QUICKLOGIC Corp 10-K for FY2020

QUICKLOGIC Corp (QUIK)

10-K 2021-03-23 For: 2021-01-03

Added on April 06, 2026

About this 10-K

QUICKLOGIC Corp filed this 10-K on March 23, 2021, covering the fiscal year ended January 3, 2021 (FY2020).

Headline figures

Fiscal year ended January 3, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.63M; down 16.3% from $10.31M a year earlier
Net loss: $11.15M; compared with a net loss of $15.44M a year earlier

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Title of Each Class	Trading Symbol	Name of Exchange on which Registered
Common Stock, $0.001 par value	QUIK	The Nasdaq Capital Market


Large accelerated filer	☐	Accelerated Filer	☐

Non-accelerated filer	☒	Smaller Reporting Company	☒

Emerging growth company	☐

		Page
PART I
Item 1.	Business	4
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	19
Item 4.	Mine Safety Disclosures	19
PART II
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6.	Selected Financial Data	22
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 8.	Financial Statements and Supplementary Data	34
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	60
Item 9A.	Controls and Procedures	60
Item 9B.	Other Information	61
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	62
Item 11.	Executive Compensation	62
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	62
Item 13.	Certain Relationships, Related Transactions and Director Independence	62
Item 14.	Principal Accounting Fees and Services	62
PART IV
Item 15.	Exhibits and Financial Statement Schedules	63
Signatures		65

	•	Microcontrollers, or MCUs, are typically small, low-power devices on a single integrated circuit that contain a processor core, memory and a number of peripherals. They are designed to be programmed with software for embedded applications;

	•	Application Specific Standard Products, or ASSPs, other than processors, are fixed function devices designed to address a relatively narrow set of applications. These devices typically integrate a number of common peripherals or functions and the functionality of these devices is fixed prior to wafer fabrication;

	•	Programmable Logic Devices, or PLDs, are general-purpose devices, which can be used by a variety of electronic systems manufacturers and are customized after purchase for a specific application. FPGAs are a subset of PLDs and are typically used to implement complex system functions; and

	•	Application Specific Integrated Circuits, or ASICs, are custom devices designed and fabricated to meet the needs of one specific application for one end-customer. Structured ASICs, a sub-category of ASICs, provide a limited amount of custom content to broaden the applicability of a device for additional applications.

	•	Sensor Processing IPs such as Flexible Fusion Engine, or FFE, Sensor Manager, or Communications Manager;

	•	Hardware Acceleration / Processor Offloading IPs such as various digital filter and matrix multiplication functions.

	•	Our system software group creates the drivers and other system code required to connect our silicon devices to Application Processors, drivers and microcode to support our sensor hubs.

	•	Our platform engineering group develops low power programmable devices and system IP that can be used in standalone solution platforms such as PolarPro 3E, or combined in solution platforms such as EOS S3.

	•	Our EDA software group collaborates with the open source software community to ensure the design libraries, interface routines and place and route software that allow our customer to take their own designs and target them to programmable devices, and develops the design tools that support algorithm development for our sensor hubs.

	•	Our hardware group develops and verifies IP Blocks that can be programmed into our programmable logic and develops primarily open source hardware reference designs to showcase and verify our solutions.

	•	Our product engineering group oversees product manufacturing and process development with our third party foundries, and is involved in ongoing process improvements to increase yields and optimize device characteristics.

	•	The Office of the CTO investigates future trends and requirements in order to define the next generation of solutions and platforms.

	•	Our SensiML group develops and maintains all software with respect to the SensiML Analytics Software Suite.

