EVERSPIN TECHNOLOGIES INC. 10-Q

Item 1. Financial Statements EVERSPIN TECHNOLOGIES, INC. Condensed Balance Sheets (In thousands, except share and per share amounts) (Unaudited) September 30, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 45,257 $ 42,097 Accounts receivable, net 8,688 11,722 Inventory 11,819 9,110 Prepaid expenses and other current assets 874 1,272 Total current assets 66,638 64,201 Property and equipment, net 4,074 3,220 Intangible assets, net 2,146 3,416 Right-of-use assets 3,581 4,549 Other assets 3,833 2,403 Total assets $ 80,272 $ 77,789 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 1,808 $ 2,278 Accrued liabilities 2,980 2,449 Deferred revenue 965 78 Lease liabilities, current portion 1,361 1,306 Contract obligations 2,523 2,034 Software liabilities, current portion 1,769 1,769 Total current liabilities 11,406 9,914 Lease liabilities, net of current portion 2,307 3,336 Software liabilities, net of current portion 465 1,784 Long-term income tax liability 273 162 Total liabilities $ 14,451 $ 15,196 Commitments and contingencies (Note 5) Stockholders’ equity: Preferred stock, $ 0.0001 par value per share; 5,000,000 shares authorized; no shares issued and outstanding as of September 30, 2025 and December 31, 2024 — — Common stock, $ 0.0001 par value per share; 100,000,000 shares authorized; 22,756,779 and 22,059,697 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 2 2 Additional paid-in capital 204,470 199,460 Accumulated deficit ( 138,651 ) ( 136,869 ) Total stockholders’ equity 65,821 62,593 Total liabilities and stockholders’ equity $ 80,272 $ 77,789 The accompanying notes are an integral part of these condensed financial statements. 3 Table of Contents EVERSPIN TECHNOLOGIES, INC. Condensed Statements of Operations and Comprehensive Income (Loss) (In thousands, except share and per share amounts) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Product sales $ 12,690 $ 10,443 $ 34,807 $ 31,190 Licensing, royalty, patent, and other revenue 1,370 1,650 5,592 5,969 Total revenue 14,060 12,093 40,399 37,159 Cost of product sales 6,628 5,751 18,823 16,989 Cost of licensing, royalty, patent, and other revenue 226 390 849 842 Total cost of sales 6,854 6,141 19,672 17,831 Gross profit 7,206 5,952 20,727 19,328 Operating expenses: Research and development 3,583 3,384 10,519 10,259 General and administrative 3,690 3,363 11,170 10,653 Sales and marketing 1,478 1,320 4,476 3,950 Total operating expenses 8,751 8,067 26,165 24,862 Loss from operations ( 1,545 ) ( 2,115 ) ( 5,438 ) ( 5,534 ) Interest income 432 463 1,263 1,325 Other income, net 1,164 3,933 2,394 3,862 Net income (loss) before income taxes 51 2,281 ( 1,781 ) ( 347 ) Income tax benefit (expense) 3 ( 10 ) ( 1 ) ( 86 ) Net income (loss) and comprehensive income (loss) $ 54 $ 2,271 $ ( 1,782 ) $ ( 433 ) Net income (loss) per common share: Basic $ 0.00 $ 0.10 $ ( 0.08 ) $ ( 0.02 ) Diluted $ 0.00 $ 0.10 $ ( 0.08 ) $ ( 0.02 ) Weighted average shares of common stock outstanding: Basic 22,669,872 21,767,380 22,456,079 21,529,738 Diluted 23,147,119 21,985,175 22,456,079 21,529,738 The accompanying notes are an integral part of these condensed financial statements. 4 Table of Contents EVERSPIN TECHNOLOGIES, INC. Condensed Statements of Stockholders’ Equity (In thousands, except share and per share amounts) (Unaudited) Nine Months Ended September 30, 2025 Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2024 22,059,697 $ 2 $ 199,460 $ ( 136,869 ) $ 62,593 Exercise of stock options 10,620 — 29 — 29 Issuance of common stock under stock incentive plans 281,828 — — — — Stock-based compensation expense — — 1,577 — 1,577 Net loss — — — ( 1,166 ) ( 1,166 ) Balance at March 31, 2025 22,352,145 $ 2 $ 201,066 $ ( 138,035 ) $ 63,033 Exercise of stock options 12,733 — 39 — 39 Issuance of common stock under stock incentive plans 205,713 — 254 — 254 Stock-based compensation expense — — 1,419 — 1,419 Net loss — — — ( 670 ) ( 670 ) Balance at June 30, 2025 22,570,591 $ 2 $ 202,778 $ ( 138,705 ) $ 64,075 Exercise of stock options 59,470 — 285 — 285 Issuance of common stock under stock incentive plans 126,718 — — — — Stock-based compensation expense — — 1,407 — 1,407 Net income — — — 54 54 Balance at September 30, 2025 22,756,779 $ 2 $ 204,470 $ ( 138,651 ) $ 65,821 Nine Months Ended September 30, 2024 Common Stock Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance at December 31, 2023 21,080,472 $ 2 $ 191,569 $ ( 137,650 ) $ 53,921 Exercise of stock options 96,116 — 353 — 353 Issuance of common stock under stock incentive plans 229,923 — — — — Stock-based compensation expense — — 1,714 — 