A majority of the income tax expense for the ~~first~~three ~~quarter of~~months ended ~~2021~~July 3, 2022 ~~relates~~was related to the Company's foreign subsidiaries, which are cost-plus entities, and ~~withholding~~state minimum income taxes. A majority of the income tax ~~of $125,000~~expense for the six months ended July 3, 2022 was related to ~~one~~~~-time distribution resulting from restructuring in India. A~~income tax expense ~~resulting~~of the Company's foreign subsidiaries and state minimum income taxes, partially offset by tax benefits from ~~the assessment and statutory closing of prior years’~~ foreign income tax returns ~~relates~~related to the Company's foreign ~~subsidiaries, which are cost-plus entities.~~subsidiaries. The difference between the estimated annual effective income tax benefit rate of 2.1% and the 21% U.S. federal statutory expense rate reflects state income taxes, foreign income taxes, the effect of certain permanent differences, and a full valuation allowance against net deferred tax assets.

The ~~Company believes~~valuation allowance primarily resulted from not having sufficient income from deferred tax liability reversals in the appropriate future periods to support the realization of certain deferred tax assets. Based on the estimated reversal patterns of the Company’s deferred tax assets and liabilities, it is more likely than not that the Company will not realize the federal, state and ~~state net~~certain foreign deferred tax assets ~~will~~ ~~not~~ ~~be fully realized. In assessing the realizability~~generated as there is insufficient projected income from reversals of deferred tax ~~assets, the Company’s management considers whether it is more likely than~~ ~~not~~ that some portion or all of our deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. A valuation allowance is recorded for loss carryforwards and other deferred tax assets where it is more likely than ~~not~~ ~~that such deferred tax assets will~~ ~~not~~ ~~be realized.~~liabilities. Accordingly, the Company continues to maintain a full valuation allowance against all of U.S. and certain foreign net deferred tax assets as of ~~October~~July 3, ~~2021~~2022. ~~The Company continues to maintain a full valuation allowance against net federal, state and certain foreign deferred tax assets until there is sufficient evidence to support recoverability~~

Table of ~~the Company’s deferred tax assets.~~

Contents

The Company had 0 unrecognized tax benefits as of ~~October~~July 3, ~~2021~~2022 and January ~~3, 2021~~2, 2022 which would affect the Company's effective tax rate. The Company does not anticipate any material changes to its unrecognized tax benefits during the next 12 months.

Accrued interest and penalties related to unrecognized tax benefits are recognized as part of the income tax provision in the condensed consolidated statements of operations.

The Company is subject to U.S. federal income tax as well as income taxes in many U.S. states and foreign jurisdictions in which the Company operates. The U.S. tax years from 1999 forward remain effectively open to examination due to the carryover of unused net operating losses and tax credits.

~~Under the Tax Reform Act of~~ ~~1986,~~ ~~the amount of and the benefit from net operating loss carryforwards and credit carryforwards~~ ~~may~~ ~~be impaired or limited in certain circumstances. Events which~~ ~~may~~ ~~restrict utilization of a company's net operating loss and credit carryforwards include, but are~~ ~~not~~ ~~limited to, certain ownership change limitations as defined in Internal Revenue Code Section~~ ~~382~~ ~~and similar state provisions. In the event the Company has had a change of ownership, utilization of carryforwards could be restricted to an annual limitation. The annual limitation~~ ~~may~~ ~~result in the expiration of net operating loss carryforwards and credit carryforwards before utilization.~~

~~The Company has~~ ~~not~~ undertaken a study to determine if its net operating losses are limited. In the event the Company previously experienced an ownership change, or should experience an ownership change in the future, the amount of net operating losses and research and development credit carryovers available in any taxable year could be limited and ~~may~~ ~~expire unutilized.~~

On ~~March 27, 2020,~~ the United States enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) as a result of the Coronavirus pandemic. The Act includes provisions relating to loan programs for small businesses ("Paycheck Protection Program" or "PPP"), refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, net operating loss carryback periods, alternative minimum tax credit refunds, modifications of the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company applied for and received ~~$1.2M~~ ~~of the PPP loan in~~ Q2~~2020~~ ~~and the amount was utilized on qualified business expenses under the guidance of PPP. On~~ ~~December 27, 2020,~~ ~~the President signed the Consolidated Appropriations Act~~ ~~2021~~ (the "Bill") into law. The Bill confirms the business expenses paid out of PPP loans maybe deducted for federal income tax purposes and the borrower's tax basis and other attributes of the borrower's assets will ~~not~~ ~~be reduced as a result of the loan forgiveness. The Company applied for the loan forgiveness and the application was approved by the lender on~~ ~~January 26, 2021.~~ ~~The loan was reclassified to gain on forgiveness of debt in~~ Q1~~2021~~ ~~for GAAP and is~~ ~~not~~ ~~taxable for federal purposes according to the CARES Act.~~

~~California has issued specific guidance regarding its conformity to the CARES Act.~~ No ~~provisions are expected to have a material impact on the Company, except for that under Assembly Bill~~ 80 ~~("AB~~ ~~80"~~~~), which was signed into law on~~ ~~April 29, 2021,~~ ~~the business expenses paid out of the PPP loan is~~ ~~not~~ ~~deductible for publicly-traded companies for California tax purposes.~~

On ~~June 29, 2020,~~ ~~California Governor Gavin Newsom signed Assembly Bill~~ 85 ~~("AB~~ ~~85"~~) into law, which temporarily suspends net operating loss deductions for most businesses and limits certain general business credits. These provisions will be applied retroactively to tax years beginning on or after ~~January 1, 2020~~ ~~through~~ ~~December 31, 2022.~~ ~~However, the law provides for a small business exemption for taxpayers with income subject to tax under~~ $1 ~~million. The Company has evaluated the current legislation and does~~ ~~not~~ ~~anticipate AB~~ 85 ~~to have a material impact on its financial statements.~~

On ~~December 18, 2019,~~ ~~the FASB issued new guidance ASU~~ ~~2019~~-12 ~~that simplifies the accounting for income taxes to reduce complexity in accounting standards which the Company adopted on~~ ~~January 4, 2021.~~ ~~The majority of the key provisions of the ASU~~ ~~2019~~-12 ~~does~~ ~~not~~ ~~have a material impact on the Company's consolidated financial statements.~~

~~We considered the majority of our non-U.S. subsidiaries’ undistributed earnings to be permanently reinvested. Therefore~~ no ~~U.S. or foreign income taxes have been recorded on the permanently reinvested amount as of~~ ~~July 4, 2021.~~ ~~Due to potential restructuring plans in India, there~~ ~~may~~ ~~be a~~ ~~one~~~~-time distribution in~~ ~~2021.~~ ~~As a result, we have recorded withholding taxes of approximately $125,000 on the potential~~ ~~one~~~~-time distribution. However, the rest of our foreign subsidiaries’ earnings continue to be permanently reinvested with~~ no ~~deferred tax liabilities necessary.~~

~~Table of Contents~~

Note 109 — Information Concerning Product Lines, Geographic Information and Revenue Concentration

The Company identifies its business segment based on business activities, management responsibility and geographic location. For all periods presented, the Company operated in a single reportable business segment.

The following is a breakdown of revenue by product ~~line~~family (in thousands):


	*Three Months Ended*				*Six Months Ended*
	*July 3, 2022*		*July 4, 2021*		*July 3, 2022*		*July 4, 2021*
New products	$	3,131	$	1,262	$	6,581	$	2,337
Mature products		1,410		1,620		2,056		2,785
Total revenue	$	4,541	$	2,882	$	8,637	$	5,122

Three Months Ended

Nine Months Ended

October 3,

September 27,

October 3,

September 27,

2021

2020

2021

2020

New products
$ 2,758 $ 639 $ 5,095 $ 1,945
Mature products
1,100 1,141 3,885 4,189
Total revenue
$ 3,858 $ 1,780 $ 8,980 $ 6,134

~~Note:~~ New products ~~include products and related~~revenue consists of revenues ~~for all~~from the sale of hardware products manufactured on 180 nanometer or smaller semiconductor processes, eFPGA ~~IP license, Quick AI~~intellectual property licenses, professional services, and QuickAI and SensiML AI software as a service (“SaaS”) revenue. Mature products include all products produced on semiconductor processes larger than 180 ~~nanometer and includes related royalty revenue.~~nanometer.

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

Three Months Ended

Nine Months Ended

October 3,

September 27,

October 3,

September 27,

2021

2020

2021

2020

Device sales
$ 2,858 $ 1,766 $ 7,830 $ 6,002
IP license and other services
1,000 14 1,150 132
Total revenue
$ 3,858 $ 1,780 $ 8,980 $ 6,134

	*Three Months Ended*				*Six Months Ended*
	*July 3, 2022*		*July 4, 2021*		*July 3, 2022*		*July 4, 2021*
Hardware products	$	1,464	$	1,069	$	3,299	$	2,074
eFPGA IP		1,617		150		3,188		150
SaaS		50		43		94		113
New products revenue	$	3,131	$	1,262	$	6,581	$	2,337

~~Note: Device~~eFPGA IP revenue ~~includes new product revenues~~was $1.6 million and ~~mature product revenues, except~~$3.2 million for the three and six months ended July 3, 2022. eFPGA IP ~~License~~revenue, consisting of intellectual property license revenue and ~~other services.~~professional services revenue, was $1.5 million and $3.1 million for the three and six months ended July 3, 2022, respectively, and $23 thousand for the three and six months ended July 4, 2021, and IP revenue was $0.1 million for the three and six months ended July 3, 2022 and $125 thousand for the three and six months ended July 4, 2021. Contract liabilities related to professional services revenue of $0 and $0.3 million and were included in deferred revenue on the consolidated balance sheets as of July 3, 2022 and January 2, 2022, respectively.

We derive revenue from sales to customers located in North America, Europe and Asia Pacific.

North America revenue from the United States was $3.0 million, or 67% of total revenue, and $5.5 million, or 63% of total revenue for the three and six months ended July 3, 2022, respectively. North America revenue from the United States was $0.6 million, or 19% of total revenue, and $1.8 million, or 35% of total revenue for the three and six months ended July 4, 2021, respectively.

