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Note 3 - Discontinued Operations | 9 Months Ended
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Sep. 28, 2025
Notes to Financial Statements |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Note 3 — Discontinued Operations In the first quarter of 2025, the Company announced its Board of Directors was actively exploring options for its wholly owned subsidiary, SensiML. This decision by the Company and its Board of Directors was influenced by recent events, including eFPGA IP design wins with strategic customers, expansion of large government ruggedized FPGA and eFPGA IP contracts, performance improvements of its eFPGA IP products, recent changes in the FPGA market competitor landscape, and an increase in inbound interest from customers of former eFPGA market competitors. With the success of QuickLogic's eFPGA IP and ruggedized FPGA business, the Company will focus all of its resources on leveraging and growing the cornerstones of its core business model. SensiML's Analytics Toolkit provides an end-to-end Artificial Intelligence / Machine Learning development platform with accurate sensor algorithms using AI technology, spanning data collection, labeling, algorithm and firmware auto generation, and testing. This cutting-edge software enables ultra-low power IoT endpoints that implement AI to transform raw sensor data into meaningful insight at the device itself. Revenue streams from SensiML include Software as a Service (SaaS) subscriptions for development, per unit license fees when deployed in production, and proof-of-concept services. Preliminary discussions have commenced with potential strategic partners regarding the possible sale of SensiML of its assets. As of January 7, 2025, the Company began accounting for the SensiML subsidiary in accordance with ASC 205-20, Discontinued Operations. As of September 28, 2025, there have not been any new material developments regarding the disposal of SensiML. The Company expects to complete the disposal of SensiML within 12 months from the announcement date. The following table provides details relating to major classes of assets and liabilities for discontinued operations classified as held for sale as of September 28, 2025, and December 29, 2024 (in thousands):
|  | September 28, |  |  | December 29, |
|  | 2025 |  |  | 2024 |
ASSETS |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 3 |  |  | $ | 21 |
Accounts receivable, net of allowance for credit losses of $31 and $30, as of September 28, 2025 and December 29, 2024, respectively |  |  | 7 |  |  |  | 10 |
Total current assets |  |  | 10 |  |  |  | 31 |
Capitalized internal-use software, net |  |  | 1,740 |  |  |  | 1,740 |
Intangible assets, net |  |  | 430 |  |  |  | 430 |
Goodwill |  |  | 185 |  |  |  | 185 |
Other assets |  |  | — |  |  |  | 1 |
TOTAL ASSETS |  | $ | 2,365 |  |  | $ | 2,387 |
LIABILITIES |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Trade payables |  | $ | (1 | ) |  | $ | 23 |
Accrued liabilities |  |  | — |  |  |  | 24 |
Deferred revenue |  |  | — |  |  |  | 10 |
Total current liabilities |  |  | (1 | ) |  |  | 57 |
TOTAL LIABILITIES |  | $ | (1 | ) |  | $ | 57 |
The following table provides details related to internal-use software held by SensiML, the business held for sale as of September 28, 2025, and December 29, 2024 (in thousands):
|  | September 28, |  |  | December 29, |
|  | 2025 |  |  | 2024 |
Capitalized internal-use software, net: |  |  |  |  |  |  |  |
Capitalized internal-use software |  | $ | 3,808 |  |  | $ | 3,808 |
Less: Accumulated amortization |  |  | (2,068 | ) |  |  | (2,068 | )
|  | $ | 1,740 |  |  | $ | 1,740 |
The following table provides details related to intangible assets held by SensiML, the business held for sale as of September 28, 2025, and December 29, 2024 (in thousands):
|  | Gross Carrying Amount |  |  | Accumulated Amortization |  |  | Net Carrying Amount |
Developed technology |  | $ | 959 |  |  | $ | (575 | ) |  | $ | 384 |
Customer relationships |  |  | 81 |  |  |  | (81 | ) |  |  | — |
Trade names and trademarks |  |  | 116 |  |  |  | (70 | ) |  |  | 46 |
Total intangible assets related to discontinued operations |  | $ | 1,156 |  |  | $ | (726 | ) |  | $ | 430 |