1,714 Net loss — — — ( 202 ) ( 202 ) Balance at March 31, 2024 21,406,511 $ 2 $ 193,636 $ ( 137,852 ) $ 55,786 Exercise of stock options 9,549 — 35 — 35 Issuance of common stock under stock incentive plans 240,623 — 241 — 241 Stock-based compensation expense — — 1,862 — 1,862 Net loss — — — ( 2,502 ) ( 2,502 ) Balance at June 30, 2024 21,656,683 $ 2 $ 195,774 $ ( 140,354 ) $ 55,422 Exercise of stock options 11,177 — 44 — 44 Issuance of common stock under stock incentive plans 165,181 — 5 — 5 Stock-based compensation expense — — 1,532 — 1,532 Net income — — — 2,271 2,271 Balance at September 30, 2024 21,833,041 $ 2 $ 197,355 $ ( 138,083 ) $ 59,274 The accompanying notes are an integral part of these condensed financial statements. 5 Table of Contents EVERSPIN TECHNOLOGIES, INC. Condensed Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities Net loss $ ( 1,782 ) $ ( 433 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 2,561 1,197 Gain on sale of property and equipment ( 25 ) — Stock-based compensation 4,403 5,108 Changes in operating assets and liabilities: Accounts receivable 3,034 147 Inventory ( 2,709 ) ( 50 ) Prepaid expenses and other current assets 398 ( 3,597 ) Other assets ( 17 ) ( 88 ) Accounts payable ( 590 ) 236 Accrued liabilities 532 ( 2,248 ) Deferred revenue 887 36 Contract obligations 489 2,953 Lease liabilities, net 44 5 Long-term income tax liability 111 — Net cash provided by operating activities 7,336 3,266 Cash flows from investing activities Purchases of property and equipment ( 3,239 ) ( 1,302 ) Purchases of intangible assets ( 1,494 ) — Net cash used in investing activities ( 4,733 ) ( 1,302 ) Cash flows from financing activities Payments on finance leases ( 50 ) — Proceeds from exercise of stock options and purchase of shares in employee stock purchase plan 607 678 Net cash provided by financing activities 557 678 Net increase in cash and cash equivalents 3,160 2,642 Cash and cash equivalents at beginning of period 42,097 36,946 Cash and cash equivalents at end of period $ 45,257 $ 39,588 Supplementary cash flow information: Cash paid for taxes $ 38 $ — Operating cash flows paid for operating leases $ 1,061 $ 1,049 Financing cash flows paid for finance leases $ 50 $ 47 Non-cash investing and financing activities: Right-of-use assets obtained in exchange for finance lease liabilities $ — $ 297 Purchases of property and equipment in accounts payable and accrued liabilities $ 302 $ 36 The accompanying notes are an integral part of these condensed financial statements. 6 Table of Contents EVERSPIN TECHNOLOGIES, INC. Notes to Unaudited Condensed Financial Statements 1. Organization and Nature of Business Everspin Technologies, Inc. (“we”, “our”, “us”, “Everspin Technologies”, “Everspin”, or the “Company”) was incorporated in Delaware on May 16, 2008. The Company’s magnetoresistive random-access memory (MRAM) solutions offer the persistence of non-volatile memory with the speed and endurance of random-access memory (RAM) and enable the protection of mission critical data particularly in the event of power interruption or failure. The Company’s MRAM solutions allow its customers in key markets, such as industrial, medical, automotive/transportation, aerospace and data center markets to design high performance, power efficient and reliable systems without the need for bulky batteries or capacitors. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) and applicable rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2024, has been derived from the audited financial statements at that date but does not include all of the information required by GAAP for complete financial statements. These unaudited interim condensed financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial information. The results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other interim period or for any other future year. The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC. Reclassifications Certain reclassifications of previously reported amounts have been made to conform to the current period presentation. Specifically, interest income was previously presented within other income, net for the three and nine months ended September 30, 2024 in the Quarterly Report on Form 10-Q filed with the SEC on November 5, 2024. Interest income is presented separately in the unaudited condensed statement of operations and comprehensive income (loss) within these financial statements. Use of Estimates The preparation of the condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, fair value of assets and liabilities, inventory net realizable value, deferred tax assets