Name	Age		Position
Brian C. Faith		46	President and Chief Executive Officer; Director
Anthony Contos *		57	Interim Chief Accounting Officer and Principal Financial Officer
Rajiv Jain		60	Vice President, Worldwide Operations
Timothy Saxe		65	Senior Vice President Engineering and Chief Technology Officer
Michael R. Farese		74	Chairman of the Board
Andrew J. Pease		70	Director
Arturo Krueger		81	Director
Daniel A. Rabinovitsj		56	Director
Christine Russell		70	Director
Gary H. Tauss		66	Director

	Fiscal Years
	2020			2019			2018			2017			2016
	(in thousands, except per share amount)
Statements of Operations:
Revenue	$	8,634		$	10,310		$	12,629		$	12,149		$	11,421
Cost of revenue		4,386			4,405			6,295			6,627			7,648
Gross profit		4,248			5,905			6,334			5,522			3,773
Operating expenses:
Research and development		7,544			12,350			9,948			9,572			12,265
Selling, general and administrative		6,820			8,918			9,982			9,900			10,310
Restructuring costs(1)		753			—			—			—			—
Loss from operations		(10,869	)		(15,363	)		(13,596	)		(13,950	)		(18,802	)
Interest expense		(328	)		(350	)		(108	)		(115	)		(175	)
Interest income and other expense, net		97			189			77			21			(106	)
Loss before income taxes		(11,100	)		(15,524	)		(13,627	)		(14,044	)		(19,083	)
Provision for (benefit from) income taxes		51			(80	)		152			87			65
Net loss	$	(11,151	)	$	(15,444	)	$	(13,779	)	$	(14,131	)	$	(19,148	)
Net loss per share:
Basic and diluted	$	(1.14	)	$	(2.02	)	$	(2.16	)	$	(2.56	)	$	(4.10	)
Weighted average shares: (2)
Basic and diluted		9,781			7,663			6,365			5,521			4,670

	January 3,		December 29,		December 30,		December 31,		January 1,
	2021		2019		2018		2017		2017
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	$	22,748	$	21,548	$	26,463	$	16,527	$	14,870
Working capital	$	10,178	$	10,366	$	15,576	$	12,619	$	9,042
Total assets	$	32,888	$	33,404	$	36,086	$	24,636	$	21,844
Long-term obligations, excluding current portion	$	2,389	$	1,583	$	124	$	369	$	49
Total stockholders' equity	$	12,487	$	13,823	$	17,255	$	14,878	$	11,988

(1)	We incurred restructuring costs of $753,000 in 2020. In 2020, we implemented a restructuring plan to lower annual operating expenses.
(2)	Net loss per share and weighted average shares, basic and diluted are adjusted to reflect 1-for-14 reverse stock split effected on December 23, 2019.

	(i)	Taxes collected from customers and remitted to government authorities and that are related to the sales of our products are excluded from revenues.

	(ii)	Sales commissions are expensed when incurred because the amortization period would have been one year or less. These costs are recorded in Selling, general and administrative expense in the Condensed Consolidated Statements of Income.

	(iii)	We do not disclose the value of unsatisfied performance obligations for (i) contracts with original expected lengths of one year or less or (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for the services performed.

	Fiscal Years						Year-Over-Year Change
	2020			2019			Amount			Percentage
Interest expense	$	(328	)	$	(350	)	$	22			(6	)%
Interest income and other expense, net		97			189			(92	)		(49	)%
	$	(231	)	$	(161	)	$	(70	)		43	%

	Fiscal Year
	2020			2019			2018
Net cash (used in) operating activities	$	(6,744	)	$	(11,594	)	$	(12,638	)
Net cash (used in) investing activities		(1,054	)		(921	)		(288	)
Net cash provided by financing activities		8,998			7,600			22,862

	Payments Due by Period
	Total		Less than 1 year		1-3 Years		4-5 Years		More than 5 Years
Contractual cash obligations:
Operating leases	$	1,339	$	402	$	831	$	106	$	—
Finance software lease obligations		671		347		324		—		—
Wafer purchases (1)		60		60		—		—		—
Other purchase commitments		692		692		—		—		—
Total contractual cash obligations		2,762		1,501		1,155		106		—
Other commercial commitments
Revolving line of credit (2)		15,000		15,000		—		—		—
Total commercial commitments		15,000		15,000		—		—		—
Total contractual obligations and commercial commitments (3) (4)	$	17,762	$	16,501	$	1,155	$	106	$	—

