UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

[x]

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

For the Quarterly Period Ended June 30, 2019

OR

[ ]

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  [x]    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  [x ]    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

 

[x]

 

 

 

 

 

 

 

Non-accelerated filer

 

[ ]  

 

Smaller Reporting Company

 

[x]

 

 

 

 

 

 

 

 

 

 

 

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  [x]

As of August 2, 2019, the registrant had outstanding 116,318,293 shares of common stock, par value $0.001

 

 


 

QUICKLOGIC CORPORATION

FORM 10-Q

JUNE 30, 2019

 

 

 

 

Page

Part I - Financial Information

 

3

 

 

 

 

Item 1.

Financial Statements (unaudited condensed)

 

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

 

23

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

33

 

 

 

 

Item 4.

Controls and Procedures

 

33

 

 

 

 

Part II - Other Information

 

35

 

 

 

 

Item 1.

Legal Proceedings

 

35

 

 

 

 

Item 1A.

Risk Factors

 

35

 

 

 

 

Item 6.

Exhibits

 

35

 

 

 

 

Signatures

 

 

36

 

 

2


 

PART I. Financial Information

Item 1. Financial Statements

QUICKLOGIC CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value amount)

 

 

 

June 30,

2019

 

 

December 30,

2018

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

28,051

 

 

$

26,363

 

Restricted cash

 

 

100

 

 

 

100

 

Accounts receivable, net of allowances for doubtful accounts of $0 and $0

 

 

1,519

 

 

 

2,209

 

Inventories

 

 

3,502

 

 

 

3,836

 

Other current assets

 

 

1,717

 

 

 

1,775

 

Total current assets

 

 

34,889

 

 

 

34,283

 

Property and equipment, net

 

 

1,110

 

 

 

1,449

 

Right of use assets

 

 

2,417

 

 

 

-

 

Intangible assets

 

 

1,082

 

 

 

-

 

Goodwill

 

 

282

 

 

 

-

 

Other assets

 

 

351

 

 

 

354

 

TOTAL ASSETS

 

$

40,131

 

 

$

36,086

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Revolving line of credit

 

$

15,000

 

 

$

15,000

 

Trade payables

 

 

1,632

 

 

 

1,488

 

Accrued liabilities

 

 

1,307

 

 

 

1,903

 

Lease liabilities-current

 

 

777

 

 

 

316

 

Total current liabilities

 

 

18,716

 

 

 

18,707

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Lease liabilities-non-current

 

 

1,553

 

 

 

108

 

Other long-term liabilities

 

 

-

 

 

 

16

 

Total liabilities

 

 

20,269

 

 

 

18,831

 

Commitments and contingencies (see 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 authorized; 116,121 and 95,513

   shares issued and outstanding as of June 30, 2019 and December 30, 2018, respectively

 

 

116

 

 

 

95

 

Additional paid-in capital

 

 

295,670

 

 

 

284,974

 

Accumulated deficit

 

 

(275,924

)

 

 

(267,814

)

Total stockholders' equity

 

 

19,862

 

 

 

17,255

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

40,131

 

 

$

36,086

 

 

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

3


 

QUICKLOGIC CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2019

 

 

July 1, 2018

 

 

June 30, 2019

 

 

July 1, 2018

 

Revenue

 

$

2,087

 

 

$

3,122

 

 

$

5,281

 

 

$

5,886

 

Cost of revenue

 

 

1,065

 

 

 

1,592

 

 

 

2,280

 

 

 

2,967

 

Gross profit

 

 

1,022

 

 

 

1,530

 

 

 

3,001

 

 

 

2,919

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

3,215

 

 

 

2,366

 

 

 

6,457

 

 

 

5,065

 

Selling, general and administrative

 

 

2,340

 

 

 

2,610

 

 

 

4,786

 

 

 

5,171

 

Total operating expenses

 

 

5,555

 

 

 

4,976

 

 

 

11,243

 

 

 

10,236

 

Loss from operations

 

 

(4,533

)

 

 

(3,446

)

 

 

(8,242

)

 

 

(7,317

)

Interest expense

 

 

(124

)

 

 

(32

)

 

 

(207

)

 

 

(56

)

Interest income and other (expense), net

 

 

50

 

 

 

23

 

 

 

98

 

 

 

9

 

Loss before income taxes

 

 

(4,607

)

 

 

(3,455

)

 

 

(8,351

)

 

 

(7,364

)

Provision for (benefit from) income taxes

 