and related valuation allowances, and stock-based compensation. The Company believes its estimates and assumptions are reasonable; however, actual results may differ from the Company’s estimates. Segment Information The Company’s MRAM technology solutions are sold as products and services through MRAM-based products, licenses and royalties of MRAM and magnetic sensor technology and backend foundry and design services. The Company identifies and manages the business activities in one reportable segment. The Company’s Chief Executive Officer is the Chief Operating Decision Maker (CODM). The CODM utilizes the Company’s long-range plan, which includes product development roadmaps and long-range financial models, as a key input to resource allocation. The CODM makes decisions 7 Table of Contents on resource allocation, assesses performance of the business, and monitors budget versus actual results using net income. Significant segment expenses within net income are those separately presented on the Company’s statements of operations and comprehensive income (loss), which include cost of sales, research and development, general and administrative, and sales and marketing expenses. Cash and Cash Equivalents The Company considers all highly liquid, short-term investments with maturity dates of 90 days or less at the date of purchase to be cash equivalents. The Company’s cash equivalents consist solely of money market funds. Accounts Receivable, Net The Company establishes an allowance for product returns. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of products when evaluating the adequacy of sales returns. Returns are processed as credits on future purchases and, as a result, the allowance is recorded against the balance of trade accounts receivable. In addition, the Company, from time to time, may establish an allowance for estimated price adjustments related to its distributor agreements. The Company estimates credits to distributors based on the historical rate of credits provided to distributors relative to sales and evaluation of current market conditions. Accounts receivable, net consisted of the following (in thousands): September 30, 2025 December 31, 2024 Trade accounts receivable $ 9,016 $ 11,944 Unbilled accounts receivable 122 187 Allowance for product returns and price adjustments ( 450 ) ( 409 ) Accounts receivable, net $ 8,688 $ 11,722 Concentration of Credit Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents that are held by a financial institution in the United States and accounts receivable. Amounts on deposit with a financial institution may at times exceed federally insured limits. Significant customers are those which represent more than 10% of the Company’s total revenue or net accounts receivable balance at each respective balance sheet date. For the purposes of this disclosure, the Company defines “customer” as the entity that is purchasing the products or licenses directly from the Company, which includes the distributors of the Company’s products in addition to end customers that the Company sells to directly. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable, net are as follows: Revenue Accounts Receivable Three Months Ended September 30, Nine Months Ended September 30, September 30, 2025 December 31, 2024 Customers 2025 2024 2025 2024 Customer A * * 11 % * * * Customer B * 32 % * 27 % * 61 % Customer C 34 % * 22 % * 42 % * Customer D * 11 % * * * * _______________________________ * Less than 10% 8 Table of Contents Fair Value of Financial Instruments Fair value is defined as an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. The framework for measuring fair value provides a three-tier hierarchy prioritizing inputs to valuation techniques used in measuring fair value as follows: Level 1— Observable inputs such as quoted prices for identical assets or liabilities in active markets; Level 2— Inputs, other than quoted prices for identical assets or liabilities in active markets, which are observable either directly or indirectly; and Level 3— Unobservable inputs in which there is little or no market data requiring the reporting entity to develop its own assumptions. The carrying value of accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments. The Company’s financial instruments consist of Level 1 assets. Where quoted prices are available in an active market, securities are classified as Level 1. Level 1 assets consist of highly liquid money market funds that are included in cash equivalents. The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis (in thousands): December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 33,617 $ — $ — $ 33,617 Total assets measured at fair value $ 33,617 $ — $ — $ 33,617 Recently Adopted Accounting Pronouncements The Company adopted Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which improves income tax disclosure requirements, primarily through disaggregated information about effective income tax rate reconciliation and additional disclosures regarding income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-09 effective January 1, 2025, on a prospective basis. The adoption of ASU 2023-09 did not have a significant impact to the condensed financial statements. 