Item 1A. Risk Factors This Quarterly Report on Form 10-Q should be read in conjunction with the risk factors included in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 29, 2024. There have been no material changes to the risk factors disclosed under the heading Risk Factors in our Annual Report on Form 10-K for the year ended December 29, 2024. 2024, except for the risk factors set forth below. We may not realize the anticipat ed benefits of the Transaction and any benefit may take longer to realize than we expect. On June 30, 2025, we completed our acquisition of substantially all of the property, plant and equipment and employees and certain other assets and liabilitie s related to Infineon Technologies AGs 200 mm fab (Fab 25) in Austin, Texas (the Transaction). The success of the Transaction will depend, in part, on our ability to realize the anticipated benefits of the integration of Fab 25s operations with our existing operations, and there are uncertainties inherent in such an integration. We will be required to devote significant management attention and resources to integrating Fab 25s operations. Delays or unexpected difficulties in the integration process could adversely affect our business, financial results and financial condition. Even if we are able to integrate Fab 25s operations successfully, this integration may not result in the realization of the full benefits of revenue synergies, cost savings and operational efficiencies that we expect or the achievement of these benefits within a reasonable period of time or at all. Increased leverage may harm our financial condition and results of operations. As of June 29, 2025 and pro forma for indebtedness incurred in connection with the completion of the Transaction, we had $179.1 million of total debt on a consolidated basis. We funded the purchase price for the Transaction of approximately $93 million with borrow ings under our Loan Agreement (as defined below), which materially increased our indebtedness. This increase and any future increases in our level of indebtedness will have several important effects on our future operations, including, without limitation: we have additional cash requirements to support the payment of interest on our outstanding indebtedness; increases in our outstanding indebtedness and leverage may increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressure; our ability to obtain additional financing for working capital, capital expenditures, general corporate and other purposes may be reduced; our flexibility in planning for, or reacting to, changes in our business and our industry may be reduced; and our flexibility to make acquisitions and develop technology may be limited. Our ability to make payments of principal and interest on our indebtedness depends upon our future performance, which will be subject to general economic conditions and financial, business and other factors affecting our consolidated operations, many of which are beyond our control. If we are unable to generate sufficient cash flow from operations in the future to service our debt and meet our other cash requirements, we may be required, among other things: to seek additional financing in the debt or equity markets; to refinance or restructure all or a portion of our indebtedness; to sell selected assets or businesses; or to reduce or delay planned capital or operating expenditures. Such measures might not be sufficient to enable us to service our debt and meet our other cash requirements. In addition, any such financing, refinancing or sale of assets might not be available at all or on economically favorable terms. 46 s We may need to raise additional capital or financing to continue to execute and expand our business. We may need to raise additional capital to expand or if positive cash flow is not achieved and m aintained. As of June 29, 2025, our available cash balance, not including cash held by a variable interest entity that we consolidate, was $49.0 million. We may be required to pursue sources of additional capital through various means, including joint venture projects, strategic partnerships and alliances, licensing or sale and leasing arrangements, and debt or equity financings, including sales of our common stock under our at the market offering program. If we raise additional equity or securities convertible or exchangeable for our equity, our stockholders may experience significant dilution of their ownership interests and the per share value of our common stock could decline. Newly-issued securities may include preferences, superior voting rights, and the issuance of warrants or other convertible securities that could have additional dilutive effects. The incurrence of additional indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through joint venture projects, strategic partnerships and alliances, licensing or sale and leasing arrangements, we may have to relinquish valuable rights to our technologies or other assets, or grant licenses on terms unfavorable to us. Further, we may incur substantial costs in pursuing future capital or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses, and other costs. We also may be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which could adversely impact our financial condition and results of operations. Our ability to obtain needed financing may be impaired by such factors as the weakness of capital markets, and the fact that we have not been profitable, which could impact the availability and cost of future financings. In addition, our ability to execute our operating strategy is dependent on our ability to maintain liquidity and access capital through our Amended and Restated Loan and Security Agreement (as amended, the Loan Agreement), which provides for a revolving line of credit of up to $350 million with scheduled maturity date of June 30, 2030, and other sources of financing. Borrowing under the Loan Agreement is limited by a borrowing base of specified advance rates applicable to billed accounts receivable, unbilled accounts receivable, inventory, and equipment, subject to various conditions and limits as provided in the Loan Agreement. The Loan Agreement also provides for borrowing base sublimits applicable to each of unbilled accounts receivable and equipment. We have also obtained a support letter from Oxbow Industries, an affiliate of our principal stockholder, to provide funding in an amount up to $12.5 million, if necessary, to enable us to meet our obligations as they become due. Pursuant to the support letter, such funding would be in the form of a loan or equity investment. However, if such funding is required and Oxbow Industries does not provide additional funding to us, our liquidity, business, results of operations and financial condition could be materially and adversely impacted. The support letter expires March 18, 2026. We believe our expected results of operations, cash and cash equivalents on hand, available borrowings from our Loan Agreement and the support letter from Oxbow Industries, as needed, will provide sufficient liquidity to fund our operations for the next twelve months from the date of issuance of the consolidated financial statements in this Quarterly Report on Form 10-Q; however, we may need to seek additional financing and cannot provide any assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. If the amount of capital we are able to raise from financing activities, together with our revenues from operations, is not sufficient to satisfy our capital needs, we may have to reduce our operations accordingly, which could materially and adversely impact our business, results of operations and financial condition. Our indebtedness could adversely affect our cash flows and limit our flexibility to raise additional capital. We have a significant amount of indebtedness and may need to incur additional debt to support our growth. As of June 29, 2025 and pro forma for indebtedness incurred in connection with the completion of the Transaction, our indebtedness totaled $ 179.1 million, consisting of $137.1 million under our Loan Agreement currently with an interest rate of 8.7%, subject to adjustment in accordance with the terms of the Loan Agreement, $7.9 million of tool financing, which is inclusive of a $4.6 million obligation from a sale leaseback transaction entered into in the second quarter of 2025 (see Note 12 - Leases ), and a $34.1 million financing from the sale of the land and building representing our corporate headquarters in Minnesota (the Fina ncing). Recent significant increases in interest rates have increased our borrowing costs and continued increases in interest rates will further increase the cost of servicing our outstanding indebtedness, refinancing our outstanding indebtedness, and increase the cost of any new indebtedness. Under the terms of the Financing, we entered into an agreement to lease the land and building for our corporate headquarters from Oxbow Realty Partners, LLC (Oxbow Realty), an affiliate of our principal stockholder, for initial payments of $0.4 million per month over 20 years terminating on September 29, 2040 . The monthly payments are subject to a 47 s 2% increase each year during the term of the lease. We are also required to make certain customary payments constituting additional rent, including certain monthly reserve, insurance, and tax payments, in accordance with the terms of the lease. Our substantial amount of debt could have important consequences, and could: require us to dedicate a substantial portion of our cash and cash equivalents to make interest, rent, and principal payments, reducing the availability of our cash and cash equivalents and cash flow from operations to fund future capital expenditures, working capital, execution of our strategy and other general corporate requirements; increase our cost of borrowing and limit our ability to access additional debt to fund future growth; increase our vulnerability to general adverse economic and industry conditions and adverse changes in governmental regulations; limit our flexibility in planning for, or reacting to, changes in our business and industry, which may place us at a disadvantage compared with our competitors; and limit our ability to borrow additional funds, even when necessary to maintain adequate liquidity, which would also limit our ability to further expand our business. The occurrence of any of the foregoing factors could have a material adverse effect on our business, results of operations and financial condition.