 

27

 

 

 

29

 

 

 

(241

)

 

 

90

 

Net loss

 

$

(4,634

)

 

$

(3,484

)

 

$

(8,110

)

 

$

(7,454

)

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.05

)

 

$

(0.04

)

 

$

(0.09

)

 

$

(0.09

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

99,226

 

 

 

85,753

 

 

 

98,032

 

 

 

83,176

 

 

Note: Net loss equals to comprehensive loss for all the period presented.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

 

4


 

QUICKLOGIC CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Six Months Ended

 

 

 

June 30,

2019

 

 

July 1,

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(8,110

)

 

$

(7,454

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

592

 

 

 

675

 

Stock-based compensation

 

 

1,742

 

 

 

911

 

Write-down of inventories

 

 

88

 

 

 

126

 

Write-off of equipment

 

 

2

 

 

 

5

 

Tax benefit from acquisition

 

 

(282

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

690

 

 

 

(1,266

)

Inventories

 

 

247

 

 

 

(857

)

Other assets

 

 

(150

)

 

 

(95

)

Trade payables

 

 

77

 

 

 

263

 

Accrued liabilities

 

 

(850

)

 

 

172

 

Other long-term liabilities

 

 

(16

)

 

 

47

 

Net cash used in operating activities

 

 

(5,970

)

 

 

(7,473

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures for property and equipment

 

 

(523

)

 

 

(95

)

Cash received from business acquisition

 

 

20

 

 

 

-

 

Net cash used in investing activities

 

 

(503

)

 

 

(95

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Payment of finance lease obligations

 

 

(194

)

 

 

(236

)

Proceeds from line of credit

 

 

20,000

 

 

 

12,000

 

Payment of line of credit

 

 

(20,000

)

 

 

(12,000

)

Proceeds from issuance of common stock

 

 

9,439

 

 

 

15,855

 

Stock issuance costs

 

 

(891

)

 

 

(1,638

)

Taxes for net issuance of stock awards

 

 

(193

)

 

 

(125

)

Net cash provided by financing activities

 

 

8,161

 

 

 

13,856

 

Net increase in cash, cash equivalents and restricted cash

 

 

1,688

 

 

 

6,288

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

26,463

 

 

 

16,527

 

Cash, cash equivalents and restricted cash at end of period

 

$

28,151

 

 

$

22,815

 

 

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

 

 

 

5


 

QUICKLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands)

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 

Total

 

 

Shares

 

 

Amount

 

 

Paid-In Capital

 

 

Retained Earnings

 

 

Stockholders' Equity

 

Balance at December 30, 2018

 

95,513

 

 

$

95

 

 

$

284,974

 

 

$

(267,814

)

 

$

17,255

 

Common stock issued under stock plans and employee stock purchase plan

 

1,676

 

 

 

2

 

 

 

738

 

 

 

 

 

 

 

740

 

Stock-based compensation

 

 

 

 

 

 

 

951

 

 

 

 

 

 

951

 

Net loss

 

 

 

 

 

 

 

 

 

 

(3,476

)

 

 

(3,476

)

Balance at March 31, 2019

 

97,189

 

 

$

97

 

 

$

286,663

 

 

$

(271,290

)

 

$

15,470

 

Common stock issued under stock plans and employee stock purchase plan

 

532

 

 

 

1

 

 

 

209

 

 

 

 

 

 

 

210

 

Common stock offering, net of issuance costs

 

18,400

 

 

 

18

 

 

 

8,007

 

 

 

 

 

 

8,025

 

Stock-based compensation

 

 

 

 

 

 

 

791

 

 

 

 

 

 

791

 

Net loss

 

 

 

 

 

 

 

 

 

 

(4,634

)

 

 

(4,634

)

Balance at June 30, 2019

 

116,121

 

 

$

116

 

 

$

295,670

 

 

$

(275,924

)

 

$

19,862

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Paid-In Capital

 

 

Retained Earnings

 

 

Total

 

Balance at December 31, 2017

 

80,536

 

 

$

80

 

 

$

268,833

 

 

$

(254,035

)

 

$

14,878

 

Common stock issued under stock plans and employee stock purchase plan

 

91

 

 

 

 

 

 

(47

)

 

 

 

 

 

(47

)

Stock-based compensation

 

 

 

 

 

 

 

432

 

 

 

 

 

 

432

 

Net loss

 

 

 

 

 

 

 

 

 

 