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 the statement of operations, as well as disclosures about selling expenses. ASU 2024-03 is effective for the Company’s annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, on a prospective basis, with the option for retrospective application. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the impact that the standard will have on its condensed financial statements. In July 2025, the FASB issued ASU No. 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. ASU 2025-05 is effective for the Company’s annual reporting periods beginning after December 15, 2025, and interim reporting periods in those fiscal 9 Table of Contents years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company is currently evaluating the impact that the standard will have on its condensed financial statements. In September 2025, the FASB issued ASU No. 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Topic 350): Targeted Improvements to the Accounting for Internal-Use Software , which updates guidance for recognizing software development costs to better align the accounting with how software is developed. The update removes references to development stages, introduces a probable completion threshold, and incorporates website development costs into the internal-use software framework under ASC Topic 350. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those fiscal years, on a prospective basis, with the option for retrospective application. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the impact that the standard will have on its condensed financial statements. The Company reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact to the condensed financial statements. 3. Statements of Operations and Comprehensive Income (Loss) Components Revenue The Company sells products to its distributors, original design manufacturers (ODMs), and original equipment manufacturers (OEMs). The Company also recognizes revenue under licensing, patent, and royalty agreements with some customers. The following table presents the Company’s revenues disaggregated by sales channel (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Distributor $ 12,094 $ 10,152 $ 28,743 $ 29,666 Non-distributor 1,966 1,941 11,656 7,493 Total revenue $ 14,060 $ 12,093 $ 40,399 $ 37,159 The following table presents the Company’s revenues disaggregated by timing of recognition (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Point in time $ 12,833 $ 10,557 $ 35,407 $ 31,586 Over time 1,227 1,536 4,992 5,573 Total revenue $ 14,060 $ 12,093 $ 40,399 $ 37,159 The following table presents the Company’s revenues disaggregated by type (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Product sales $ 12,690 $ 10,443 $ 34,807 $ 31,190 Licensing 9 1,195 1,163 4,722 Royalties 143 114 600 396 Other revenue 1,218 341 3,829 851 Total revenue $ 14,060 $ 12,093 $ 40,399 $ 37,159 10 Table of Contents The Company recognizes revenue in three primary geographic regions: Asia-Pacific (APAC); North America; and Europe, Middle East and Africa (EMEA). The Company recognizes revenue by geography based on the region in which the Company’s products are sold, and not to where the end products in which they are assembled are shipped. The Company’s revenue by region for the periods indicated was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 APAC $ 8,571 $ 7,923 $ 24,412 $ 21,163 North America 2,497 1,874 7,906 7,857 EMEA 2,992 2,296 8,081 8,139 Total revenue $ 14,060 $ 12,093 $ 40,399 $ 37,159 Other Income, Net On August 14, 2024, the Company received a strategic award to develop a long-term plan to provide manufacturing services for aerospace and defense segments (the Award). Under the Award, the Company will provide a plan to mitigate risks to its MRAM manufacturing supply chain. Pursuant to the Award, the Company may receive cash payments upon the achievement of certain technical tasks and deliverables. The Award allows for milestones totaling up to approximately $ 