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

Three Months Ended

Nine Months Ended

October 3,

September 27,

October 3,

September 27,

2021

2020

2021

2020

Asia Pacific (1) (4)
$ 763 $ 320 $ 2,440 $ 1,505
North America (2)
2,605 1,087 4,429 3,321
Europe (3)
490 373 2,111 1,308
Total revenue
$ 3,858 $ 1,780 $ 8,980 $ 6,134

	Three Months Ended				Six Months Ended
	July 3, 2022		July 4, 2021		July 3, 2022		July 4, 2021
Asia Pacific	$	840	$	1,075	$	2,331	$	1,828
North America		3,082		565		5,515		1,824
Europe		619		1,242		791		1,470
Total revenue	$	4,541	$	2,882	$	8,637	$	5,122

⁽¹⁾

~~Asia Pacific includes revenue from Japan of~~ ~~$739~~~~,000,~~ ~~or 19% of total revenue and $271,000 or 15% of total revenue for the~~ ~~three~~ ~~months ended~~ ~~October 3, 2021~~ ~~and~~ ~~September 27, 2020~~~~, respectively. For the~~ ~~nine~~ ~~months ended~~ ~~October 3, 2021~~ ~~and~~ ~~September 27, 2020~~~~, revenue from Japan~~ ~~was $2.4 million, or 26% of total~~ ~~revenue, and $1.4 million, or 23% of total revenue, respectively.~~

⁽²⁾	~~North America includes revenue from the United States of~~ ~~$2.6~~ ~~million or 67% of total revenue, and $1.1 million, or 61% of total revenue, for the~~ ~~three~~ ~~months ended~~ ~~October 3, 2021~~ ~~and~~ ~~September 27, 2020~~~~, respectively. For the~~ ~~nine~~ ~~months ended~~ ~~October 3, 2021~~ ~~and~~ ~~September 27, 2020~~ ~~revenue from the United States was~~ ~~$4.4~~ ~~million, or 49% of total revenue, and $3.3 million, or 54% of total revenue, respectively.~~
(3)	~~Europe includes revenue from United Kingdom of $273,000, or 7% of total revenue and $211,000 or 12% of total revenue for the~~ ~~three~~ ~~months ended~~ ~~October 3, 2021~~ ~~and~~ ~~September 27, 2020~~ ~~, respectively. For the~~ ~~nine~~ ~~months ended~~ ~~October 3, 2021~~ ~~and~~ ~~September 27, 2020~~~~, revenue from United Kingdom of $1,379,000, or 15% of total revenue, and $586,000 or 10% of total revenue, respectively.~~
(4)	~~Certain prior period amounts have been reclassified to conform to current period presentation.~~

~~The following distributors and customers accounted for~~ ~~10%~~ ~~or more of the Company's revenue for the periods presented:~~

Three Months Ended

Nine Months Ended

October 3,

September 27,

October 3,

September 27,

2021

2020

2021

2020

Distributor "A"
12 % 22 % 13 % 29 %
Distributor "C"
* 20 % 12 % 18 %
Distributor "E"
17 % 13 % 24 % 19 %
Customer "B"
* 10 % * 12 %
Customer "E"
* * 14 % *
Customer "F"
17 % 13 % 24 % 19 %
Customer "K"
* 12 % * *
Customer "N"
25 % 16 % 15 % *
Customer "O"
25 % * 11 % *

* Represents less than ~~10%~~ ~~of revenue as of the dates presented.~~

1913

Table of Contents

The following distributors and customers accounted for 10% or more of the Company's revenue for the periods presented:

	Three Months Ended						Six Months Ended
	July 3,			July 4,			July 3,			July 4,
	2022			2021			2022			2021
Distributor "A"		15	%		14	%		13	%		13	%
Distributor "C"		*			*			*			16	%
Distributor "E"		11	%		29	%		20	%		29	%
Customer "E"		11	%		*			*			20	%
Customer "F"		11	%		29	%		*			29	%
Customer "N"		29	%		*			23	%		*
Customer "O"		16	%		*			21	%		*
Customer "P"		*			*			11	%		*

* Represents less than 10% of revenue as of the dates presented.

The following distributors and customers accounted for 10% or more of the Company's accounts receivable as of the dates presented:

	*~~October 3,~~*			*~~January 3,~~*
	*~~2021~~*			*~~2021~~*
~~Distributor "A"~~		12	%		*
~~Distributor "E"~~		18	%		*
~~Distributor "J"~~		41	%		*
~~Customer "O"~~		21	%		*
~~Customer "P"~~		*			67	%
~~Customer "Q"~~		*			10	%

	*July 3,*			*January 2,*
	*2022*			*2022*
Distributor "A"		13	%		42	%
Distributor "C"		*			17	%
Distributor "E"		*			22	%
Distributor "J"		36	%		*
Customer "O"		29	%		10	%

* Represents less than 10% of accounts receivable as of the dates presented.

Note 1110 — Commitments and Contingencies

Commitments

The Company's manufacturing suppliers require the forecast of wafer starts several months in advance. The Company is required to take delivery of and pay for a portion of this forecasted wafer volume. As of ~~October~~July 3, ~~2021~~~~, and~~ ~~January 3, 2021~~2022, the Company had ~~$632,000 and $60,000, respectively,~~$0.6 million of outstanding commitments for the purchase of wafer ~~and finished goods~~ inventory.

The Company has purchase obligations with certain suppliers for the purchase of other goods and services entered into in the ordinary course of business. As of ~~October~~July 3, ~~2021~~2022, total outstanding purchase obligations for other goods and services were ~~$1.0~~$1.2 million due within the next twelve months.

Litigation

From time to time, the Company may become involved in legal actions arising in the ordinary course of business including, but not limited to, intellectual property infringement and collection matters. Absolute assurance cannot be given that any such third party assertions will be resolved without costly litigation; in a manner that is not adverse to the Company’s financial position, results of operations or cash flows; or without requiring royalty or other payments which may adversely impact gross profit. ~~As of~~ ~~October 3, 2021~~~~, the Company was~~ ~~not~~ ~~involved in any litigation.~~

~~India Transfer Pricing Notice~~

On ~~January 27, 2021,~~ the Company received an order from the Income Tax Department of the Ministry of Finance in India (the "DRP, or "the Department") disputing the transfer pricing rate the Company used for Assessment Years ~~2017~~-~~18,~~ ~~the result of which~~ ~~may~~ ~~affect later years. It is the intention of the Company to appeal such order as the rate requested by the government of India is~~ ~~not~~ ~~representative of the results of operations of the company, as well as other factors. In addition, on~~ ~~April 30, 2021,~~ the Company filed an appeal with the DRP, citing various issues with the Department's calculations and choice of comparable entities used to arrive at its initial assessment. A hearing before the DRP was held on ~~October 7, 2021,~~ ~~subsequent to the end of the Company's~~ ~~third~~ ~~quarter of fiscal~~ ~~2021.~~ ~~Based on the facts presented, the Panel is expected to adjudicate the case. The due date for closure of these appeals is~~ ~~December 31, 2021~~ ~~and it is expected that the Panel will pass its orders before this date. The Company is in the process of evaluating the effect such order~~ ~~may~~ ~~have on its foreign tax provision. Such effect, if any, would be to the tax provision and amounts owed under taxes to foreign jurisdictions only.~~

Note 1211 — Subsequent Events

eFPGA Project Agreement

On ~~November 16, 2021,~~August 8, 2022, we executed an Agreement (the “Agreement”) with a new customer to develop an eFPGA product in accordance with the ~~Company entered into a Fourth Amendment (the “Fourth Amendment”)~~customer’s specifications. Under the terms of the Agreement, we will be paid fees of $6.9 million for performing the work over an approximately 12-month period from the execution date of the Agreement. Upon successful performance, the Agreement allows for the customer to extend the ~~Amended and Restated Loan Agreement with Heritage Bank originally entered into on~~ ~~December 21, 2018 (~~scope of work to tens of millions of dollars over the ~~"Amended and Restated Loan Agreement"). The Fourth Amendment extended the loan maturity date through~~ ~~December 31, 2023.~~span of multiple years.

2014

Table of Contents

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The following Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as information contained in ~~“Risk Factors”~~“Risk Factors” in Part II, Item1A and elsewhere in this Quarterly Report on Form10-Q, contain ~~“forward-looking statements”~~“forward-looking statements” within the meaning of Section27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended. We intend that these forward-looking statements be subject to the safe harbor created by those provisions. Forward-looking statements are generally written in the future tense and/or are preceded by words such as ~~“will,~~“will,” ~~“may,~~“may,” ~~“should,~~“should,” ~~“forecast,~~“forecast,” ~~“could,~~“could,” ~~“expect,~~“expect,” ~~“suggest,~~“suggest,” ~~“believe,~~“believe,” ~~“anticipate,~~“anticipate,” ~~“intend,~~“intend,” ~~“plan,~~“plan,” "future," "potential," "target," "seek," "continue," "if" or other similar words. ~~Forward-looking~~

The forward-looking statements contained in the Quarterly Report include statements regarding our strategies as well as (1) our revenue levels, including the commercial success of our solutions and new products, (2)the conversion of our design opportunities into revenue, (3)our liquidity,(4) our gross profit and breakeven revenue level and factors that affect gross profit and the break-even revenue level, (5)our level of operating expenses, (6) our research and development efforts, (7)our partners and suppliers, (8)industry and market trends, (9) our manufacturing and product development strategies and (10) our competitive position.

The following discussion should be read in conjunction with the attached ~~Unaudited Condensed Consolidated Financial Statements~~unaudited condensed consolidated financial statements and notes thereto, and with our audited consolidated financial statements and notes thereto for the fiscal year ended January ~~3, 2021,~~2, 2022, found in our Annual Report on Form10-K filed with the Securities and Exchange Commission ~~(“SEC”~~(“SEC”) on March ~~23, 2021.~~22, 2022. Although we believe that the assumptions underlying the forward-looking statements contained in this Quarterly Report are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that such statements will be accurate. The risks, uncertainties and assumptions referred to above that could cause our results to differ materially from the results expressed or implied by such forward-looking statements include, but are not limited to, those discussed under the heading ~~“Risk Factors”~~“Risk Factors” in Part II, Item 1A hereto and the risks, uncertainties and assumptions discussed from time to time in our other public filings and public announcements. All forward-looking statements included in this document are based on information available to us as of the date hereof. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. Furthermore, past performance in operations and share price is not necessarily indicative of future performance. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that may arise after the date of this Quarterly Report on Form 10-Q.