(3,970

)

 

 

(3,970

)

Balance at April 1, 2018

 

80,627

 

 

$

80

 

 

$

269,218

 

 

$

(258,005

)

 

$

11,293

 

Common stock issued under stock plans and employee stock purchase plan

 

434

 

 

 

 

 

 

 

233

 

 

 

 

 

 

233

 

Common stock offering, net of issuance costs

 

13,514

 

 

 

14

 

 

 

13,889

 

 

 

 

 

 

13,903

 

Stock-based compensation

 

 

 

 

 

 

 

479

 

 

 

 

 

 

479

 

Net loss

 

 

 

 

 

 

 

 

 

 

(3,484

)

 

 

(3,484

)

Balance at July 1, 2018

 

94,575

 

 

$

94

 

 

$

283,819

 

 

$

(261,489

)

 

$

22,424

 

 

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

 

 

6


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — The Company and Basis of Presentation

QuickLogic Corporation, or QuickLogic or the Company was founded in 1988 and reincorporated in Delaware in 1999. The Company enables Original Equipment Manufacturers, or OEMs to maximize battery life for highly differentiated, immersive user experiences with Smartphone, Wearable, Hearable, Tablet and Internet-of-Things, or IoT devices. QuickLogic delivers these benefits through industry leading ultra-low power customer programmable System on Chip, or SoC semiconductor solutions, embedded software, and algorithm solutions for always-on voice and sensor processing, and enhanced visual experiences. 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, or FPGAs. The Company’s wholly owned subsidiary, SensiML Corporation, or SensiML, provides Analytics Toolkit, which is used in many of the applications where the Company’s ArcticPro™ eFPGA intellectual property, or 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, or 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 condensed consolidated financial statements be read in conjunction with the Company's Form 10-K for the year ended December 30, 2018, which was filed with the Securities and Exchange Commission, or SEC, on March 15, 2019, as amended. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full 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 second fiscal quarters for 2019 and for 2018 ended on June 30, 2019 and July 1, 2018, respectively.

Liquidity

The Company has financed its operations and capital investments through sales of common stock, finance leases, bank lines of credit and cash flows from operations. As of June 30, 2019, the Company's principal sources of liquidity consisted of cash and cash equivalents and restricted cash of $28.2 million, including $15.0 million drawn down from its revolving line of credit with Heritage Bank of Commerce, or Heritage Bank. The maturity date for loans under this revolving facility, or the Revolving Facility, is September 28, 2020.

On June 21, 2019, the Company issued an aggregate of 18.4 million shares of common stock, $0.001 par value, including the exercise of option for overallotment of 2.4 million shares by the underwriters, in an underwritten public offering at a price of $ 0.50 per share. The company received net proceeds of approximately $8.3 million, after deducting underwriting commissions and other offering-related expenses paid in the second quarter of 2019.

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; market acceptance of existing and new products including solutions based on its ArcticLink®, PolarPro® platforms, eFPGA, EOS S3 SoC, Quick AI solution, SensiML software and Freedom Aware SoC Templates; fluctuations in revenue as a result of product end-of-life; fluctuations in revenue as a result of the stage in the product life cycle of its customers’ products; costs of securing access to and availability of adequate manufacturing capacity; levels of inventories; wafer purchase commitments; customer credit terms; the amount and timing of research and development expenditures; the timing of new product introductions; production volumes; product quality; sales and marketing efforts; the value and liquidity of its investment portfolio; changes in operating assets and liabilities; the ability to obtain or renew debt financing and to remain in compliance with the terms of existing credit 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; 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.

7


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

Over the longer term, the Company anticipates that sales generated from its new product offerings, existing cash and cash equivalents, together with financial resources from its Revolving Facility with the 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 September 2020, 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.

Principles of Consolidation

The 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 expense, net in the unaudited condensed consolidated statements of operations.

Uses of Estimates

The preparation of these 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 investments, valuation of long-lived assets including mask sets, valuation of goodwill 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, or 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 information that may include market conditions and other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customers. In these instances, the Company may 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 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 14 for information regarding concentrations associated with accounts receivable.

8


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

Note 2 — Significant Accounting Policies

During the six-month period ended June 30, 2019, 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 December 30, 2018 except the new accounting standards adopted during the first six months of 2019. For a discussion of the significant accounting policies, please see the Annual Report on Form 10-K for the fiscal year ended December 30, 2018, filed with the SEC on March 15, 2019, as amended.