14.6 million for the Company over a span of 2.5 years. The Award is not in the ordinary course of the Company’s business and hence not a contract with a customer. The Company has applied the revenue recognition principles under ASC 606 by analogy. During the three and nine months ended September 30, 2025, the Company billed $ 1.0 million and $ 3.0 million, respectively, relating to the Award and recorded $ 1.2 million and $ 2.5 million, respectively, of other income. The Company has recorded this other income using an input method based on costs incurred to date relative to the total expected costs of the Award over its term. The remaining $ 0.5 million of the billed amount for the Award is recorded as contract obligations liability on the condensed balance sheets. This amount represents the Company’s obligation to perform future services for which the Company has received or is entitled to receive payment but which are not yet fulfilled. 4. Balance Sheet Components Inventory Inventory consisted of the following (in thousands): September 30, 2025 December 31, 2024 Raw materials $ 220 $ 238 Work-in-process 9,989 7,510 Finished goods 1,610 1,362 Total inventory $ 11,819 $ 9,110 11 Table of Contents Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): September 30, 2025 December 31, 2024 Manufacturing equipment $ 15,147 $ 14,199 Computer and network equipment 741 602 Furniture and fixtures 113 113 Construction in Progress 739 — Leasehold improvements 1,476 1,476 Total property and equipment, gross 18,216 16,390 Less: accumulated depreciation ( 14,142 ) ( 13,170 ) Total property and equipment, net $ 4,074 $ 3,220 For the three months ended September 30, 2025 and 2024, the depreciation expense was $ 0.4 million and $ 0.4 million, respectively. For the nine months ended September 30, 2025 and 2024, depreciation expense was $ 1.1 million and $ 1.2 million, respectively. Intangible Assets, Net The gross carrying amounts and accumulated amortization of intangible assets are as follows at the dates indicated (in thousands): September 30, 2025 Weighted- Average Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Internal-use software 1.3 $ 4,446 $ ( 2,300 ) $ 2,146 Total intangible assets $ 4,446 $ ( 2,300 ) $ 2,146 December 31, 2024 Weighted- Average Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Internal-use software 2.0 $ 4,389 $ ( 973 ) $ 3,416 Total intangible assets $ 4,389 $ ( 973 ) $ 3,416 For the three months ended September 30, 2025 and 2024, the amortization expense for the intangible assets was $ 0.4 million and zero , respectively. For the nine months ended September 30, 2025 and 2024, the amortization expense for the intangible assets was $ 1.3 million and zero , respectively. 12 Table of Contents Accrued Liabilities Accrued liabilities consisted of the following (in thousands): September 30 2025 December 31 2024 Payroll-related expenses $ 1,969 $ 1,606 Inventory 395 157 Other 616 686 Total accrued liabilities $ 2,980 $ 2,449 Deferred Revenue In March 2025, the Company renewed a contractual arrangement with a customer for the development of a strategic radiation hardened (“RAD-Hard”) field programmable gate array product. The total consideration in the arrangement is $ 1.2 million. The Company is recognizing revenue related to the performance obligation over time using the input method based on costs incurred to date relative to the total expected costs of the contract and began recognizing revenue in the first quarter of 2025. As of September 30, 2025, the Company has billed $ 0.7 million for performance under the agreement. The Company has recognized an immaterial amount of revenue for the three months ended September 30, 2025, and $ 0.7 million for the nine months ended September 30, 2025, with an immaterial amount in contract assets on the condensed balance sheets. The Company concluded this contractual arrangement represents one arrangement and evaluated its promises to the customer and whether the performance obligations granted under the arrangement were distinct. The licenses provided to the customer are not transferable, are of limited value without the promised development services, and the customer cannot benefit from the license agreements without the specific obligated services in the development subcontract, as there is strong interdependency between the licenses and the development subcontract. Accordingly, the Company determined the licenses were not distinct within the context of the contract and combined the license with other performance obligations. In January 2025, the Company executed a contractual arrangement with a customer to provide