Overview

We develop low power, multi-core semiconductor platforms and IP for AI, voice and sensor processing. The solutions include an eFPGA for hardware acceleration and pre-processing, and heterogeneous multi-core SoCs that integrate eFPGA with other processors and peripherals. The SensiML Analytics Toolkit from our ~~recently acquired~~ wholly owned subsidiary, SensiML completes the “full stack” end-to-end 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 ~~mobile, wearable, hearable, consumer, industrial, edge~~Consumer/Industrial IoT, Consumer electronics, Military, Aerospace and ~~endpoint IoT~~Defense applications.

Our new products include our EOS™, QuickAI™, SensiML Analytics Studio, ArcticLink® III, PolarPro®3, PolarPro II, PolarPro, and Eclipse II products (which together comprise our new product 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, we have an IP business that licenses our eFPGA technology for use in other semiconductor companies SoCs. We began delivering our eFPGA IP product ArcticPro™ in 2017, which is included in the new product revenue category. Through the acquisition of SensiML, we now have an IoT AI software platform that includes 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 product revenue category. Inclusive of one pending, patent application disclosed in our fiscal 2021 annual report, at the end of the second quarter of fiscal 2022 we had a total of five patent applications pending.

Our semiconductor solutions typically fall into one of three categories: Sensor Processing, Display ~~and Visual Enhancement,~~ and Smart Connectivity. Our solutions include a unique combination of our silicon platforms, IP cores, software drivers, and in some cases, firmware and application software. All of our silicon platforms are standard devices and must be programmed to be effective in a system. Our IP that enables always-on context-aware sensor applications includes our Flexible Fusion Engine, our Sensor Manager and Communications Manager technologies as well as IP that (i) improves multimedia content, such as our Visual Enhancement Engine, ~~or VEE,~~("VEE"), technology, and Display Power Optimizer, ~~or DPO,~~("DPO"), technology; and (ii) implements commonly used mobile system interfaces, such as Low Voltage Differential Signaling, ~~or LVDS,~~("LVDS"), Mobile Industry Processor Interface, ~~or MIPI,~~("MIPI"), and Secure Digital Input Output, ~~or SDIO.~~("SDIO").

~~Table of Contents~~

Through the acquisition of SensiML, our core IP also includes the SensiML AI Toolkit that enables OEMs to develop AI software for a broad array of resource-constrained time-series sensor endpoint applications. These include a wide range of consumer and industrial sensing applications.

Table of Contents

We also work with ~~mobile~~ processor manufacturers, sensor manufacturers, and voice recognition, sensor fusion and context awareness algorithm developers in the development of reference designs. Through reference designs that incorporate our solutions, we believe mobile processor manufacturers, sensor manufacturers, and sensor and voice algorithm companies can expand the available market for their respective products. 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, ~~or ODMs,~~("ODMs"), we can amortize our Research and Development, or ("R~~&D,~~&D"), investment over that set of OEMs or ODMs. 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.

In addition to working directly with our customers, we partner with other companies that are experts in certain technologies to develop additional IP, reference platforms and system software to provide application solutions, particularly in the area of hardware acceleration for AI-type applications. We also work with mobile processor and communications semiconductor device manufacturers and companies that supply sensor, algorithms and applications. For our sensor processing solutions, we collaborate with sensor manufacturers to ensure interface compatibility. We also collaborate with sensor and voice/audio software companies, helping them optimize their software technology on our silicon platforms in terms of performance, power consumption and user experience.

Our ArcticPro eFPGA IP are currently developed on 65nm, 40nm and 22nm process nodes. 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. For our eFPGA strategy, we work with semiconductor manufacturing partners to ensure our eFPGA IP is proven for a given foundry and process node before it is licensed to a SoC company.

In order to grow our revenue from its current level, we depend upon increased revenue from our new products including existing new product platforms, eFPGA IP and platforms currently in development. We expect our business growth to be driven mainly by our silicon solutions, eFPGA IP and SensiML AI Software. 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 licensing in fiscal year ~~2021.~~2022.

We continue to seek to expand our revenue, including pursuing high-volume sales opportunities in our target market segments, by providing solutions incorporating IP, or industry standard interfaces. Our industry is characterized by intense price competition and by lower margins as order volumes increase. While winning large volume sales opportunities will increase our revenue, we believe these opportunities may decrease our gross profit as a percentage of revenue.

During the ~~third~~second quarter of ~~2021,~~2022, we generated total revenue of ~~$3.9~~$4.5 million, ~~which represents~~ an increase of ~~34%~~11% compared to the prior quarter, and an increase of ~~117%~~58% compared to the same quarter last year. Our new product revenue in the ~~third~~second quarter was ~~$2.8~~$3.1 million, ~~which represents an increase~~a decrease of ~~119%~~9% from the prior quarter and an increase of ~~332%~~148% from the ~~third~~second quarter of ~~2020,~~2021. The increase in new product revenue was primarily driven by ~~our IP license~~professional services revenue ~~amounting to $1.0~~of $1.6 million in the current quarter. Our mature product revenue was ~~$1.1~~$1.4 million in the ~~third~~second quarter of ~~2021, which was a decrease~~2022, an increase of ~~32%~~118% compared to the prior quarter, and a decrease of 4%13% compared to the ~~third~~second quarter of ~~2020.~~2021. We expect our mature product revenue to continue to fluctuate over time.

~~Table of Contents~~

We devote substantially all of our development, sales and marketing efforts to our new sensor processing solutions using our EOS^TM S3 platforms, derivative products based on software-driven features, development of additional new products and solution platforms, our new eFPGA IP ~~licensing~~licensing and QuickAI initiatives. Overall, we reported a net loss of ~~$1.3~~$0.5 million for the ~~third~~second quarter of ~~2021,~~2022, a decrease of ~~38%~~55% compared with the prior quarter, and a decrease of ~~38%~~75% compared with the ~~third~~second quarter of ~~2020.~~ 2021.

We have experienced net losses in the recent years and expect losses to continue through at least fiscal year ~~2021~~2022 as we continue to develop new products, applications and technologies. Whether we can achieve cash flow levels sufficient to support our operations cannot be accurately predicted. Unless such cash flow levels are achieved in addition to the proceeds we received from our recent sale of our equity securities, we may need to borrow additional funds or sell debt or equity securities, or some combination thereof, to provide funding for our operations, and such additional funding may not be available on commercially reasonable terms, or at all.

~~COVID-19 Response~~

~~The COVID-19~~There have been no material changes due to the impact of the Covid-19 pandemic ~~and its effects~~ on our business in fiscal 2020, the three quarters of fiscal 2021, and potential effects on the remainder of fiscal 2021 and beyond remain uncertain. There have been further restrictions by the governmental authorities as a result of a surge in COVID-19 cases during the winter of 2020 and continuing into fiscal 2021, as a result of variant strains of COVID-19 amid uneven progress toward vaccination. These restrictions and other impacts from COVID-19 could cause further disruptions or restrictions on our 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. Additionally, multiple countries have imposed and may further impose restrictions on business operations and movement of people and products to limit the spread of COVID-19. This might cause delays in production or delivery of components or raw materials that ~~are part of our global supply chain. If COVID-19 cases surge and we experience more pronounced disruptions~~disclosed in our ~~operations,~~most recently filed Annual Report. Our most recent Annual Report on Form 10-K for the ~~Company may experience constrained supply or curtailed demand that may materially adversely impact its~~year ended January 2, 2022 as filed with the SEC on March 22, 2022 provides additional information about our business and ~~results of~~ operations.

The extent of the impact of COVID-19 on our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, restrictions on travel, transportation and other containment measures, the success and availability of the recent vaccine, our compliance with these measures and the impact on our employees, customers, contractors and supply chain, all of which are uncertain and cannot be predicted.

~~Restructuring~~

In January 2020, we implemented a restructuring plan to lower annual operating expenses. The restructuring plan was approved by our Board of Directors on January 24, 2020. Pursuant to the restructuring plan, we recorded $624,000 restructuring costs during the nine months ended September 27, 2020, consisting primarily of employee severance related costs and facilities costs. There were no restructuring charges incurred for nine months ended October 3, 2021.

~~Our employees and customers~~

Our top priority during the ongoing COVID-19 pandemic remains the health and safety of our employees and their families, as well as our customers. As global governments institute restrictions on commercial operations, we are working to ensure our compliance while also maintaining business continuity for operations.

Most of our personnel continue to work from home except few personnel, who are required for minimum operations. We only allow employees in our facilities who are essential to the facilities’ operations under best practices guidelines on maintaining physical distancing, utilizing enhanced cleaning protocols and usage of personal protective equipment.

We are committed to our customers to enable the support they need to continue providing vital services and tools. Our global offices remain operational to meet customer needs during the pandemic in compliance with the orders and restrictions imposed by local authorities in each of our locations, and we are working with our customers to meet their specific shipment needs. While the pandemic has created delays on the inbound supply chain at our partners and our own facilities and both inbound and outbound logistical challenges, we have been able to identify alternative solutions such that none of the issues have had a material impact on our ability to fulfill demand.

Critical Accounting Policies and Estimates

The methodologies, estimates and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our ~~Unaudited Condensed Consolidated Financial Statements.~~unaudited condensed consolidated financial statements. The SEC has defined critical accounting policies as those that are most important to the portrayal of our financial condition and results of operations and require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our critical policies include revenue recognition, and determination of the Stand-Alone Selling Price ("SSP") for certain distinct performance obligations (such as for IP licensing and professional services contracts), goodwill and intangible assets, valuation of inventories including identification of excess quantities and product obsolescence, ~~valuation of investments,~~allowance for doubtful accounts, valuation of long-lived assets, valuation of goodwill, capitalized internal-use software and related amortizable lives and intangibles related to the acquisition of SensiML, including the estimated useful lives of acquired intangible assets,leases, measurement of stock-based compensation, and ~~estimation of accrued liabilities.~~accounting for income taxes. We believe that we apply judgments and estimates in a consistent manner and that this consistent application results in our consolidated financial statements and accompanying notes that fairly represent all periods presented. However, any factual errors or errors in these judgments and estimates may have a material impact on our financial statements. During the three and ~~nine~~six months ended ~~October~~July 3, ~~2021,~~2022, there were no changes in our critical accounting policies from our disclosure in our Annual Report on Form 10-K for the fiscal year ended January ~~3, 2021,~~2, 2022, filed with the SEC on March 23, 2021, except for the new accounting standards adopted in the first quarter of 2021 as described in Note 2 to the Unaudited Condensed Consolidated Financial Statements as of and for the three and nine months ended October 3, 2021 filed herewith. For a discussion of critical accounting policies and estimates, please see Item 7 in our Annual Report on Form 10-K for the fiscal year ended January 3, 2021, filed with the SEC on March 23, 2021.22, 2022.