Revenue Recognition

The Company applies Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers, to recognize revenue. The guidance states that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Under the new standard revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration it expects to receive in exchange for those products or services.

The Company determines revenue recognition through the following steps:

 

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, a performance obligation is satisfied

As part of its assessment of each contract, the Company evaluates certain factors including the customer’s ability to pay, or credit risk. For each contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance obligations. In determining the transaction price, the price stated on the purchase order is typically fixed and represents the net consideration to which the Company expects to be entitled, and therefore there is no variable consideration. As the Company’s standard payment terms are less than one year, the Company has elected, as a practical expedient, to not assess whether a contract has a significant financing component. The Company allocates the transaction price to each distinct product based on its relative stand-alone selling price. The product price as specified on the purchase order is considered the stand-alone selling price as it is an observable source that depicts the price as if sold to a similar customer in similar circumstances.

Leases

The Company adopted Accounting Standards Update, or ASU, No. 2016-02, Leases (Topic 842) and related ASUs, which provide supplementary guidance and clarifications on December 31, 2018, utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of the first quarter of 2019. Additionally, the Company elected the practical expedient approach and did not reassess whether any contracts that existed prior to adoption have or contain leases or the classification of our existing leases.

Under Topic 842, all significant lease arrangements are generally recognized at lease commencement. Operating lease right-of-use, or ROU, assets and lease liabilities are recognized at the commencement date. A ROU asset and corresponding lease liability is not recorded for leases with an initial term of 12 months or less (short term leases) and the Company recognizes lease expense for these leases as incurred over the lease term.

ROU assets represent our right to use an underlying asset during the reasonably certain lease terms and lease liabilities represent our obligation to make lease payments arising from the lease. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company primarily uses its incremental borrowing rate, based on the information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments related to initial direct cost and prepayments and excludes lease incentives. Lease expense is recognized on a straight-line basis over the

9


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. Upon adoption of ASU No. 2016-02, the Company recognized right-of-use assets of approximately $975,000 and lease liabilities of approximately $939,000 on the Company’s Consolidated Balance Sheet as of March 31, 2019, with no material impact to its Consolidated Statements of operations. As of June 30, 2019, the Company recognized right-of-use assets of approximately $2.4 million and lease liability of approximately $2.3 million on the Company’s Consolidated Balance Sheet. See Note 8 and 15 to the Unaudited Consolidated Financial Statements for more details.

Business Combinations 

The Company recognizes assets acquired (including goodwill and identifiable intangible assets) and liabilities assumed at fair value on the acquisition date. Subsequent changes to the fair value of such assets acquired and liabilities assumed are recognized in earnings, after the expiration of the measurement period, a period not to exceed 12 months from the acquisition date. Acquisition-related expenses and acquisition-related restructuring costs are recognized in earnings in the period in which they are incurred.

Goodwill and Intangible Assets

Goodwill represents the excess fair value of consideration transferred over the fair value of net assets acquired in business combinations. The carrying value of goodwill and indefinite lived intangible assets are not amortized, but are annually tested for impairment and more often if there is an indicator of impairment.

Intangible assets with finite useful lives are amortized on a straight-line basis over the periods benefited. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset or asset group from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to estimate future cash flows and the fair value of long-lived assets.

Restricted cash

Restricted cash represents amounts pledged as cash security related to the Silicon Valley Bank credit cards.

New Accounting Pronouncements

Recently adopted accounting pronouncements:

In January 2017, the FASB issued Accounting Standards Update ASU No. 2017-04, Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill. Goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Furthermore, the ASU eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step 2 of the goodwill impairment test. The guidance will be applied prospectively, and is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for any impairment tests performed on testing dates after January 1, 2017. The Company has elected to early adopt this guidance effective December 31, 2018 for goodwill impairment test, which will be performed during the fourth quarter of fiscal 2019. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In February 2018, FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income. The new standard provides companies with an option to reclassify stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act, or TCJA, from accumulated other comprehensive income to retained earnings. The guidance will be effective for the Company beginning in the first quarter of 2019 with early adoption permitted, and would be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the tax rate as a result of TCJA is recognized. The Company adopted this ASU on December 31, 2018 with no material impact on its results of operations, financial position and cash flows.