engineering services supporting the customer’s development that uses capabilities of MRAM for in-memory computing. The total consideration in the arrangement is $ 4.1 million. The Company is recognizing revenue related to the performance obligation over time using the input method based on costs incurred to date relative to the total expected costs of the contract and began recognizing revenue in the first quarter of 2025. As of September 30, 2025, the Company has billed $ 4.1 million for the performance under the agreement and has recognized $ 0.9 million and $ 3.1 million in revenue for the three and nine months ended September 30, 2025, with $ 0.9 million in deferred revenue. The Company concluded that this contractual arrangement represents one arrangement and assessed the nature of the promises made to the customer to determine whether the performance obligations were distinct. The Company determined that the engineering services are not separately identifiable from the promised development services, as the engineering services are highly interrelated with, and dependent upon, the overall development services over the life of the contract. Accordingly, the Company concluded that the engineering services are not distinct within the context of the contract and, therefore, should be combined with the other promised services into a single performance obligation. 13 Table of Contents 5. Leases Operating leases consist primarily of office space and manufacturing facilities expiring at various dates through 2029. Finance leases relate to server leases expiring at various dates through 2029. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The undiscounted future non-cancellable lease payments under the Company’s operating and finance leases were as follows (in thousands): As of September 30, 2025 Amount Remainder of 2025 $ 370 2026 1,497 2027 1,380 2028 595 Thereafter 48 Total lease payments 3,890 Less: imputed interest ( 222 ) Total lease liabilities 3,668 Less: current portion of lease liabilities ( 1,361 ) Total lease liabilities, net of current portion $ 2,307 Other information related to the Company’s operating lease liabilities was as follows: September 30, 2025 December 31, 2024 Weighted-average remaining lease term (years) 2.68 3.39 Weighted-average discount rate 4.50 % 4.50 % Other information related to the Company’s finance lease liabilities was as follows: September 30, 2025 December 31, 2024 Weighted-average remaining lease term (years) 3.42 4.15 Weighted-average discount rate 3.90 % 3.90 % 14 Table of Contents 6. Stock-Based Compensation Share-Based Compensation Expense The following table presents the details of the Company’s share-based compensation expense (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 General and administrative $ 678 $ 632 $ 2,083 $ 2,592 Research and development 424 710 1,358 1,979 Sales and marketing 144 190 454 537 Cost of sales 161 — 508 — Total stock-based compensation $ 1,407 $ 1,532 $ 4,403 $ 5,108 Summary of Stock Option Activity The following table summarizes the stock option activity for the nine months ended September 30, 2025: Options Outstanding Number of Options Weighted- Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (years) Aggregate Intrinsic Value (In thousands) Balance—December 31, 2024 1,521,857 $ 6.04 5.9 $ 1,507 Options granted — Options exercised ( 82,823 ) $ 4.26 $ 194 Options cancelled/forfeited ( 14,144 ) $ 7.20 Balance—September 30, 2025 1,424,890 $ 6.13 5.2 $ 4,569 Options exercisable—September 30, 2025 1,383,891 $ 6.07 5.1 $ 4,518 The total grant date fair value of options vested was $ 0.2 million and $ 0.3 million during the three months ended September 30, 2025 and 2024, respectively, and $ 0.5 million and $ 0.9 million during the nine months ended September 30, 2025 and 2024, respectively. No options were granted in the three and nine months ended September 30, 2025 or 2024, respectively. As of September 30, 2025, there was $ 0.2 million of total unrecognized stock-based compensation expense related to unvested options which is expected to be recognized over a weighted-average period of 0.45 years. Stock-based compensation cost for options capitalized within inventory at September 30, 2025 and 2024 was not material. 2016 Employee Stock Purchase Plan In January 2025, there was an increase of 220,596 shares reserved for issuance under the Company’s Employee Stock Purchase Plan (ESPP) pursuant to the terms of th e ESPP. The Company had 1,191,215 shares available for future issuance under the ESPP as of September 30, 2025. Employees did not purchase any shares during the three months ended September 30, 2025 and 2024, respectively. Employees purchased 61,181 shares for $ 254,000 during the nine months ended September 30, 2025. Employees purchased 37,696 shares for $ 241,000 during the nine months ended September 30, 2024. 