2316

Table of Contents

Results of Operations

The following table sets forth the percentage of revenue for certain items in our unaudited condensed consolidated statements of operations for the periods indicated:

Three Months Ended

Six Months Ended

July 3, 2022

July 4, 2021

July 3, 2022

July 4, 2021

Revenue
100 % 100 % 100 % 100 %
Cost of revenue
44 % 49 % 42 % 49 %
Gross profit
56 % 51 % 58 % 51 %
Operating expenses:

Research and development
26 % 57 % 29 % 69 %
Selling, general and administrative
44 % 63 % 48 % 73 %
Loss from operations
(14 )% (69 )% (19 )% (91 )%

Interest expense
— % (1 )% — % (1 )%
Gain on forgiveness of debt
— % — % — % 23 %
Interest income and other income (expense), net
3 % (2 )% — % (1 )%
Loss before income taxes
(11 )% (71 )% (19 )% (70 )%
Provision for income taxes
1 % — % 1 % 3 %
Net loss
(12 )% (71 )% (20 )% (73 )%

Three Months Ended

Nine Months Ended

October 3,

September 27,

October 3,

September 27,

2021

2020

2021

2020

Revenue
100 % 100 % 100 % 100 %
Cost of revenue
29 % 48 % 41 % 50 %
Gross profit
71 % 52 % 59 % 50 %
Operating expenses:

Research and development
47 % 78 % 60 % 88 %
Selling, general and administrative
57 % 83 % 66 % 82 %
Restructuring costs
— % 6 % — % 10 %
Loss from operations
(33 )% (115 )% (66 )% (130 )%

Interest expense
(1 )% (2 )% (1 )% (5 )%
Gain on forgiveness of debt
— % — % 13 % — %
Interest income and other income (expense), net
(0 )% 2 % (1 )% 2 %
Loss before income taxes
(34 )% (115 )% (55 )% (133 )%
Provision for (benefit from) income taxes
(1 )% 1 % 2 % — %
Net loss
(33 )% (116 )% (56 )% (133 )%

~~Note: Insignificant percentages are rounded to zero percentage (—%) for disclosure~~

Three Months Ended ~~October~~July 3, ~~2021~~2022 Compared to Three Months Ended ~~September 27, 2020~~July 4, 2021

Revenue

The table below sets forth the changes in revenue ~~for~~in the three months ended ~~October~~July 3, ~~2021, as~~2022 compared to the three months ended ~~September 27, 2020~~July 4, 2021 (in thousands, except percentage data):

Three Months Ended

Three Months Ended

October 3, 2021

September 27, 2020

Change

July 3, 2022

July 4, 2021

Change

% of Total

% of Total

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

Amount

Revenues

Amount

Revenues

Amount

Percentage

New products
$ 2,758 71 % $ 639 36 % $ 2,119 332 % $ 3,131 69 % $ 1,262 44 % $ 1,869 148 %
Mature products
1,100 29 % 1,141 64 % (41 ) (4 )% 1,410 31 % 1,620 56 % (210 ) (13 )%
Total revenue
$ 3,858 100 % $ 1,780 100 % $ 2,078 117 % $ 4,541 100 % $ 2,882 100 % $ 1,659 58 %

Note: For all periods presented, - New products include ~~all~~hardware products and related revenues manufactured on 180 nanometer or smaller semiconductor processes, ~~eFPGA IP~~intellectual property license, ~~and related revenue,~~professional services, QuickAI and SensiML AI ~~SaaS~~software as a service (SaaS) revenues. Mature products include all products produced on semiconductor processes larger than 180 ~~nanometer and includes related royalty revenue.~~nanometer.

Product revenue for the ~~third~~second quarter of 2022 compared to the second quarter of 2021 ~~compared to the third quarter of 2020~~ increased ~~by $2.1~~$1.7 million. The ~~net~~$1.9 million increase ~~of $2.1 million~~ in ~~the revenue of~~ new products revenue was ~~primarily due to an increase of $1.0 million related to eFPGA IP license revenue as well as increases of connectivity and sensor product revenue. The~~partially offset by a 13% net decrease ~~of 4%~~ in mature product revenue ~~compared to the third quarter of 2020 was due primarily to decrease~~from a reduction in ~~QuickRAM~~QECL and ~~other~~Eclipse Plus products, partially offset by an increase in ~~Eclipse and Eclipse Plus~~PASIC4 products.
New Product Revenue
The table below sets forth the changes in new product revenue in the three months ended July 3, 2022 compared to the three months ended July 4, 2021 (in thousands, except percentage data):

Three Months Ended

July 3, 2022

July 4, 2021

Change

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

Hardware products
$ 1,464 32 % $ 1,068 37 % $ 396 37 %
eFPGA IP
1,617 36 % 148 5 % 1,469 993 %
SaaS
50 1 % 46 2 % 4 9 %
Total new product revenue
$ 3,131 69 % $ 1,262 44 % $ 1,869 148 %
The $0.4 million increase in new hardware product revenue was primarily comprised of a $0.8 million increase smart connectivity products partially offset by a $0.4 million decrease in sensor revenue. eFPGA IP revenue increased $1.5 million, or 993%, as compared to the same quarter in the prior year. The increase in eFPGA IP revenue was primarily driven by an increase in professional services revenue of $1.5 million partially offset by a 2% decrease in IP revenue.

2417
Table of Contents

Gross Profit

The table below sets forth the changes in gross profit for the three months ended ~~October~~July 3, ~~2021 as~~2022 compared to the three ~~months~~month ended ~~September 27, 2020~~July 4, 2021 (in thousands, except percentage data):

Three Months Ended

Three Months Ended

October 3, 2021

September 27, 2020

Change

July 3, 2022

July 4, 2021

Change

% of Total

% of Total

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

Amount

Revenues

Amount

Revenues

Amount

Percentage

Revenue
$ 3,858 100 % $ 1,780 100 % $ 2,078 117 % $ 4,541 100 % $ 2,882 100 % $ 1,659 58 %
Cost of revenue
1,126 29 % 857 48 % 269 31 % 1,997 44 % 1,416 49 % 581 41 %
Gross profit
$ 2,732 71 % $ 923 52 % $ 1,809 196 % $ 2,544 56 % $ 1,466 51 % $ 1,078 74 %

In the ~~third~~second quarter of ~~2021,~~2022, gross profit increased ~~$1.8~~$1.1 million, or ~~196%~~74%, as compared to the same quarter in the prior year. ~~This~~The increase in gross profit reflects a 58% increased in revenue, primarily composed of an increase of $0.4 million in new product hardware revenue and an increase of $1.5 million in eFPGA IP revenue, partially offset by a $0.2 million decrease in mature product revenue. The net increase in revenue was partially offset by a $0.6 million increase in cost of revenues, primarily comprised of $0.8 million in costs related to eFPGA IP, and partially offset by a $0.2 million decrease in product cost standards. eFPGA IP revenue and costs related to eFPGA IP revenue were comprised eFPGA intellectual property license revenue and costs, respectively, and professional services revenue and costs, respectively.
Our semiconductor products have historically had long product life cycles and obsolescence has not been a significant factor in the valuation of inventories. However, as we continue to pursue opportunities in the mobile market and develop new solutions and products, our product life cycle will be shorter and the risk of obsolescence will increase. In general, our standard manufacturing lead times are longer than the binding forecasts we receive from customers.
Operating Expenses
The table below sets forth the changes in operating expenses for the three months ended July 3, 2022, compared to the three months ended July 4, 2021 (in thousands, except percentage data):

Three Months Ended

July 3, 2022

July 4, 2021

Change

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

R&D expense
$ 1,190 26 % $ 1,652 57 % $ (462 ) (28 )%
SG&A expense
1,981 44 % 1,794 62 % 187 10 %
Total operating expenses
$ 3,171 70 % $ 3,446 120 % $ (275 ) (8 )%
Research and Development
Our R&D expenses consist primarily of personnel, overhead and other costs associated with System on Chip (SoC) and software development, programmable logic design, AI and eFPGA development. The $0.5 milliondecrease in R&D expenses in the second quarter of 2022, as compared to the second quarter of 2021, was primarily attributable to R&D costs allocable to cost of revenue related to eFPGA IP revenue, a reduction in amortization and depreciation, and in expensed software. These were partially offset by increases in salary and related expenses, higher recruiting expenses, increased printing expenses, consulting and other outside services. R&D costs allocable to cost of revenue related to eFPGA IP revenue included costs related to eFPGA intellectual property license revenue and professional services revenue.
Selling, General and Administrative
Our selling, general and administrative (SG&A) expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, administration, human resources and general management. The $0.2 millionincrease in SG&A expenses in the second quarter of 2022, as compared to the second quarter of 2021 was primarily attributable to increases in salary and related expenses, stock-based compensation expenses, legal expenses and occupancy costs, and accounting and audit expenses, partially offset by a decrease in selling expenses and consulting costs.
18
Table of Contents
Interest Expense and Interest Income and Other Income (Expense), Net
The table below sets forth the changes in interest expense and interest income and other income (expense), net, for the three months ended July 3, 2022, compared to the three months ended July 4, 2021 (in thousands, except percentage data):

Three Months Ended

Change

July 3,

July 4,

2022

2021

Amount

Percentage

Interest expense
$ (22 ) $ (32 ) $ 10 (31 )%
Interest income and other income (expense), net
142 (45 ) 187 (416 )%
Total interest income and other income (expense), net
$ 120 $ (77 ) $ 197 (256 )%
Interest expense relates primarily to our revolving line of credit facility. Interest income and other income (expense), net, relates to the interest earned on our money market accounts and foreign exchange gain or losses recorded. Changes in interest expense related for our revolving loan relate to the variability and timing of our outstanding loan balance. Interest expense for the second quarter of this year as compared to the same period in the prior year decreased approximately $10 thousand, which reflected a reduction in interest expense from finance lease liabilities partially offset by an increase in interest rates on our revolving line of credit loan. Interest income and other income (expense), net, was a net income of approximately $0.1 million and a net expense of approximately $77 thousand for the three months ended July 3, 2022 and July 4, 2021, respectively. The increase in total interest income and other income (expense), net reflected an increase in net foreign exchange gains and in other income and a reduction in interest expense over the prior period presented.
Provision for Income Taxes
The table below sets forth the changes in the provisions for income taxes in the three months ended July 3, 2022, compared to the three months ended July 4, 2021 (in thousands, except percentage data):