10


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

In March 2018, FASB issued ASU No. 2018-05, Income Taxes (Topic 740). The new standard allows to insert the SEC’s interpretive guidance from Staff Accounting Bulletin, or SAB, No.118 into the income tax accounting codification under U.S. GAAP. The ASU permits companies to use provisional amounts for certain income tax effects of the Tax Act during a one-year measurement period. The provisional accounting impacts for the Company may change in future reporting periods until the accounting analysis is finalized, which will occur no later than the first quarter of fiscal 2019. The Company completed SAB No.118 analysis with no material impact to the consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Improvements to nonemployee share-based payment accounting. Currently, share-based payments to nonemployees are accounted for under Subtopic 505-50, which significantly differs from the guidance for share-based payments to employees under Topic 718. This ASU supersedes Subtopic 505-50 by expanding the scope of Topic 718 to include nonemployee awards and generally aligning the accounting for nonemployee awards with the accounting for employee awards. The effective date for public companies is for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the effective date is fiscal years beginning after December 15, 2019. The Company adopted this ASU on December 31, 2018 with no material impact on its results of operations, financial position and cash flows.

Recently issued accounting pronouncements not yet adopted:

In August 2018 the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This new standard modifies certain disclosure requirements on fair value measurements. This new standard will be effective for public companies on January 1, 2020. The Company is currently evaluating the impact of our pending adoption of the new standard on the consolidated financial statements.

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 six months ended June 30, 2019 and July 1, 2018, 8.0 million and 7.3 million of common shares 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, respectively. 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 5.4 million shares were issued in connection with May 29, 2018 stock offering were also not included in the diluted loss per share calculation of the three and six months ended June 30, 2019 as they were also considered anti-dilutive due to the net loss the Company experienced during these periods.

11


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

Note 4 — Balance Sheet Components

The following table provides details relating to certain balance sheet line items as of June 30, 2019, and December 30, 2018 (in thousands):

 

 

 

June 30,

2019

 

 

December 30,

2018

 

Inventories:

 

 

 

 

 

 

 

 

Raw materials

 

$

196

 

 

$

-

 

Work-in-process

 

 

2,481

 

 

 

3,120

 

Finished goods

 

 

825

 

 

 

716

 

 

 

$

3,502

 

 

$

3,836

 

Other current assets:

 

 

 

 

 

 

 

 

Prepaid expenses

 

$

1,360

 

 

$

1,483

 

Other

 

 

357

 

 

 

292

 

 

 

$

1,717

 

 

$

1,775

 

Property and equipment:

 

 

 

 

 

 

 

 

Equipment

 

$

10,729

 

 

$

10,607

 

Software

 

 

1,823

 

 

 

2,788

 

Furniture and fixtures

 

 

55

 

 

 

42

 

Leasehold improvements

 

 

489

 

 

 

712

 

 

 

 

13,096

 

 

 

14,149

 

Less: Accumulated depreciation and amortization

 

 

(11,986

)

 

 

(12,700

)

 

 

$

1,110

 

 

$

1,449

 

Accrued liabilities:

 

 

 

 

 

 

 

 

Employee related accruals

 

$

739

 

 

$

1,154

 

Other

 

 

568

 

 

 

749

 

 

 

$

1,307

 

 

$

1,903

 

 

Note 5 — Business Acquisition

SensiML Acquisition

On January 3, 2019, the Company entered into a stock purchase agreement, or the Stock Purchase Agreement, with SensiML for the purchase of all of its issued and outstanding common stock in exchange for the Company’s common stock, or the SensiML Acquisition.

SensiML has a software toolkit enabling IoT developers to quickly and easily create smart devices, transforming rich sensors into actionable event detectors.

SensiML’s 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 SensiML Analytics Toolkit enables OEMs to quickly and easily leverage the power of local AI in edge, endpoint and wearable designs without the need for significant Data Science or Firmware Engineering resources.

The results of operations for the Company for the three and six months ended June 30, 2019 include operating activity for SensiML since its acquisition date of January 3, 2019. For the six months ended June 30, 2019, revenues attributable to SensiML included in the condensed consolidated statement of operations were not significant. For the three and six months ended June 30, 2019, charges of $38,000 and $74,000, respectively, were attributable to the amortization of purchased intangible assets were included in the statements of operations for respective periods. Deal costs associated with the acquisition were $104,000 for the six months period ended June 30, 2019. Deal costs were included in general and administrative expenses in the Company’s consolidated results of operations.