The Company recorded depreciation and amortization expense for discontinued operations of $0 for the three and nine months ended September 28, 2025 and $0.2 million and $0.6 million for the three and nine months ended September 29, 2024, respectively. No interest was capitalized for any period presented. Additionally, as of January 7, 2025, depreciation and amortization of assets held by SensiML has been discontinued. Depreciation and amortization expense for the three and nine months ended September 29, 2024 included approximately $167 thousand and $494 thousand, respectively, of amortization expense related to capitalized internal-use software. For its trades receivable, the Company provides an allowance for credit losses based on historical experience and a specific identification basis. As of September 28, 2025 and December 29, 2024, the allowance for credit losses from discontinued operations was $31 thousand and $30 thousand, respectively. The Company did not record more than de minimis credit loss expense in discontinued operations for the nine months ended September 28, 2025 and September 29, 2024. The following table provides details relating to major line items constituting income (loss) for discontinued operations classified as held for sale for the three and nine months ended September 28, 2025 and September 29, 2024 (in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 28, |  |  | September 29, |  |  | September 28, |  |  | September 29, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Revenue |  | $ | — |  |  | $ | 64 |  |  | $ | 11 |  |  | $ | 433 |
Cost of revenue |  |  | — |  |  |  | 167 |  |  |  | 3 |  |  |  | 494 |
Gross profit (loss) |  |  | — |  |  |  | (103 | ) |  |  | 8 |  |  |  | (61 | )
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research and development |  |  | 3 |  |  |  | 156 |  |  |  | 21 |  |  |  | 474 |
Selling, general and administrative |  |  | — |  |  |  | — |  |  |  | 13 |  |  |  | — |
Restructuring costs |  |  | — |  |  |  | — |  |  |  | 87 |  |  |  | — |
Interest income and other income (expense), net |  |  | — |  |  |  | (7 | ) |  |  | — |  |  |  | (17 | )
Income (loss) from discontinued operations before income taxes |  |  | (3 | ) |  |  | (266 | ) |  |  | (113 | ) |  |  | (552 | )
(Benefit from) provision for income taxes |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net income (loss) from discontinued operations |  | $ | (3 | ) |  | $ | (266 | ) |  | $ | (113 | ) |  | $ | (552 | )
Net income (loss) from discontinued operations per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.00 | ) |  | $ | (0.02 | ) |  | $ | (0.01 | ) |  | $ | (0.04 | )
Diluted |  | $ | (0.00 | ) |  | $ | (0.02 | ) |  | $ | (0.01 | ) |  | $ | (0.04 | )
Weighted average shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 16,516 |  |  |  | 14,555 |  |  |  | 15,957 |  |  |  | 14,390 |
Diluted |  |  | 16,516 |  |  |  | 14,555 |  |  |  | 15,957 |  |  |  | 14,390 |
For the three and nine months ended September 28, 2025, the Company has incurred $0 thousand and $162 thousand, respectively, in costs in connection with the disposal of SensiML. These costs are primarily comprised of one-time termination benefits and are included within the 'Restructuring Costs' line item in the Company's unaudited condensed consolidated statement of operations, as well as in the table above. The Company does not expect total costs incurred in connection with the disposal of SensiML to differ materially from the expenses already recognized in the nine months ended September 28, 2025. The following is a breakdown of revenue from discontinued operations by product family (in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 28, 2025 |  |  | September 29, 2024 |  |  | September 28, 2025 |  |  | September 29, 2024 |
New products |  | $ | — |  |  | $ | 64 |  |  | $ | 11 |  |  | $ | 433 |
Total revenue |  | $ | — |  |  | $ | 64 |  |  | $ | 11 |  |  | $ | 433 |
Contract liabilities related to discontinued operations were $0 thousand and $10 thousand as of September 28, 2025 and December 29, 2024. In the nine months ended September 28, 2025, all of the $10 thousand in deferred revenues related to discontinued operations that were outstanding as of December 29, 2024 were recognized by the Company as revenue. The table below presents disaggregated revenues for discontinued operations by geographical location (in thousands). Revenue attributed to geographic location is based on the destination of the product or service. All revenues from discontinued operations in North America were in the United States.