Three Months Ended

Change

July 3,

July 4,

2022

2021

Amount

Percentage

Provision for income taxes
$ 17 $ 5 $ 12 240 %
The majority of the income tax expense for the three months ended July 3, 2022 and July 4, 2021 related to our foreign subsidiaries, which are cost-plus entities.
Six Months Ended July 3, 2022 Compared to Six Months Ended July 4, 2021
Revenue
The table below sets forth the changes in revenue for the six months ended July 3, 2022, compared to the six months ended July 4, 2021 (in thousands, except percentage data):

Six Months Ended

July 3, 2022

July 4, 2021

Change

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

New products
$ 6,581 76 % $ 2,337 46 % $ 4,244 182 %
Mature products
2,056 24 % 2,785 54 % (729 ) (26 )%
Total revenue
$ 8,637 100 % $ 5,122 100 % $ 3,515 69 %
Note: For all periods presented, New products include all products and related revenues manufactured on 180 nanometer or smaller semiconductor processes, eFPGA IP license, professional services, QuickAI and SensiML AI software as a service (SaaS) revenues. Mature products include all products produced on semiconductor processes larger than 180 nanometer.
Product revenue for the six months ended July 3, 2022, as compared to the six months ended July 4, 2021 increased $3.5 million. The increase in product revenue was comprised of a $4.2 million increase in new product revenue partially offset by a 26% decrease in mature product revenue.
19
Table of Contents
New Product Revenue
The table below sets forth the changes in new product revenue in the six months ended July 3, 2022 compared to the six months ended July 4, 2021 (in thousands, except percentage data):

Six Months Ended

July 3, 2022

July 4, 2021

Change

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

Hardware products
$ 3,299 38 % $ 2,074 40 % $ 1,225 59 %
eFPGA IP
3,188 37 % 148 3 % 3,040 2054 %
SaaS
94 1 % 115 2 % (21 ) (18 )%
Total new product revenue
$ 6,581 76 % $ 2,337 46 % $ 4,244 182 %
The $1.2 million increase in new hardware product revenue was primarily comprised of $1.0 million in higher connectivity product revenue, $1.0 million in higher display product revenue, partially offset by decrease a $0.7 million decrease in sensor product revenue. eFPGA IP revenue increased $3.0 million, or 2054%, as compared to the same period in the prior year, primarily driven by an increase in professional services. eFPGA IP revenue was comprised of eFPGA intellectual property license revenue and professional services revenue.
Gross Profit
The table below sets forth the changes in gross profit for the six months ended July 3, 2022, compared to the six months ended July 4, 2021 (in thousands, except percentage data):

Six Months Ended

July 3, 2022

July 4, 2021

Change

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

Revenue
$ 8,637 100 % $ 5,122 100 % $ 3,515 69 %
Cost of revenue
3,632 42 % 2,512 49 % 1,120 45 %
Gross profit
$ 5,005 58 % $ 2,610 51 % $ 2,395 92 %
Gross profit for the six months ended July 3, 2022, as compared to the six months ended July 4, 2021, increased $2.4 million, or 92%. The increase was primarily due to ~~the~~an increase revenue of $3.5 million or 69%. The increase in revenue was primarily composed of ~~117% including $1.0~~an increase of $1.2 million ~~related to IP License~~in new product revenue ~~with minimal associated cost and product mix in the third quarter as compared to last year,~~ and an increase in eFPGA IP revenue of ~~31%~~$3.1 million was partially offset a decrease of $0.7 million in mature product revenue. The increase in revenue was partially offset by an increase of $1.2 million in eFPGA IP cost of revenue, ~~as compared~~partially offset by a reduction in product cost of revenue due to ~~last year.~~the mix of products sold. eFPGA IP revenue and costs related to eFPGA IP revenue were comprised eFPGA intellectual property license revenue and costs, respectively, and professional services revenue and costs, respectively.

Our semiconductor products have historically had long product life cycles and obsolescence has not been a significant factor in the valuation of inventories. However, as we continue to pursue opportunities in the mobile market and develop new solutions and products, our product life cycle will be shorter and the risk of obsolescence will increase. In general, our standard manufacturing lead times are longer than the binding forecasts we receive from customers.

Operating Expenses

The table below sets forth the changes in operating expenses for the ~~three~~six months ended ~~October~~July 3, ~~2021, as~~2022, compared to the ~~three~~six months ended ~~September 27, 2020~~July 4, 2021 (in thousands, except percentage data):

Three Months Ended

Six Months Ended

October 3, 2021

September 27, 2020

Change

July 3, 2022

July 4, 2021

Change

% of Total

% of Total

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

Amount

Revenues

Amount

Revenues

Amount

Percentage

R&D expense
$ 1,807 47 % $ 1,380 78 % $ 427 31 % $ 2,523 29 % $ 3,539 69 % $ (1,016 ) (29 )%
SG&A expense
2,186 57 % 1,478 83 % 708 48 % 4,118 48 % 3,741 73 % 377 10 %
Restructuring costs
— — % 111 6 % (111 ) (100 )%
Total operating expenses
$ 3,993 104 % $ 2,969 167 % $ 1,024 34 % $ 6,641 77 % $ 7,280 142 % $ (639 ) (9 )%

Research and Development

Our ~~R&D~~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. ~~The $427,000 increase in~~ R&D expenses in the ~~third quarter of 2021,~~six months ended July 3, 2022, as compared to the ~~third quarter of 2020,~~six months ended July 4, 2021, decreased $1 million. The decrease in R&D expenses was primarily attributable to ~~an increase~~R&D costs allocable to cost of revenue in support of eFPGA IP and decreases in stock-based compensation costs and consulting services, partially offset increases in salary and related expenses, and amortization expense.
R&D costs allocable ~~expenses, partially offset by lower outside~~to cost of revenues in support of eFGPA IP included costs related to eFPGA intellectual property license revenue and professional services ~~and depreciation expenses due primarily to our restructuring in 2020 and to reductions in spending caused by the COVID -19 pandemic.~~
revenue.

Selling, General and Administrative

Our selling, general and administrative (SG&A) expenses consist primarily of personnel and related overhead costs for sales, marketing, finance, administration, human resources and general management. ~~The $708,000 increase in~~ SG&A expenses in the ~~third quarter of 2021,~~six months ended July 3, 2022, as compared to the ~~third quarter of 2020~~six months ended July 4, 2021, increased $0.4 million. The increase was primarily attributable to ~~outside legal and consulting costs,~~higher stock-based compensation expenses, legal fees and ~~occupancy~~accounting and audit expenses, outside services expenses, insurance costs, dues and subscriptions and director service fees, partially offset by ~~a decrease~~reductions in ~~salary and related costs.~~consulting expenses.

~~Restructuring~~
In January 2020, we implemented a restructuring plan to lower annual operating expenses. The restructuring plan was approved by our Board of Directors on January 24, 2020. Pursuant to the restructuring plan, we recorded restructuring costs of $0 in the third quarter of 2021 as compared to $111,000 in the third quarter of 2020. Restructuring costs consists primarily of employee severance-related costs. See Note 1 to the Unaudited Condensed Consolidated Financial Statements for details.

2520
Table of Contents

Interest Expense and Interest Income and Other Income (Expense), Net

The table below sets forth the changes in interest expense and interest income and other income (expense), net, for the ~~three~~six months ended ~~October~~July 3, ~~2021 as~~2022, compared to the ~~three~~six months ended ~~September 27, 2020~~July 4, 2021 (in thousands, except percentage data):

Three Months Ended

Change

October 3,

September 27,

2021

2020

Amount

Percentage

Interest expense
$ (35 ) $ (36 ) $ 1 (3 )%
Interest income and other income (expense), net
(7 ) 27 (34 ) (126 )%
Total interest income and other income (expense), net
$ (42 ) $ (9 ) $ (33 ) 367 %

Six Months Ended

Change

July 3,

July 4,

2022

2021

Amount

Percentage

Interest expense
$ (55 ) $ (64 ) $ 9 (14 )%
Gain on forgiveness of debt
— 1,192 (1,192 ) (100 )%
Interest income and other expense, net
19 (52 ) 71 (137 )%
$ (36 ) $ 1,076 $ (1,112 ) (103 )%

Interest expense relates primarily to our line of credit facility. Interest income and other income (expense), net, relates to the interest earned on our money market accounts and foreign exchange gain or losses recorded. Changes in interest expense related for our revolving loan relate to the variability and timing of our outstanding loan balance. Interest expense for the ~~third quarter of this year as~~six months ended July 3, 2022 compared to the same period in the ~~prior~~previous year remained fairly flat. For the three months ended October 3, 2021 interest income and other income (expense), net for this period was approximately ($7,000) as compared to $27,000 for the three months ended September 27, 2020
~~Provision for (Benefit from) Income Taxes~~
The table below sets forth the changes in the provisions for income tax for the three months ended October 3, 2021 as compared to the three months ended September 27, 2020 (in thousands, except percentage data):

Three Months Ended

Change

October 3,

September 27,

2021

2020

Amount

Percentage

Provision for (benefit from) income taxes
$ (21 ) $ 10 $ (31 ) (310 )%
~~The majority of the income tax expense for the quarter ended October 3, 2021 and September 27, 2020 relates to our foreign subsidiaries,~~declined $9 thousand, which ~~are cost-plus entities.~~
We are subject to U.S. federal income tax as well as income taxes in many U.S. states and foreign jurisdictions in which we operate. The U.S. tax years from 1999 forward remain effectively open to examination due to the carryover of unused net operating losses and tax credits.
26

~~Table of Contents~~
~~Nine Months Ended October 3, 2021 Compared to Nine Months Ended September 27, 2020~~
~~Revenue~~
~~The table below sets forth the changes in revenue for the nine months ended October 3, 2021, as compared to the nine months ended September 27, 2020 (in thousands, except percentage data):~~

Nine Months Ended

October 3, 2021

September 27, 2020

Change

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

New products
$ 5,095 57 % $ 1,945 32 % $ 3,150 162 %
Mature products
3,885 43 % 4,189 68 % (304 ) (7 )%
Total revenue
$ 8,980 100 % $ 6,134 100 % $ 2,846 46 %