12


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

Purchase Price Allocation

Under the purchase accounting method, the total preliminary purchase price was allocated to SensiML’s net tangible and intangible assets based upon their estimated fair values as of the acquisition date. The excess purchase price over the value of the net tangible and identified intangible assets was recorded as goodwill. During the measurement period, which can be no more than one year from the date of acquisition, the Company expects to continue to obtain information to determine the final fair value of the net assets acquired at the acquisition date during the measurement period. Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. Thus, the provisional measurements of fair value discussed above are subject to change. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill.

Intangible assets associated with the acquisition is primarily attributable to the future technology, market presence and knowledgeable and experienced workforce. The fair value assigned to identifiable intangible assets acquired was determined using the income approach taking into account the Company’s consideration of a number of inputs, including an independent third-party analysis that was based upon estimates and assumptions provided by the Company. These estimates and assumptions were determined through established and generally accepted valuation techniques. The estimated fair value of the tangible and intangible assets acquired was allocated at SensiML’s acquisition date. Although goodwill is not amortized for financial accounting purposes, it is amortized in its entirely for tax purposes over fifteen years. Goodwill recognized upon acquisition is not expected to be deductible for income tax purposes.

The Stock Purchase Agreement contains customary representations and warranties between the Company and SensiML, who agreed to indemnify each other for certain breaches of representations, warranties, covenants and other specified matters. Approximately $200,000 in value of the Company’s common stock of the purchase price was placed in escrow as security for post-closing working capital adjustments.

Note 6 — Intangible Assets

The following table provides the details of the carrying value of intangible assets recorded from the acquisition of SensiML during the six months of 2019 (in thousands):

 

 

 

June 30, 2019

 

 

 

Gross Carrying Amount

 

 

Accumulated Amortization

 

 

Net Carrying Amount

 

Developed technology

 

$

959

 

 

$

(48

)

 

$

911

 

Customer relationships

 

 

81

 

 

 

(20

)

 

 

61

 

Trade names and trade marks

 

 

116

 

 

 

(6

)

 

 

110

 

Total acquired identifiable intangible assets

 

$

1,156

 

 

$

(74

)

 

$

1,082

 

 

The following table provides the details of annual amortization of intangible assets, based upon the current useful lives as of June 30, 2019 (in thousands):

 

 

Amount

 

Annual Fiscal Years

 

 

 

 

2019 (remaining period)

 

$

75

 

2020

 

 

148

 

2021

 

 

107

 

2022

 

 

107

 

2023

 

 

107

 

Thereafter

 

 

538

 

Total

 

$

1,082

 

 

13


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

Note 7 — Debt Obligations

Revolving Line of credit

On September 28, 2018, the Company entered into a Loan Agreement with Heritage Bank. The Loan Agreement provided for, among other things, a Revolving Facility with aggregate commitments of $9,000,000, which was increased to $15,000,000 by an amended and restated agreement dated December 21, 2018. The maturity date for loans under the Revolving Facility is September 28, 2020.

On December 21, 2018, the Company entered into an Amended and Restated Loan and Security Agreement, or the Amended and Restated Loan Agreement with Heritage Bank to replace in its entirety the Loan and Security Agreement entered on September 28, 2018. The Amended and Restated Loan Agreement increases the Revolving Facility from $9,000,000 to $15,000,000. The Amended and Restated Loan Agreement requires the Company to maintain at least $3,000,000 in unrestricted cash at Heritage Bank. The Company was in compliance with all loan covenants under the Amended and Restated Loan Agreement as of the end of the current reporting period.

Loans under the Revolving Facility bear interest at a rate equal to one half of one percentage point (0.50%) above the variable rate of interest, per annum, that appears in The Wall Street Journal from time to time, whether or not such announced rate is the lowest rate available from Heritage Bank. As of June 30, 2019 and December 30, 2018, the Company had $15.0 million of revolving debt outstanding with an interest rate of 6.0% per annum.

Note 8 — Leases

The Company entered into operating leases for office space for its headquarter, domestic and foreign subsidiaries and sales offices. Finance leases are primarily engineering design software. Operating leases generally have lease terms of 1 year to 5 years. Finance leases are generally 2 years to 3 years. During the second quarter of 2019, the Company recognized right-of-use assets of approximately $1.7 million and lease liability of approximately $1.7 million relating to the new operating leases signed for the premises of its headquarters in San Jose and its subsidiary SensiML in Oregon.

