Business Combination and Goodwill

9 Months Ended

Oct. 03, 2026

Business Combination [Abstract]

Business Combination and Goodwill

Note 4 - Business Combination and Goodwill

On July 27, 2026 (the “Closing Date”), the Company and AMI TopCo, Inc. (“AMI”) consummated the transactions contemplated by the Agreement and Plan of Merger and Reorganization, dated as of May 4, 2026 (the “Merger Agreement”). Under the terms of the Merger Agreement, the Company acquired all of the issued and outstanding shares of AMI (the “AMI Acquisition”), for consideration of cash and shares of Lattice common stock transferred to the holders of AMI common stock and holders of vested AMI options to purchase AMI common stock on the Closing Date as well as additional cash payable for favorable changes to working capital from the estimated amount used as of the Closing Date as compared to the actual amount as of the Closing Date.

The Company funded the cash consideration for the AMI Acquisition (including refinancing outstanding indebtedness of AMI) from cash on hand and borrowings pursuant to the Second Amended and Restated Credit Agreement (the “2026 Credit Agreement”), which provides for a senior secured revolving loan facility of $200 million and a senior secured delayed draw term loan facility of $950 million. Pursuant to the 2026 Credit Agreement, the Company borrowed $925 million in aggregate principal amount of loans under the delayed draw term loan facility at the Closing Date, and a portion of these proceeds were used to fund the cash consideration of the AMI Acquisition.

Purchase Consideration

(In thousands)
Fair value of Lattice common stock issued for outstanding AMI common stock	$	582,760
Cash paid for outstanding AMI common stock and vested options to purchase AMI common stock		733,492
Cash payable for outstanding AMI common stock and vested options to purchase AMI common stock		1,188
Cash paid by Lattice to retire AMI’s credit agreement		272,224
Total purchase consideration	$	1,589,664

We allocated the purchase price to tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. These fair values were based on estimates and assumptions made by management at the time of the AMI Acquisition, as well as additional information available as of the date of issuance of these financial statements. As further additional information becomes available, we may further revise our purchase price allocation during the remainder of the measurement period, which will not exceed 12 months from the Closing Date. Any such revisions or changes may be material. While all aspects of the accounting for the AMI Acquisition remain preliminary, the areas with the most significant preliminary amounts pertain to the fair values of intangible assets and goodwill, and the related effect of the transaction on income tax related accounts, including deferred taxes, as well as the determination of net working capital as calculated under the terms of the Merger Agreement as of the Closing Date. The Company will continue to adjust the provisional estimates as additional information becomes available and final valuation and analyses are completed.

The following table presents our preliminary allocation of the total purchase price:

(In thousands)	Estimated Fair Value
Assets acquired:
Cash and cash equivalents	$	34,370
Accounts receivable		48,328
Contract assets		16,123
Inventories		170
Prepaid expenses and other current assets		3,996
Property and equipment		5,326
Operating lease right-of-use assets		20,025
Intangible assets		551,000
Goodwill		1,054,139
Other long-term assets		986
Total assets acquired		1,734,463
Liabilities assumed:
Accounts payable		6,597
Accrued liabilities		33,920
Current portion of contract liabilities		22,957
Long-term operating lease liabilities, net of current portion		17,146
Deferred income taxes		59,619
Other long-term liabilities		4,560
Total liabilities assumed		144,799
Fair value of net assets acquired	$	1,589,664

The goodwill recognized in the AMI Acquisition is primarily attributable to the assembled workforce, future growth opportunities, and economies of scale expected from the integration of the AMI business.

The following table presents details of the identified intangible assets acquired through the AMI Acquisition:

	Useful Life (In years)		Fair Value (In thousands)
Developed technology		7.0	$	258,000
Customer relationships		10.0		256,000
Trade name / trademarks		7.0		37,000
Total identified intangible assets subject to amortization			$	551,000

At the Closing Date, the aggregate tax basis of the acquired identifiable intangible assets and goodwill was $127.6 million, consisting of $68.0 million attributable to identifiable intangible assets and $59.6 million attributable to goodwill, which are expected to be deductible for tax purposes.

The operations of AMI and its subsidiaries have been included in the Company’s Consolidated Statements of Operations and Comprehensive Income from the Closing Date. From the Closing Date through October 3, 2026, AMI contributed revenue of $39.1 million and incurred a net loss of $14.4 million. Transaction costs of $21.7 million related to the AMI Acquisition for the fiscal quarter ended October 3, 2026 were primarily included in Acquisition related expense on our Consolidated Statements of Operations.

Pro Forma Information

The following unaudited pro forma financial information gives effect to the AMI Acquisition as if it had been completed on December 29, 2024. The unaudited pro forma information was prepared in accordance with the requirements of ASC 805, which is a different basis than pro forma information prepared under Article 11 of Regulation S-X (“Article 11”). As such, it is not directly comparable with historical results for the Company on a stand-alone basis prior to July 27, 2026, historical results for the Company from July 27, 2026 that reflect the AMI Acquisition and are inclusive of the results and operations of AMI, nor our previously provided pro forma financials prepared in accordance with Article 11. The pro forma results for the three and nine months ended October 3, 2026 and September 27, 2025, include the impact of several adjustments to previously reported operating results. The pro forma adjustments are based on historically reported transactions by the respective companies. The pro forma results do not include any anticipated synergies or other expected benefits of the AMI Acquisition.

Significant nonrecurring pro forma adjustments include:

• Transaction costs of $21.7 million and $8.6 million of one-time compensation expenses paid to certain AMI employees are assumed to have occurred on December 29, 2024, and are recognized as if incurred in the first quarter of 2025;

• Permanent financing issued and debt redemptions occurring in connection with the closing of the AMI Acquisition are assumed to have occurred on December 29, 2024, and historical interest expense associated with repaid borrowings is removed;

• Tangible and intangible assets are assumed to be recorded at their assigned fair values as of the pro forma close date of December 29, 2024 and are depreciated or amortized over their estimated useful lives; and

• Revenue accounting policies of AMI are conformed to those of the Company.

The selected unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations would have been had the AMI Acquisition actually occurred on December 29, 2024, nor do they purport to project the future consolidated results of operations.

	Three Months Ended					Nine Months Ended
	October 3,		September 27,			October 3,		September 27,
(In thousands)	2026		2025			2026		2025
Revenue	$	309,894	$	190,828		$	785,879	$	533,186
Net income (loss)	$	24,761	$	(23,394	)	$	27,461	$	(85,409	)

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the underlying net tangible and intangible assets acquired in business combinations. The goodwill balance of $1,369.5 million at October 3, 2026 is comprised of $1,054.1 million from the AMI Acquisition assigned to the AMI segment and $315.4 million from prior acquisitions assigned to the FPGA segment.