Note: For all periods presented - New products include all products and related revenues manufactured on 180 nanometer or smaller semiconductor processes, eFPGA IP license and related revenues, QuickAI and SensiML AI SaaS revenues. Mature products include all products produced on semiconductor processes larger than 180 nanometer and includes related royalty revenue.
Product revenue for the nine months ended October 3, 2021 compared to the nine months ended September 27, 2020 increased by $2.8 million. The net increase of $3.2 million in the revenue of new products was primarily due to an increase in eFPGA IP License revenue of approximately $1.1 million, and increases in connectivity and sensor product revenue. The net decrease of $304,000 in mature product revenue compared to the nine months ended September 27, 2020 was due primarily to decreases in PASIC 3, QuickRAM, and other products, partially offset by increases in Eclipse and Eclipse Plus products.
~~Gross Profit~~
~~The table below sets forth the changes in gross profit for the nine months ended October 3, 2021 as compared to the nine months ended September 27, 2020 (in thousands, except percentage data):~~

Nine Months Ended

October 3, 2021

September 27, 2020

Change

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

Revenue
$ 8,980 100 % $ 6,134 100 % $ 2,846 46 %
Cost of revenue
3,638 41 % 3,092 50 % 546 18 %
Gross profit
$ 5,342 59 % $ 3,042 50 % $ 2,300 76 %
In the nine months ended October 3, 2021, gross profit was higher by $2.3 million or 76% as compared to the nine months ended September 27, 2020. This was primarily due to the increase revenue of $2.8 million or 46%, including the increase of IP License related revenue of $1.1 million with minimal associated costs, and product mix in the nine months of 2021, as compared to same period last year, partially offset by cost variances and write-downs of excess and obsolete inventories.
~~Our semiconductor products have historically had long product life cycles and obsolescence has not been~~reflected a significant factor in the valuation of inventories. However, as we continue to pursue opportunities in the mobile market and develop new solutions and products, our product life cycle will be shorter and the risk of obsolescence will increase. In general, our standard manufacturing lead times are longer than the binding forecasts we receive from customers.
27

~~Table of Contents~~
~~Operating Expenses~~
~~The table below sets forth the changes in operating expenses for the nine months ended October 3, 2021, as compared to the nine months ended September 27, 2020 (in thousands, except percentage data):~~

Nine Months Ended

October 3, 2021

September 27, 2020

Change

% of Total

% of Total

Amount

Revenues

Amount

Revenues

Amount

Percentage

R&D expense
$ 5,346 60 % $ 5,399 88 % $ (53 ) (1 )%
SG&A expense
5,927 66 % 5,022 82 % 905 18 %
Restructuring expenses
— — % 624 10 % (624 ) 100 %
Total operating expenses
$ 11,273 126 % $ 11,045 180 % $ 228 2 %
~~Research and Development~~
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 decreased slightly for the nine months ended October 3, 2021 as compared to the nine months ended September 27, 2020. The $53,000 decrease in R&D expenses in the nine months ended October 3, 2021 as compared to nine months ended September 27, 2020, was primarily attributable to decreases in salary and related expenses, outside services, occupancy costs and lower depreciation due primarily to restructuring in 2020 and to reductions in spending caused by the COVID-19 pandemic,interest expense from finance lease liabilities partially offset ~~primarily~~ by an increase in ~~stock-based compensation~~interest rates on our revolving line of credit loan. Interest income and ~~allocable expenses.~~
~~Selling, General and Administrative~~
~~Our selling, general and administrative (SG&A) expenses consist primarily of personnel and related overhead costs~~other expense, net, for ~~sales, marketing, finance, administration, human resources and general management. The $905,000 million increase in SG&A expenses in~~ the ~~nine~~six months ended ~~October~~July 3, ~~2021, as~~2022 compared to the nine months ended September 27, 2020 was primarily attributable to outside legal and consulting costs, stock-based compensation, offset by decreases in salary and related expenses, travel and entertainment expenses and allocable expenses.
~~Restructuring~~
In January 2020, we implemented a restructuring plan to lower annual operating expenses. The restructuring plan was approved by our Board of Directors on January 24, 2020. Pursuant to the restructuring plan, we recorded restructuring costs of $0same period in the ~~third quarter of 2021 as compared to $624,000~~previous year, increased $71 thousand, which primarily reflected an increase in the third quarter of 2020. Restructuring costs consists primarily of employee severance-related costs and facilities costs. See Note 1 to the Unaudited Condensed Consolidated Financial Statements for details.
28

~~Table of Contents~~
net foreign exchange gains. Interest ~~Expense and Interest Income and Other Income (Expense), Net~~
~~The table below sets forth the changes in interest~~ expense and interest income and other income (expense), net, for the ~~nine~~six months ended ~~October 3,~~July 4, 2021 ~~as compared to the nine months ended September 27, 2020 (in thousands, except percentage data):~~

Nine Months Ended

Change

October 3,

September 27,

2021

2020

Amount

Percentage

Interest expense
$ (99 ) $ (299 ) $ 200 (67 )%
Gain on forgiveness of debt
1,192 — 1,192 100 %
Interest income and other expense, net
(59 ) 94 (153 ) (163 )%
$ 1,034 $ (205 ) $ 1,239 (604 )%
~~Interest expense relates primarily to our line of credit facility. Interest income~~was $1.1 million and ~~other income (expense), net, relates to the interest earned on our money market accounts and foreign exchange~~which included a gain ~~or losses recorded. Changes in interest expense related for our revolving loan relate to the variability and timing of our outstanding loan balance. Gain~~ on forgiveness of debt ~~for the nine months ended October 3, 2021,~~ relates to the gain related to the forgiveness of the PPP loan of $1.2 million recorded in the first quarter of fiscal 2021. Interest rates for this year as compared to the prior year were significantly lower, accounting for most of the decrease relating to interest income. Interest income and other income (expense), net for this period was approximately ($59,000) as compared to the nine months ended September 27, 2020 of $94,000.million.

Provision for ~~(Benefit from)~~ Income Taxes

The table below sets forth the changes in ~~the provisions~~provision for income ~~tax~~taxes for the ~~nine~~six months ended ~~October~~July 3, ~~2021 as~~2022, compared to the ~~nine~~six months ended ~~September 27, 2020~~July 4, 2021 (in thousands, except percentage data):

Nine Months Ended

Change

October 3,

September 27,

2021

2020

Amount

Percentage

Provision for (benefit from) income taxes
$ 136 $ 1 $ (135 ) (13500 )%

Six Months Ended

Change

July 3,

July 4,

2022

2021

Amount

Percentage

Provision for income taxes
$ 16 $ 157 $ 141 90 %

The majority of the income tax expense for the ~~quarter~~six months ended ~~October~~July 3, ~~2021~~2022 and ~~September 27, 2020~~July 4, 2021 relates to our foreign subsidiaries, which are cost-plus entities. Included in the provision for the ~~quarter~~six months ended ~~October 3,~~July 4, 2021 was a $125,000 deferred tax provision related to a one-time repatriation of funds from our India entity.

We are subject to U.S. federal income tax as well as income taxes in many U.S. states and foreign jurisdictions in which we operate. The U.S. tax years from 1999 forward remain effectively open to examination due to the carryover
21
Table of ~~unused net operating losses and tax credits.~~
Contents

Liquidity and Capital Resources

We have financed our operations and capital investments through ~~sales~~public and private offerings of our common stock, finance and operating leases, and borrowing under a revolving line of credit and cash flows ~~from~~used in operations, partially offset by cash used in operations. ~~As of October 3, 2021, our principal sources of liquidity consisted of~~In addition to the Company's cash, cash equivalents and restricted cash of ~~$19.6~~$18.5 million, ~~including~~as of July 3, 2022 other sources of liquidity included a $15.0 million drawn down from our revolving line of credit ("Revolving Facility") with Heritage Bank of Commerce (“Heritage Bank”), and ~~$1.2~~$1.6 million ~~loan received under~~in net proceeds from the ~~Paycheck Protection Program (“PPP”)~~Company's sale of common stock, of which ~~was forgiven~~$1.5 million represented a registered direct offering in ~~January 2021.~~
29

~~Table of Contents~~
On December 11, 2020, we entered into a Second Amendment (the “Second Amendment”) to the Amended and Restated Loan Agreement with Heritage Bank. The Second Amendment extended the loan maturity date for one year through September 28, 2022 and amended the interest to a rate per annum equal to one half of one percentage point (0.50%) above the prime rate.February 2022.

On ~~August 16, 2021,~~February 9, 2022, the Company entered into common stock purchase agreements with certain investors for the sale of an aggregate of 310,000 shares of common stock, par value $0.001 in a ~~Third Amendment~~registered direct offering. These share placements resulted in net cash proceeds of approximately $1.5 million. Issuance costs related to this offering were negligible. The purchase price for each share of common stock in this placement was $4.78. The Company currently intends to use the ~~Amended~~net proceeds from the financing for working capital, the development of next generation eFPGA-based products, including AI and Restated Loan Agreement with Heritage Bank (the "Third Amendment"). The Third Amendment (a) waived the Company’s non-compliance with the minimum cash covenant which obligated the Company to maintain at least $3.0 million of unrestricted cash at all timesopen-source hardware or software, and (b) amended this obligation such that the Company shall now be required to maintain unrestricted cash in its accounts at the Bank in an amount of at least $3.0 million measured i) immediately prior to the funding of any credit extension, and ii) at all times that any advance is outstanding. general corporate purposes

We were in compliance with all the Heritage Bank Revolving Facility loan covenants as of ~~October~~July 3, ~~2021.~~2022. As of ~~October~~July 3, ~~2021,~~2022, we had $15.0 million of outstanding ~~revolving line of credit~~on the Revolving Facility with an interest rate of ~~3.75%~~5.25%.
On May 6, 2020, we entered into a loan agreement with Heritage Bank for a loan of $1.2 million pursuant to the PPP under the CARES Act enacted on March 27, 2020. On January 26, 2021, we received notice from Heritage Bank that amounts under the loan agreement had been forgiven. See Note 5 to these Unaudited Condensed Consolidated Financial Statements for the details.
On June 22, 2020, the Company closed an underwritten public offering of 2.5 million shares of common stock, $0.001 par value per share at a price of $3.50 per share. The Company received gross proceeds from the offering of approximately $8.8 million and incurred stock issuance costs of approximately $1.1 million. Under the terms of the underwriting agreement, the Company granted the underwriter a 30-day option to purchase up to an additional 375,000 shares of common stock to cover overallotments. On July 21, 2020 the underwriter's partially exercised the option to purchase 141,733 additional shares of common stock in connection with the offering, resulting in additional gross proceeds to the Company of approximately $496,000 and incurred additional stock issuance costs of approximately $52,000. Total gross proceeds received from this offering was approximately $9.3 million and incurred total stock issuance costs of approximately $1.2 million. Net proceeds received from this offering after deducting stock issuance costs was approximately $8.1 million.
On September 22, 2021, we entered into a Share Subscription Agreement for the sale of 125,000 shares of our common stock (the “Private Placement”). On September 30, 2021, the Company entered into a Common Stock Purchase Agreement for the sale of 73,664 shares of our common stock, in a registered direct offering pursuant to our effective shelf registration statement on Form S-3 (File No. 333-230352) (the “Registered Direct Offering,” and together with the Private Placement, the “Share Placements”). The net proceeds to us from the Share Placements, after deducting equity issuance costs of approximately $45,000, were approximately $1.0 million.