The following table provides the details of operating and finance lease costs (in thousands):

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30, 2019

 

 

June 30, 2019

 

Operating lease costs:

 

 

 

 

 

 

 

Fixed

$

259

 

 

$

411

 

Variable

 

-

 

 

 

-

 

Short term

 

9

 

 

 

27

 

Total

 

268

 

 

 

438

 

Finance lease costs:

 

 

 

 

 

 

 

Amortization of ROU asset

 

91

 

 

 

182

 

Interest

 

5

 

 

 

11

 

Total

$

96

 

 

$

193

 

14


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

The following table provides the details of supplemental cash flow information (in thousands):

 

 

Six Months Ended

 

 

 

June 30, 2019

 

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

 

 

 

 

Operating cash flows used for operating leases

 

$

451

 

Operating cash flows used for finance leases

 

 

10

 

Financing cash flows used for financing leases

 

 

194

 

  Total

 

$

655

 

Right-of-use assets obtained in exchange for obligations:

 

 

 

 

Operating leases

 

$

2,076

 

Finance leases

 

 

341

 

  Total

 

$

2,417

 

The following table provides the details of right-of-use assets and lease liabilities as of June 30, 2019 (in thousands):

 

 

June 30, 2019

 

Right-of-use assets:

 

 

 

 

Operating leases

 

$

2,076

 

Finance leases

 

 

341

 

   Total

 

$

2,417

 

Lease liabilities:

 

 

 

 

Operating leases

 

 

2,100

 

Finance leases

 

 

230

 

  Total

 

$

2,330

 

 

The following table provided the details of future lease payments for operating and finance leases as of June 30, 2019 (in thousands):

.

Annual Fiscal Years

 

Operating

 

 

Finance

 

2019 (Remaining period)

 

$

339

 

 

$

183

 

2020

 

 

613

 

 

 

64

 

2021

 

 

494

 

 

 

-

 

2022

 

 

409

 

 

 

-

 

2023

 

 

421

 

 

 

-

 

Thereafter

 

 

106

 

 

 

-

 

  Total lease payments

 

 

2,382

 

 

 

247

 

Less: Interest

 

 

(282

)

 

 

(17

)

Present value of lease liabilities

 

$

2,100

 

 

$

230

 

 

The following table provides the details of lease terms and discount rates as of June 30, 2019:

 

 

June 30, 2019

 

Right-of-use assets:

 

 

 

 

Weighted-average remaining lease term (years)

 

 

 

 

Operating leases

 

4.17

 

Finance leases

 

 

0.76

 

Weighted-average discount rates:

 

 

 

 

Operating leases

 

 

5.99

%

Finance leases

 

 

7.00

%

 

15


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

Note 9 — Fair Value Measurements

Pursuant to the accounting guidance for fair value measurements and its subsequent updates, fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market and assumptions that market participants would use when pricing the asset or liability.

Our cash and cash equivalents include money market account balance of $26.7 million and money market funds of $262,000 as of June 30, 2019 and December 30, 2018, respectively. Investment in money market funds was classified within level 1 of the fair value hierarchy because they were valued using quoted market prices for identical assets. Fair value of the money market account balance with Heritage Bank equals to book value.  

Note 10 — Stockholders' Equity

Common Stock and Preferred Stock

As of June 30, 2019, the Company was authorized to issue 200 million shares of common stock and had 10 million shares of authorized but unissued shares of preferred stock. Without any further vote or action by the Company's stockholders, the Board of Directors has the authority to determine the powers, preferences, rights, qualifications, limitations or restrictions granted to or imposed upon any wholly unissued shares of undesignated preferred stock.

Issuance of Common Stock

On June 21, 2019, the Company issued an aggregate of 18.4 million shares of common stock, including the exercise of option for overallotment of 2.4 million shares by the underwriters, $0.001 par value, in an underwritten public offering at a price of $ 0.50 per share. The company received net proceeds from the offering of approximately $8.3 million, net of underwriter’s commission and other offering expenses paid in the second quarter of 2019. 

On March 15, 2019, the Company filed a shelf registration statement on Form S-3, under which the Company may, from time to time, sell securities on one or more offerings up to a total amount of $75 million. The Company’s shelf registration statement was declared effective on March 29, 2019.

In May, 2018, the company issued an aggregated of 13.5 million shares of common stock, and warrants to purchase up to an aggregate of 5.4 million shares of common stock in a confidentially marketed underwritten offering.  The common stock and warrants were issued in units, or the Units, with each Unit consisting of (i) one share of common stock and (ii) a warrant to purchase 0.40 of a share of common stock, at a price of $1.15 per Unit. The Company received total net proceeds from the offering of $13.9 million.