15 Table of Contents Restricted Stock Units The following table summarizes restricted stock units (RSUs) activity for the nine months ended September 30, 2025: RSUs Outstanding Number of Restricted Stock Units Weighted- Average Grant Date Fair Value Per Share Balance—December 31, 2024 987,965 $ 7.89 Granted 996,561 $ 5.80 Vested ( 553,328 ) $ 7.24 Cancelled/forfeited ( 23,674 ) $ 6.96 Balance—September 30, 2025 1,407,524 $ 6.68 The fair value of RSUs is determined on the date of grant based on the market price of the Company’s common stock on that date . As of September 30, 2025, there was $ 8.2 million of unrecognized stock-based compensation expense related to RSUs to be recognized over a weighted-average period of 2.7 years. Stock-based compensation cost related to RSUs capitalized within inventory at September 30, 2025 and 2024 was not material. 7. Significant Agreements GLOBALFOUNDRIES, Inc. Joint Development Agreement Since October 17, 2014, the Company has participated in a joint development agreement (JDA) with GLOBALFOUNDRIES Inc. (GLOBALFOUNDRIES), a semiconductor foundry, for the joint development of Spin-transfer Torque MRAM (STT-MRAM), technology to produce a family of discrete and embedded MRAM technologies. The term of the JDA is until the completion, termination, or expiration of the last statement of work entered into pursuant to the JDA. The JDA was extended on December 31, 2019, to include a new phase of support for 12nm MRAM development. Under the current JDA extension terms, each party licenses its relevant intellectual property to the other party. For certain jointly developed works, the parties have agreed to follow an invention allocation procedure to determine ownership. In addition, GLOBALFOUNDRIES possesses the exclusive right to manufacture the Company’s discrete and embedded STT-MRAM devices developed pursuant to the JDA until the earlier of three years after the qualification of the MRAM device for a particular technology node or four years after the completion of the relevant statement of work under which the device was developed. For the same exclusivity period associated with the relevant device, GLOBALFOUNDRIES agreed not to license intellectual property developed in connection with the JDA to named competitors of the Company. If GLOBALFOUNDRIES manufactures, sells, or transfers to customers wafers containing production quantified STT-MRAM devices that utilize certain design information, GLOBALFOUNDRIES will be required to pay the Company a royalty. 16 Table of Contents 8. Net Income (Loss) Per Common Share Basic net income (loss) per common share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding for the period less shares subject to repurchase, without consideration of potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method by dividing net income (loss) by the total weighted average shares of common stock outstanding in addition to the potential impact of dilutive securities including restricted stock units, warrants, and options. In periods with a net loss, potentially dilutive securities are excluded from the Company’s calculation of earnings per share as their inclusion would have an antidilutive effect. The following tables set forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts): Basic and diluted EPS Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Numerator: Net income (loss) $ 54 $ 2,271 $ ( 1,782 ) $ ( 433 ) Net income (loss) attributable to common stockholders, diluted $ 54 $ 2,271 $ ( 1,782 ) $ ( 433 ) Denominator: Weighted-average shares of common stock outstanding, basic 22,669,872 21,767,380 22,456,079 21,529,738 Weighted-average shares of common stock outstanding, diluted 23,147,119 21,985,175 22,456,079 21,529,738 Net income (loss) per common share, basic $ 0.00 $ 0.10 $ ( 0.08 ) $ ( 0.02 ) Net income (loss) per common share, diluted $ 0.00 $ 0.10 $ ( 0.08 ) $ ( 0.02 ) Potentially dilutive securities representing 0.9 million and 2.2 million stock options and RSUs that were outstanding during the three months ended September 30, 2025, and 2024, respectively, and 1.5 million and 1.9 million stock options and RSUs outstanding during the nine months ended September 30, 2025 and 2024, respectively, were excluded from the computation of diluted earnings per common share during these periods as their inclusion would have an antidilutive effect. 17 Table of Contents