We currently use our cash to fund our working capital to accelerate the development of next generation products and for general corporate purposes. Based on past performance and current expectations, we believe that its existing cash and cash equivalents, together with available financial resources from the Revolving Facility with Heritage Bank, will be sufficient to fund its operations and capital expenditures and provide adequate working capital for the next twelve months.

Various factors ~~can~~ affect ~~our~~the Company’s liquidity, including, among others: the level of revenue and gross profit as a result of the cyclicality of the semiconductor ~~industry,~~industry; the conversion of design opportunities into ~~revenue, the~~revenue; market acceptance of existing and new products including solutions based on its eFPGA IP, ArcticLink®, and PolarPro® platforms, eFPGA, EOS S3 SoC, Quick AI solution, and SensiML ~~software tools, the~~software; fluctuations in revenue as a result of product ~~end-of-life, the~~end-of-life; fluctuations in revenue as a result of the stage in the product life cycle of its customers’ ~~products, the~~products; costs of securing access to and availability of adequate manufacturing ~~capacity, the~~capacity; levels of ~~inventories and~~inventories; wafer purchase ~~commitments,~~commitments; customer credit ~~terms,~~terms; the amount and timing of research and development ~~expenditures,~~expenditures; the timing of new product ~~introductions,~~introductions; production ~~volumes and~~volumes; product ~~quality,~~quality; sales and marketing ~~efforts,~~efforts; the value and liquidity of its investment ~~portfolio,~~portfolio; changes in operating assets and ~~liabilities,~~liabilities; the ability to obtain or renew debt financing and to remain in compliance with the terms of existing credit ~~facilities,~~facilities; the ability to raise funds from the sale of equity in the ~~Company, the ability to capitalize on synergies with our newly acquired subsidiary SensiML;~~Company; the issuance and exercise of stock options and participation in ~~our~~the Company’s employee stock purchase ~~plan~~plan; and other factors related to the uncertainties of the industry and global economics.

Over the longer term, ~~we anticipate~~the Company anticipates that sales generated from ~~our~~its new product offerings, ~~and~~ existing cash and cash equivalents, together with financial resources from ~~our~~its Revolving Facility with Heritage Bank, assuming renewal of the Revolving Facility or the Company entering into a new debt agreement with an alternative lender prior to the expiration of the revolving line of credit in December 2023, and ~~our~~its ability to raise additional capital in the public capital markets will be sufficient to satisfy ~~our~~its operations and capital expenditures. However, wethe Company cannot provide any assurance that weit will be able to raise additional capital, if required, or that such capital will be available on terms acceptable to ~~us.~~the Company. The inability of usthe Company to generate sufficient sales from ~~our~~its new product offerings and/or raise additional capital if needed could have a material adverse effect on ~~our~~the Company’s operations and financial condition, including ~~our~~its ability to maintain compliance with ~~our~~its lender’s financial covenants. ~~On November 16, 2021, we entered into a Fourth Amendment to extend the Amended and Restated Loan Agreement with Heritage Bank to extend the maturity date to December 31, 2023 See Note 12.~~
30

~~Table of Contents~~

As of ~~October~~July 3, ~~2021,~~2022, most of our cash, cash equivalents and restricted cash were invested in ~~the~~a money market account at Heritage Bank. As of ~~October~~July 3, ~~2021,~~2022, our interest-bearing debt consisted of ~~$836,000~~$0.5 million outstanding under finance leases and $15.0 million outstanding under our Revolving Facility. See Note 5, ~~and Note 6~~Debt Obligations, to the ~~Unaudited Condensed Consolidated Financial Statements~~unaudited condensed consolidated financial statements for more details.

Cash balances held at our foreign ~~subsidiaries were~~subsidiaries was approximately ~~$379,000~~$0.1 million and ~~$342,000~~$0.4 million as of ~~October~~July 3, ~~2021~~2022 and January ~~3, 2021,~~2, 2022, respectively. Earnings from our foreign subsidiaries are currently deemed to be indefinitely reinvested. We do not expect such reinvestment to affect our liquidity and capital resources, and we continually evaluate our liquidity needs and ability to meet global cash requirements as a part of our overall capital deployment strategy. Factors that affect our global capital deployment strategy include anticipated cash flows, the ability to repatriate cash in a tax-efficient manner, funding requirements for operations and investment activities, acquisitions and divestitures and capital market conditions.

22
Table of Contents
In summary, our cash flows were as follows (in thousands):

Nine Months Ended

Six Months Ended

October 3,

September 27,

July 3,

July 4,

2021

2020

2022

2021

Net cash used in operating activities
$ (3,053 ) $ (5,145 ) $ (2,063 ) $ (2,812 )
Net cash used in investing activities
(580 ) (762 ) (402 ) (447 )
Net cash provided by financing activities
466 9,044
Net cash provided by (used in) financing activities
1,406 (493 )

Net cash used in operating activities

For the ~~nine~~six months ended ~~October~~July 3, ~~2021,~~2022, net cash used in operating activities was ~~$3.1~~$2.1 million, which was primarily due to the net loss of ~~$5.0~~$1.7 million, adjusted for net non-cash charges of ~~$1.0~~$1.2 million, ~~including $1.5~~which included $0.9 million of stock-based compensation, depreciation and amortization expenses of ~~$471,000, and~~$0.3 million, an inventory write-downs of ~~$225,000~~$54 thousand, partially offset by a gain on disposal of equipment of $76 thousand. Cash outflows from changes in operating assets and liabilities were approximately $1.5 million and were primarily due to an increases in accounts receivable, reflecting the increase in revenues during the period, a decrease in deferred revenue, and an increase in inventory. This was partially offset by an increase in trade payables, which are subject to variability of the timing of payments.
For the six months ended July 4, 2021, net cash used in operating activities was $2.8 million, which was primarily due to the net loss of $3.8 million, adjusted for net non-cash charges of $38 thousand including the gain recognized from the forgiveness of ~~debt of $1.2 million related to~~ the PPP loan ~~which was forgiven in the first quarter~~ of ~~fiscal 2021.~~$1.2 million. Other non-cash charges consisted primarily of $0.6 million of stock-based compensation, depreciation and amortization expenses of $0.3 million, and inventory write-downs of $0.2 million. Cash inflows from changes in operating assets and liabilities were approximately $1.0 million, primarily due to a decrease in inventory, and increases in accounts payable and accrued liabilities subject to the variability of the timing of payments, partially offset by an increase in trade receivables due to the increase in revenue during the ~~third~~second quarter.
31

~~Table of Contents~~
For the nine months ended September 27, 2020, net cash used in operating activities was $5.1 million, which was primarily due to the net loss of $8.2 million, adjusted for non-cash charges of $1.3 million. Non-cash charges consisted primarily of $601,000 net gain from reversal of stock-based compensation expense of and depreciation and amortization expense of $644,000. The net gain from the reversal of stock-based compensation was a result of the cancellation of certain performance based RSUs, as established goals required for vesting were not achieved and cancellation of RSUs due to restructuring related terminations. Cash inflows from changes in operating assets and liabilities were approximately $1.7 million, primarily due to a decrease in inventory and a decrease in trade receivables.

Net cash used in investing activities

For the ~~nine~~six months ended ~~October~~July 3, ~~2021,~~2022, cash used in investing activities was ~~$580,000,~~$0.4 million, which was primarily attributable to the capitalized internal-use software and capital expenditures relating to licensed software and computer equipment.

For the ~~nine~~six months ended ~~September 27, 2020,~~July 4, 2021, cash used in investing activities was ~~$762,000,~~$0.4 million, which was primarily attributable to the capitalized internal-use ~~software.~~software and capital expenditure relating to leasehold improvements and computer equipment.
.

Net cash provided by (used in) financing activities

Cash flows from financing activities includes the draw-downs and repayments of our line of credit. For the quarter ended of 2021 and 2020, these draw-downs and repayments netted to zero.

For the ~~nine~~six months ended ~~October~~July 3, ~~2021,~~2022, cash provided by financing activities was ~~$466,000,~~$1.4 million, which was primarily derived from the net proceeds of ~~$1.0~~$1.6 million from the stock ~~issuance of 199,000 shares, partially offset by taxes paid relating to stock-based compensation equity awards.~~issuances. We continue to use and repay our revolving line of credit as our cash needs require.

For the ~~nine~~six months ended ~~September 27, 2020~~July 4, 2021 cash ~~provided by~~used in financing activities was ~~$9.0~~$0.5 million and was primarily ~~derived from the net proceeds of $8.1 million from the stock issuance of 2.5 million shares of common stock in June 2020 and overallotment of 141,733 shares~~attributable to ~~underwriters in July 2020, proceeds from the PPP loan of $1.2 million, partially offset by scheduled repayments of $179,000 for finance lease obligations.~~taxes paid relating to stock-based compensation equity awards.