The warrants are exercisable any time for a period of 60 months from the date of issuance on May 29, 2018, and are exercisable at a price of $1.38 per share. The Company allocated the proceeds between the common stock and the warrants based on the relative fair value of each on the date of issuance. The estimated grant date fair value was $0.57 per warrant and was calculated based on the following assumptions used in the Black-Scholes model: expected term of 5 years, risk-free interest rate of 2.58%, expected volatility of 52.75% and expected dividend of zero.

16


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

Note 11 — Employee Stock Plans

2019 Stock Plan

On April 24, 2019, the Company’s Board of Directors and shareholders approved the 2019 Stock Plan, or 2019 Plan, to replace the 2009 stock Plan, or the 2009 Plan. Under the 2019 Plan, 5,000,000 shares of common stock are available for grants, plus any shares subject to any outstanding options or other awards granted under the Company’s 2009 Stock Plan that expire, are forfeited, cancelled, returned to the Company for failure to satisfy vesting requirements, settled for cash or otherwise terminated without payment being made thereunder. The remaining balance of available shares under the 2009 Plan of 4,186,979 were cancelled as of April 24, 2019.

Employee Stock Purchase Plan

The 2009 Employee Stock Purchase Plan, or the 2009 ESPP, was adopted in March 2009. The 2009 ESPP was amended by the Board of Directors in January 2015 and in February 2017, and was approved by the Company's stockholders on April 23, 2015 and April 26, 2017, to reserve an additional 1.0 million and 1.5 million shares of common stock, respectively, for issuance under the 2009 ESPP.

As of June 30, 2019, approximately 4.8 million shares of the Company’s common stock were reserved for issuance under the 2009 ESPP. On May 6, 2019, the Board of Directors approved the extension of the term of the 2009 ESSP to March 5, 2029, which also requires the stockholders’ ratification within 12 months of the approval by the Board of Directors. The Company plans to submit the extension of the term of the 2009 ESSP for our stockholders to ratify in the next annual general meeting, if not sooner.

Note 12 — Stock-Based Compensation

Stock-based compensation expense included in the Company's consolidated financial statements for the three and six months ended June 30, 2019 and July 1, 2018 was as follows (in thousands):

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

2019

 

 

July 1,

2018

 

 

June 30,

2019

 

 

July 1,

2018

 

Cost of revenue

 

$

18

 

 

$

35

 

 

$

44

 

 

$

69

 

Research and development

 

 

532

 

 

 

207

 

 

 

1,187

 

 

 

390

 

Selling, general and administrative

 

 

241

 

 

 

237

 

 

 

511

 

 

 

452

 

Total costs and expenses

 

$

791

 

 

$

479

 

 

$

1,742

 

 

$

911

 

 

No stock-based compensation was capitalized during any period presented above.

No stock options were granted during the three and six-month periods ended June 30, 2019 and July 1, 2018. As of June 30, 2019 and July 1, 2018, the fair value of unvested stock options, net of expected forfeitures, was approximately $102,000 and $200,000, respectively. The remaining unrecognized stock-based compensation expense relating to stock options is expected to be recognized over a weighted average period of 2.59 years as of June 30, 2019.

17


QUICKLOGIC CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

 

Stock-Based Compensation Award Activity

The following table summarizes the activity in the shares available for grant under the 2019 Plan and 2009 Plan during the six months ended June 30, 2019 (in thousands):

 

 

Shares available for grants

 

 

2019 Plan

 

 

2009 Plan

 

Balance at December 30, 2018

 

-

 

 

 

6,760

 

Authorized

 

5,000

 

 

 

-

 

RSUs granted

 

(794

)

 

 

(3,355

)

RSUs forfeited or expired

 

184

 

 

 

762

 

Options forfeited

 

15

 

 

 

20

 

Plan shares expired

 

-

 

 

 

(4,187

)

Balance at June 30, 2019

 

4,405

 

 

 

-

 

 

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 six months ended June 30, 2019:

 

 

 

Number of

Shares

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Term

 

 

Aggregate

Intrinsic

Value

 

 

 

(in thousands)

 

 

 

 

 

 

(in years)

 

 

(in thousands)

 

Balance outstanding at December 30, 2018

 

 

3,201

 

 

$

2.18

 

 

 

 

 

 

 

 

 

Forfeited or expired

 

 

(580

)

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

 

Balance outstanding at June 30, 2019