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 28, 2025 |  |  | September 29, 2024 |  |  | September 28, 2025 |  |  | September 29, 2024 |
Asia Pacific |  | $ | — |  |  | $ | 10 |  |  | $ | 4 |  |  | $ | 19 |
North America |  |  | — |  |  |  | 54 |  |  |  | 6 |  |  |  | 414 |
Europe |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | — |
Total revenue |  | $ | — |  |  | $ | 64 |  |  | $ | 11 |  |  | $ | 433 |
The following distributors and customers accounted for 10% or more of the Company's revenue from discontinued operations for the periods presented:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 28, |  |  | September 29, |  |  | September 28, |  |  | September 29, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Customer "L" |  |  | * |  |  |  | * |  |  |  | 50 | % |  |  | 84 | %
Customer "O" |  |  | * |  |  |  | * |  |  |  | 34 | % |  |  | * |
Customer "R" |  |  | * |  |  |  | 55 | % |  |  | * |  |  |  | * |
Customer "S" |  |  | * |  |  |  | 20 | % |  |  | * |  |  |  | * |
Customer "T" |  |  | * |  |  |  | 11 | % |  |  | * |  |  |  | * |
The following distributors and customers accounted for 10% or more of the Company's accounts receivable from discontinued operations as of the dates presented:
|  | September 28, |  |  | December 29, |
|  | 2025 |  |  | 2024 |
Customer "L" |  |  | 34 | % |  |  | 34 | %
Customer "M" |  |  | 65 | % |  |  | 65 | %
The following table provides the expenses from discontinued operations related to operating leases for the three and nine months ended September 28, 2025 and September 29, 2024 (in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 28, 2025 |  |  | September 29, 2024 |  |  | September 28, 2025 |  |  | September 29, 2024 |
Operating lease costs from discontinued operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed |  | $ | — |  |  | $ | 4 |  |  | $ | 4 |  |  | $ | 12 |
Total |  | $ | — |  |  | $ | 4 |  |  | $ | 4 |  |  | $ | 12 |
Stock-based compensation expense from discontinued operations for the three and nine months ended September 28, 2025 and September 29, 2024 was as follows (in thousands):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 28, 2025 |  |  | September 29, 2024 |  |  | September 28, 2025 |  |  | September 29, 2024 |
Cost of revenue |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Research and development |  |  | — |  |  |  | (105 | ) |  |  | (32 | ) |  |  | 147 |
Selling, general and administrative |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | — |  |  | $ | (105 | ) |  | $ | (32 | ) |  | $ | 147 |
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 from discontinued operations was approximately $0 and ($32 thousand) for the three and nine months ended September 28, 2025 and ($66 thousand) and $88 thousand for the three and nine months ended September 29, 2024, respectively. Total stock-based compensation in discontinued operations related to the Company's Employee Stock Purchase Plan was approximately $0 for the three and nine months ended September 28, 2025 and $0 thousand and $2 thousand for the three and nine months ended September 29, 2024, respectively. The following table provides cash flows from discontinued operations (in thousands):
|  | Nine Months Ended |
|  | September 28, |  |  | September 29, |
|  | 2025 |  |  | 2024 |
Net cash provided by (used in) operating activities from discontinued operations |  | $ | (200 | ) |  | $ | 115 |
Net cash provided by (used in) investing activities from discontinued operations |  |  | - |  |  |  | (463 | )
Net cash provided by (used in) financing activities from discontinued operations |  |  | 182 |  |  |  | 330 |
The Company capitalized certain stock-based compensation amounts to capitalized internal-use software related to discontinued operations of $0 thousand for the three and nine months ended September 28, 2025 and ($40 thousand) and $82 thousand for the three and nine months ended September 29, 2024, respectively. The capitalized stock-based compensation amounts relate to compensation for employees involved in the development of capitalized internal-use software.

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