(1)	Certain of our wafer manufacturers require us to forecast wafer starts several months in advance. We are committed to take delivery of and pay for a portion of forecasted wafer volume.
(2)	The current maturity date on our Revolving line of credit is September 2022. See Note 7 of the Consolidated Financial Statements.
(3)	Does not include unrecognized tax benefits of $2.2 million as of the end of 2020. See Note 10 of the Consolidated Financial Statements.
(4)	Our PPP Loan amounting to approximately $1.2 million, was excluded from the above table as it has been forgiven as of due to the confirmation through Heritage that it had been forgiven as of January 26, 2021.

	Fiscal Years
	2020					2019
	Amount		% of Total Revenues			Amount		% of Total Revenues			Year-Over-Year Change
Revenue by product family (1):
New products	$	2,782		32	%	$	3,123		30	%	$	(341	)	(11	)%
Mature products		5,852		68	%		7,187		70	%		(1,335	)	(19	)%
Total revenue	$	8,634		100	%	$	10,310		100	%	$	(1,676	)	(16	)%

	Page
Report of Independent Registered Public Accounting Firm-Moss Adams LLP	35
Consolidated Balance Sheets as of January 3, 2021 and December 29, 2019	37
Consolidated Statements of Operations for the Fiscal Years 2020, 2019 and 2018	38
Consolidated Statements of Cash Flows for the Fiscal Years 2020, 2019 and 2018	39
Consolidated Statements of Stockholders’ Equity for the Fiscal Years 2020, 2019 and 2018	40
Notes to Consolidated Financial Statements	41

	*January 3,*			*December 29,*
	*2021*			*2019*
ASSETS
Current assets:
Cash and cash equivalents and restricted cash	$	22,748		$	21,548
Accounts receivable, net of allowances for doubtful accounts of $0		1,688			1,991
Inventories		2,688			3,260
Other current assets		1,066			1,565
Total current assets		28,190			28,364
Property and equipment, net		548			830
Capitalized internal-use software, net		986			333
Right of use assets, net		1,839			2,370
Intangible assets, net		860			1,008
Goodwill		185			185
Other assets		280			314
TOTAL ASSETS	$	32,888		$	33,404

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit	$	15,000		$	15,000
Trade payables		935			1,003
Accrued liabilities		1,340			1,133
Deferred revenue		52			158
Lease liabilities, current		685			704
Total current liabilities		18,012			17,998
Long-term liabilities:
Lease liabilities, non-current		1,197			1,583
Paycheck Protection Program loan		1,192			—
Total liabilities		20,401			19,581
Commitments (Note 15)
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000 shares authorized; no shares issued or outstanding		—			—
Common stock, $0.001 par value; 200,000 shares authorized; 11,094 and 8,331 shares issued and outstanding as of January 3, 2021 and December 29, 2019, respectively		11			8
Additional paid-in capital		306,885			297,073
Accumulated deficit		(294,409	)		(283,258	)
Total stockholders' equity		12,487			13,823
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	32,888		$	33,404

	*Fiscal Years*
	*2020*			*2019*			*2018*
Statements of Operations:
Revenue	$	8,634		$	10,310		$	12,629
Cost of revenue		4,386			4,405			6,295
Gross profit		4,248			5,905			6,334
Operating expenses:
Research and development		7,544			12,350			9,948
Selling, general and administrative		6,820			8,918			9,982
Restructuring costs		753			—			—
Loss from operations		(10,869	)		(15,363	)		(13,596	)
Interest expense		(328	)		(350	)		(108	)
Interest income and other expense, net		97			189			77
Loss before income taxes		(11,100	)		(15,524	)		(13,627	)
Provision for (benefit from) income taxes		51			(80	)		152
Net loss	$	(11,151	)	$	(15,444	)	$	(13,779	)
Net loss per share: (1)
Basic and diluted	$	(1.14	)	$	(2.02	)	$	(2.16	)
Weighted average shares: (1)
Basic and diluted		9,781			7,663			6,365

