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Equity-Based Compensation (Tables)

12 Months Ended

Dec. 29, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Black-Scholes Option Pricing Model Assumptions

The fair value of each stock option is estimated on the date of grant using Black-Scholes and the following assumptions. The expected life of an option represents the period of time that options granted are expected to be outstanding and is based on the SEC Simplified Method (midpoint of average vesting time and contractual term). Expected volatility is based on an average of the historical, daily volatility of a peer group of similar companies blended with SkyWater’s historic daily volatility over a period consistent with the expected life assumption ending on the grant date. Risk-free interest rates are based on yields available on the grant dates for U.S. Treasury Strips with maturities consistent with the expected life assumptions. The Company assumed no dividend yield in the valuation of the options granted as it has never declared or paid dividends on its common stock and has no current plans to introduce dividends as it intends to retain earnings for use in operations.

Fiscal Year Ended

December 29, 2024

December 31, 2023

January 1, 2023

Expected life

6.25 years

6.25 years

6.25 years

Expected volatility

73.1% - 78.7%

75.1% - 76.5%

73.0%

Risk-free interest rate

3.80% - 4.70%

3.47% - 4.66%

2.1%

Schedule of Stock Option Activity

The following table summarizes the stock option activity during the fiscal year ended December 29, 2024:

			Number of Stock Options (in thousands)						Weighted Average Exercise Price Per Share						Weighted-Average Remaining Contractual Life						Aggregate Intrinsic Value (in thousands)
Balance outstanding as of December 31, 2023			1,637						$	11.32
Granted			688						9.98
Exercised			(15)						9.08
Forfeited or canceled			(308)						11.55
Balance outstanding as of December 29, 2024			2,002						10.87						8.0 years						$	8,131
Balance vested and exercisable as of December 29, 2024			351						$	12.26					7.0 years						$	1,796

Schedule of Restricted Common Stock Unit Activity

The following table summarizes the restricted common stock unit activity during the fiscal year ended December 29, 2024:

			Number of Restricted Common Stock Units (in thousands)						Weighted Average Grant Date Fair Value Per Share
Balance outstanding as of December 31, 2023			657						$	10.18
Granted			628						9.54
Vested			(326)						10.86
Forfeited or canceled			(128)						10.02
Balance outstanding as of December 29, 2024			831						$	9.59

Schedule of Black-Scholes ESPP Pricing Model Assumptions

The fair value of the 2021 ESPP is estimated on the date of grant using Black-Scholes and the following assumptions. Expected volatility is based on an average of the historical, daily volatility of SkyWater and a peer group of similar companies over a period consistent with the expected life assumption ending on the grant date. Risk-free interest rates are based on yields available on the grant dates for U.S. Treasury Strips with maturities consistent with the expected life assumptions. The Company assumed no dividend yield in the valuation of the options granted as it has never declared or paid dividends on its common stock and has no current plans to introduce dividends as it intends to retain earnings for use in operations.

			Fiscal Year Ended
			December 29, 2024						December 31, 2023						January 1, 2023
Expected life			0.5 years						0.5 years						0.5 years
Expected volatility			75.1%						75.1%						73.0%
Risk-free interest rate			5.11%						5.34%						3.34%
Weighted average grant-date fair value per share			$3.63						$3.57						$4.45

Schedule of Share-based Compensation Expense

Equity-based compensation expense was allocated in the consolidated statements of operations as follows:

			Fiscal Year Ended
			December 29, 2024						December 31, 2023						January 1, 2023
Cost of revenue			$	2,113					$	1,555					$	2,470
Research and development expense			342						464						575
Selling, general and administrative expense			5,713						4,841						5,171
			$	8,168					$	6,860					$	8,216

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