Financial Analysis

5. Commitments and Contingencies Leases Operating leases consist of fabrication, lab, and office space expiring at various dates through 2029. Finance leases relate to a server lease expiring in February 2029. The Companys lease agreements do not contain any material residual value guarantees or material restrictive covenants. The undiscounted future non-cancellable lease payments under the Companys operating and finance leases were as follows (in thousands): As of March 31, 2026 Amount Remainder of 2026 $ 1,123 2027 1,380 2028 595 2029 48 Total lease payments 3,146 Less: imputed interest (148) Total lease liabilities 2,998 Less: current portion of lease liabilities (1,399) Total lease liabilities, net of current portion $ 1,599 Other information related to the Companys operating lease liabilities was as follows: March 31, 2026 December 31, 2025 Weighted-average remaining lease term (years) 2.21 2.44 Weighted-average discount rate 4.50 % 4.50 % Other information related to the Companys finance lease liabilities was as follows: March 31, 2026 December 31, 2025 Weighted-average remaining lease term (years) 2.92 3.16 Weighted-average discount rate 3.90 % 3.90 % Legal Proceedings From time to time, the Company may become involved in legal proceedings arising from the ordinary course of its business. Other than the patent infringement lawsuit disclosed below, management is currently not aware of any matters that would have a material adverse effect on the financial position, resul …

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The following table presents the Companys revenues disaggregated by sales channel (in thousands): Three Months Ended March 31, 2026 2025 Distributor $ 13,322 $ 7,918 Non-distributor 1,550 5,220 Total revenue $ 14,872 $ 13,138 The following table presents the Companys revenues disaggregated by timing of recognition (in thousands): Three Months Ended March 31, 2026 2025 Point in time $ 14,241 $ 11,158 Over time 631 1,980 Total revenue $ 14,872 $ 13,138 The following table presents the Companys revenues disaggregated by type (in thousands): Three Months Ended March 31, 2026 2025 Product sales $ 14,100 $ 11,026 Licensing 511 Royalties 141 132 Engineering services and other revenue 631 1,469 Total revenue $ 14,872 $ 13,138 …

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6. Stock-Based Compensation Share-Based Compensation Expense The following table presents the details of the Companys share-based compensation expense (in thousands): Three Months Ended March 31, 2026 2025 General and administrative $ 663 $ 717 Research and development 350 497 Sales and marketing 146 177 Cost of sales 141 186 Total stock-based compensation $ 1,300 $ 1,577 Summary of Stock Option Activity The following table summarizes the stock option activity for the three months ended March 31, 2026: Options Outstanding Number of Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (In thousands) BalanceDecember 31, 2025 1,365,002 $ 6.16 4.9 $ 4,303 Options granted Options exercised (57,027) $ 5.72 $ 244 Options cancelled/forfeited (853) $ 15.86 BalanceMarch 31, 2026 1,307,122 $ 6.17 4.7 $ 3,471 Options exercisableMarch 31, 2026 1,306,061 $ 6.17 4.7 $ 3,469 The total grant date fair value of options vested was $0.1 million and $0.2 million during the three months ended March 31, 2026 and 2025, respectively. No options were granted during the three months ended March 31, 2026 and 2025. As of March 31, 2026, unrecognized compensation expense related to unvested options was not material and is expected to be recognized over a weighted-average period of 1.02 years. Stock-based compensation cost for options capitalized within inventory at March 31, 2026 and 2025 was not material. 2016 Employee Stock Pur …

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Recently Adopted Accounting Pronouncements The Company adopted Accounting Standards Update (ASU) 2025-05, Financial Instruments Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standards Codification (ASC) Topic 606. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. The guidance is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within fiscal years beginning after December 15, 2025. The Company adopted ASU 2025-05 effective January 1, 2026, on a prospective basis. The adoption of ASU 2025-05 did not have a significant impact on the financial statements and related disclosures. Recently Issued Accounting Pronouncements Under Evaluation In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses , which requires additional disclosure of certain amounts included in the expense captions presented on …

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9. Subsequent Events Foundry Services Agreement On April 8, 2026, the Company entered into a foundry services agreement (Foundry Agreement) with Microchip Technology (Microchip) under which Microchip will manufacture 8-inch Toggle MRAM, Tunnel Magneto Resistance Sensors and STT-MRAM wafers for the Company at Microchips Fab 4 facility in Gresham, Oregon. The Foundry Agreement has an initial term of ten years and provides for two-year renewal periods. The Company has reimbursement obligations under the Foundry Agreement estimated at approximately $13.95 million related to the installation of the manufacturing facility, subject to adjustment based on actual documented expenditures. The Foundry Agreement includes minimum purchase commitments that ramp over time to a maximum of 1,300 wafers per quarter. The Company expects capacity for Toggle and Sensor flows to commence approximately 18 months from the effective date of the Foundry Agreement and capacity for STT flows to commence approximately 30 months from the effective date of the Foundry Agreement. Strategic Agreement with U.S. Prime Contractor On April 24, 2026, the Company entered into a subcontract and related statement of work with Amentum Services Inc. in connection with a U.S. government Microelectronics Research, Development, Test and Evaluation program. Under the agreement, the Company will provide research and development, process technology and engineering services to support the development and qualification of dom …

SubsequentEventsTextBlock · excerpt; the full note is in the filing