	*Common Stock*
	*Par Value (1)*				*Additional Paid-In*			*Accumulated*			*Total Stockholders'*
	*Shares*		*Amount*		*Capital*			*Deficit*			*Equity*
Balance at December 31, 2017		5,753	$	6	$	268,907		$	(254,035	)	$	14,878
Common stock issued under stock plans and employee stock purchase plans		105		—		353			—			353
Common stock offering, net of issuance costs		965		1		13,901			—			13,902
Stock-based compensation		—		—		1,901			—			1,901
Net loss		—		—		—			(13,779	)		(13,779	)
Balance at December 30, 2018		6,823		7		285,062			(267,814	)		17,255
Common stock issued under stock plans and employee stock purchase plans		110		—		(37	)		—			(37	)
Common stock offering, net of issuance costs		1,314		1		8,001			—			8,002
Common stock issued for SensiML acquisition		84		—		903			—			903
Stock-based compensation		—		—		3,144			—			3,144
Net loss		—		—		—			(15,444	)		(15,444	)
Balance at December 29, 2019		8,331		8		297,073			(283,258	)		13,823
Common stock issued under stock plans and employee stock purchase plans		121		—		(24	)		—			(24	)
Common stock offering, net of issuance costs		2,642		3		8,097			—			8,100
Stock-based compensation		—		—		1,739			—			1,739
Net loss		—		—		—			(11,151	)		(11,151	)
Balance at January 3, 2021		11,094		11		306,885			(294,409	)		12,487

	•	Identification of the contract, or contracts, with a customer;

	•	Identification of the performance obligations in the contract;

	•	Determination of the transaction price;

	•	Allocation of the transaction price to the performance obligations in the contract; and

	•	Recognition of revenue when, or as, the Company satisfies a performance obligation.

	*January 3, 2021*
	*Useful Life*		*Gross Carrying Amount*		*Accumulated Amortization*			*Net Carrying Amount*
Developed technology		10	$	959	$	(192	)	$	767
Customer relationships		2		81		(81	)		—
Trade names and trade marks		10		116		(23	)		93
Total acquired identifiable intangible assets			$	1,156	$	(296	)	$	860

	December 29, 2019
	Useful Life		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed technology		10	$	959	$	(96	)	$	863
Customer relationships		2		81		(40	)		41
Trade names and trade marks		10		116		(12	)		104
Total acquired identifiable intangible assets			$	1,156	$	(148	)	$	1,008

	*Amount*
Annual Fiscal Years
2021		107
2022		107
2023		107
2024		107
2025		107
Thereafter		325
Total	$	860

	Fiscal Year Ended		Fiscal Year Ended
	January 3, 2021		December 29, 2019
Operating lease costs:
Fixed	$	473	$	757
Variable		—		—
Short term		20		40
Total		493		797
Finance lease costs:
Amortization of ROU asset		315		388
Interest		38		18
Total	$	353	$	406

	*Fiscal Year Ended*		*Fiscal Year Ended*
	*January 3, 2021*		*December 29, 2019*
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used for operating leases	$	497	$	791
Operating cash flows used for finance leases		38		24
Financing cash flows used for financing leases		270		365
Total	$	805	$	1,180
Right-of-use assets obtained in exchange for obligations:
Operating leases	$	—	$	2,200
Finance leases		914		170
Total	$	914	$	2,370

	January 3, 2021		December 29, 2019
Right-of-use assets:
Operating leases	$	1,134	$	2,200
Finance leases		705		170
Total	$	1,839	$	2,370
Lease liabilities:
Operating leases		1,212		1,816
Finance leases		670		471
Total	$	1,882	$	2,287

Annual Fiscal Years	*Operating*			*Finance*
2021	$	402		$	375
2022		409			335
2023		422			—
2024		106			—
Total lease payments		1,339			710
Less: Interest		(127	)		(40	)
Present value of lease liabilities	$	1,212		$	670

	*January 3, 2021*
Right-of-use assets:
Weighted-average remaining lease term (years)
Operating leases		3.24
Finance leases		2.21
Weighted-average discount rates:
Operating leases		6.00	%
Finance leases		5.50	%

	•	Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities.