~~Contractual Obligations and Commercial Commitments~~
The following table summarizes our contractual obligations and commercial commitments as of October 3, 2021 and the effect such obligations and commitments are expected to have on our liquidity and cash flows in future fiscal periods. There are neither contractual obligations nor commercial commitments over three years (in thousands):

Payments Due by Period

Less than

Total

1 Year

1-3 Years

Contractual obligations:

Operating leases
$ 1,036 $ 406 $ 630
Finance and software lease obligations
836 445 391
Wafer purchases (1)
632 632
Other purchase commitments
1,169 1,047 122
Total contractual obligations
$ 3,673 $ 2,530 $ 1,143
Other commercial commitments:

Revolving line of credit
$ 15,000 $ 15,000 $ —
Total commercial commitments
15,000 15,000 —
Total contractual and commercial obligations
$ 18,673 $ 17,530 $ 1,143

⁽¹⁾
~~Certain of our wafer manufacturers require us to forecast wafer starts several months in advance. We are committed to accept the delivery of and pay for a portion of forecasted wafer volume.~~
~~Concentration of Suppliers~~
We depend on a limited number of contract manufacturers, subcontractors, and suppliers for wafer fabrication, assembly, programming and testing, and for the supply of programming equipment. These services are typically provided by one supplier for each of our devices. We generally purchase these single or limited source services through standard purchase orders. 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. The decision not to provide these services to us or the inability to supply these services to us, such as in the case of a natural or financial disaster, would have a significant impact on our business. In addition, these subcontracted manufacturers produce products for other companies and we must place orders up to several months in advance of expected delivery. Increased demand from other companies could result in these subcontract manufacturers allocating available capacity to customers that are larger or have long-term supply contracts in place and we may be unable to obtain adequate foundry and other capacity at acceptable prices, or we may experience delays or interruption in supply. As a result, we have only a limited ability to react to fluctuations in demand for our products, which could cause us to have an excess or a shortage of inventories of a particular product. Additionally, volatility of economic, market, social and political conditions in countries where these suppliers operate may be unpredictable and could result in a reduction in product revenue or increase our cost of revenue and could adversely affect our business, financial condition and results of operations.

3223
Table of Contents
Part I. Financial Information (continued)

Off-Balance Sheet Arrangements

We do not maintain any off-balance sheet partnerships, arrangements or other relationships with unconsolidated entities or others, often referred to as structured finance or special purpose entities, which are established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

~~Recently Issued Accounting Pronouncements~~
See Note 2 to the Unaudited Condensed Consolidated Financial Statements for a description of recent accounting pronouncements, including the respective dates of adoption and expected effects on the results of our operations and financial condition.
Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not Applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on management's evaluation as of ~~October~~July 3, ~~2021,~~2022, our Chief Executive Officer and ~~Principal~~Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective at the reasonable assurance level to ensure that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and regulations and (ii) accumulated and communicated to our management, including our Chief Executive Officer and ~~Interim~~ Chief ~~Accounting~~Financial Officer, to allow timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and ~~Interim~~ Chief ~~Accounting~~Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all errors and frauds. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

33

~~Table of Contents~~
Part II. Other Information
Item 1. Legal Proceedings

None. ~~See Note 11 of the Unaudited Condensed Consolidated Financial Statements for a description of legal proceedings.~~

Item 1A. Risk Factors

~~Except as set forth below, there~~There have been no material changes to the risk factors set forth in our ~~2020~~2021 Annual Report on Form 10-K for the year ended January ~~3, 2021,~~2, 2022, filed with the SEC on March ~~23, 2021,~~22, 2022, which includes a detailed discussion of our risk factors at Part I, Item 1A, Risk Factors, which discussion is hereby incorporated by reference into this Part II, Item 1A.

Item ~~2. Unregistered Sales of Equity~~3. Defaults Upon Senior Securities ~~and Use of Proceeds~~

On September 22, 2021, QuickLogic Corporation (the “Company”) entered into a Share Subscription Agreement with an investor for the sale of 125,000 shares of common stock, par value $0.001 (the “Common Stock”) at market price of $5.43 per share. This share placement resulted in gross proceeds of approximately $678,000. None.
The Company currently intends to use the net proceeds from the Financing for working capital, the development of next generation eFPGA-based products, including AI and open source hardware or software, and general corporate purposes. We may also use a portion of the net proceeds to acquire and/or license technologies and acquire and/or invest in businesses when the opportunity arises; however, we currently have no commitments or agreements and are not involved in any negotiations with respect to any such transactions. Please refer to Form 8-K filed with SEC on September 30,2021.
34

~~Table of Contents~~

Item 6. Exhibits

a.     Exhibits
The following Exhibits are filed or incorporated by reference into this report:

Exhibit
Number

Description
Form
Exhibit
Filing Date
10.1 Form of Common Stock Purchase Agreement, dated September 30, 2021, between QuickLogic Corporation and the investor named therein 8-K 10.1 September 30,2021
10.2 Form of Share Subscription Agreement, dated September 22, 2021, between QuickLogic Corporation and the purchaser named therein 8-K 10.2 September 30, 2021
10.3 Fourth Amendment to Amended and Restated Loan and Security Agreement entered into as of November 16, 2021
  31.1

Certification of Brian C. Faith, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

  31.2

Certification of Anthony Contos, Interim Chief Accounting Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

  32.1

Certification of Brian C. Faith, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

  32.2

Certification of Anthony Contos, Interim Chief Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

The cover page from the Company’s quarterly report on Form 10-Q for the quarter ended October 3, 2021, has been formatted in Inline XBRL and contained in exhibit 101.

Exhibit
Number
Description
10.1 QuickLogic Corporation 2019 Stock Plan, as amended May 10, 2022, (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on May 5, 2022).
31.1
Certification of Brian C. Faith, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Elias Nadar, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certification of Brian C. Faith, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
Certification of Elias Nadar, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
The cover page from the Company’s quarterly report on Form 10-Q for the quarter ended July 3, 2022, has been formatted in Inline XBRL and contained in exhibit 101.

3524
Table of Contents

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

QUICKLOGIC CORPORATION

/s/ ~~Anthony Contos~~Elias Nader
Date:
~~November~~August 17, ~~2021~~2022
~~Anthony Contos~~Elias Nader

~~Interim~~ Chief ~~Accounting~~Financial Officer and Senior Vice-President, Finance
(as Principal ~~Accounting and~~ Financial Officer and on behalf of the Registrant)

3625

	Three Months Ended						Six Months Ended
	July 3, 2022			July 4, 2021			July 3, 2022			July 4, 2021
Revenue		100	%		100	%		100	%		100	%
Cost of revenue		44	%		49	%		42	%		49	%
Gross profit		56	%		51	%		58	%		51	%
Operating expenses:
Research and development		26	%		57	%		29	%		69	%
Selling, general and administrative		44	%		63	%		48	%		73	%
Loss from operations		(14	)%		(69	)%		(19	)%		(91	)%

Interest expense		—	%		(1	)%		—	%		(1	)%
Gain on forgiveness of debt		—	%		—	%		—	%		23	%
Interest income and other income (expense), net		3	%		(2	)%		—	%		(1	)%
Loss before income taxes		(11	)%		(71	)%		(19	)%		(70	)%
Provision for income taxes		1	%		—	%		1	%		3	%
Net loss		(12	)%		(71	)%		(20	)%		(73	)%

	Three Months Ended						Nine Months Ended
	October 3,			September 27,			October 3,			September 27,
	2021			2020			2021			2020
Revenue		100	%		100	%		100	%		100	%
Cost of revenue		29	%		48	%		41	%		50	%
Gross profit		71	%		52	%		59	%		50	%
Operating expenses:
Research and development		47	%		78	%		60	%		88	%
Selling, general and administrative		57	%		83	%		66	%		82	%
Restructuring costs		—	%		6	%		—	%		10	%
Loss from operations		(33	)%		(115	)%		(66	)%		(130	)%

Interest expense		(1	)%		(2	)%		(1	)%		(5	)%
Gain on forgiveness of debt		—	%		—	%		13	%		—	%
Interest income and other income (expense), net		(0	)%		2	%		(1	)%		2	%
Loss before income taxes		(34	)%		(115	)%		(55	)%		(133	)%
Provision for (benefit from) income taxes		(1	)%		1	%		2	%		—	%
Net loss		(33	)%		(116	)%		(56	)%		(133	)%

	Three Months Ended																Three Months Ended
	October 3, 2021					September 27, 2020					Change						July 3, 2022					July 4, 2021					Change
			% of Total					% of Total											% of Total					% of Total
	Amount		Revenues			Amount		Revenues			Amount			Percentage			Amount		Revenues			Amount		Revenues			Amount			Percentage
New products	$	2,758		71	%	$	639		36	%	$	2,119			332	%	$	3,131		69	%	$	1,262		44	%	$	1,869			148	%
Mature products		1,100		29	%		1,141		64	%		(41	)		(4	)%		1,410		31	%		1,620		56	%		(210	)		(13	)%
Total revenue	$	3,858		100	%	$	1,780		100	%	$	2,078			117	%	$	4,541		100	%	$	2,882		100	%	$	1,659			58	%

	Three Months Ended						Change
	July 3,			July 4,
	2022			2021			Amount		Percentage
Interest expense	$	(22	)	$	(32	)	$	10		(31	)%
Interest income and other income (expense), net		142			(45	)		187		(416	)%
Total interest income and other income (expense), net	$	120		$	(77	)	$	197		(256	)%

	Payments Due by Period
			Less than
	Total		1 Year		1-3 Years
Contractual obligations:
Operating leases	$	1,036	$	406	$	630
Finance and software lease obligations		836		445		391
Wafer purchases (1)		632		632
Other purchase commitments		1,169		1,047		122
Total contractual obligations	$	3,673	$	2,530	$	1,143
Other commercial commitments:
Revolving line of credit	$	15,000	$	15,000	$	—
Total commercial commitments		15,000		15,000		—
Total contractual and commercial obligations	$	18,673	$	17,530	$	1,143

Exhibit Number	Description	Form	Exhibit	Filing Date
10.1	Form of Common Stock Purchase Agreement, dated September 30, 2021, between QuickLogic Corporation and the investor named therein	8-K	10.1	September 30,2021
10.2	Form of Share Subscription Agreement, dated September 22, 2021, between QuickLogic Corporation and the purchaser named therein	8-K	10.2	September 30, 2021
10.3	Fourth Amendment to Amended and Restated Loan and Security Agreement entered into as of November 16, 2021
31.1	Certification of Brian C. Faith, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Anthony Contos, Interim Chief Accounting Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Brian C. Faith, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Anthony Contos, Interim Chief Accounting Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	The cover page from the Company’s quarterly report on Form 10-Q for the quarter ended October 3, 2021, has been formatted in Inline XBRL and contained in exhibit 101.

		QUICKLOGIC CORPORATION

		/s/ ~~Anthony Contos~~Elias Nader
Date:	~~November~~August 17, ~~2021~~2022	~~Anthony Contos~~Elias Nader
		*~~Interim~~ Chief ~~Accounting~~Financial Officer and Senior Vice-President, Finance* (as Principal ~~Accounting and~~ Financial Officer and on behalf of the Registrant)