	•	Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

	•	Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

	*January 3,*			*December 29,*			*December 30,*
	*2021*			*2019*			*2018*
Beginning balance of unrecognized tax benefits	$	2,117		$	2,161		$	2,107
Additions (subtractions) for tax positions related to the prior year		38			(46	)		(2	)
Additions for tax positions related to the current year		114			88			125
Lapse of statutes of limitations		(93	)		(86	)		(69	)
Ending balance of unrecognized tax benefits	$	2,176		$	2,117		$	2,161

	*Shares Available for Grant*
Balance at December 29, 2019		272
Authorized		550
Options granted		—
Options forfeited or expired		65
RSUs granted		(816	)
RSUs forfeited		249
Balance at January 3, 2021		320

	*Number of Shares*			*Weighted Average Exercise Price*		*Weighted Average Remaining Term*		*Aggregate Intrinsic Value*
	(in thousands)					(in years)		(in thousands)
Balance outstanding at December 31, 2017		254		$	29.26		4.34
Granted		—			—
Forfeited or expired		(10	)		25.20
Exercised		(15	)		12.60
Balance outstanding at December 30, 2018		229			30.52		3.70
Granted		—			—
Forfeited or expired		(42	)		24.14
Exercised		(1	)		10.92
Balance outstanding at December 29, 2019		186			32.09		3.32
Granted		—			—
Forfeited or expired		(65	)		38.83
Exercised		—			—
Balance outstanding at January 3, 2021		121		$	28.46		3.75	$	—
Exercisable and Vested and expected to vest at January 3, 2021		121		$	28.46		3.75	$	—

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Options Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Options Vested and Exercisable		Weighted Average Exercise Price
	(in thousands)		(in years)				(in thousands)
$12.05		52		5.68	$	12.05		52	$	12.05
$18.48 - $31.50		14		2.82		26.71		14		26.71
$32.20		3		2.34		32.2		3		32.20
$38.92		14		0.85		38.92		14		38.92
$39.48 - $44.94		9		2.76		42.94		9		42.91
$46.62		3		3.34		46.62		3		46.62
$47.46		14		2.94		47.46		14		47.46
$48.72		8		1.35		48.72		8		48.72
$53.48		4		3.38		53.48		4		53.48
$12.05- $53.48		121		3.75	$	28.46		121	$	28.46

	*RSUs & PRSUs Outstanding*
	*Number of Shares*			*Weighted Average Grant Date Fair Value*
	(in thousands)
Nonvested at December 31, 2017		168		$	21.56
Granted		110			11.90
Vested		(77	)		19.18
Forfeited		(18	)		—
Nonvested at December 30, 2018		183			17.22
Granted		353			10.77
Vested		(118	)		14.48
Forfeited		(41	)		—
Nonvested at December 29, 2019		377		$	12.55
Granted		816			3.97
Vested		(144	)		10.41
Forfeited		(249	)		7.93
Nonvested at January 3, 2021		800		$	4.99

	•	Expected term: The expected term represents the length of the purchase period contained in the ESPP.

	•	Risk-free interest rate: The risk-free interest rate assumption is based upon the risk-free rate of a Treasury Constant Maturity bond with a maturity appropriate for the term of the purchase period.

	•	Volatility: The Company determines expected volatility based on historical volatility of the Company’s common stock for the term of the purchase period.

	•	Dividend Yield: The expected dividend assumption is based on the Company’s intent not to issue a dividend under its dividend policy.