What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-12 compared with 2025-08-12 · 91 added, 57 removed, 114 unchanged (56% of the section changed)

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With a rich portfolio of patented technologies, we have consistently driven innovation in the field of cutting-edge enterprise memory and storage, advancing artificial intelligence (“AI”) and empowering businesses and industries to thrive in the digital age.

During the second quarter of 2025, we recorded net sales of $41.7 million, gross profit of $1.4 million and net loss of $6.1 million.

During the third quarter of 2025, we recorded net sales of $42.2 million, gross profit of $1.8 million and net loss of $7.0 million.

We have historically financed our operations primarily with proceeds from issuances of equity and debt securities and cash receipts from revenues.

We have also funded our operations with a revolving line of credit under a bank credit facility with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (“SVB”), funds raised through our equity line arrangement under the March 2025 Purchase Agreement (as defined below), and proceeds raised from the June 2025 Offering (as defined below).

See “Liquidity and Capital Resources” and “Recent Developments” below for more information.

Recent Developments

June 2025 Offering

On June 24, 2025, we entered into a Securities Purchase Agreement (the “June 2025 Purchase Agreement”) with certain investors, including Chun K.

Hong, Chairperson of our board of directors, President and Chief Executive Officer (collectively, the “Purchasers”), pursuant to which we issued and sold to the Purchasers in a registered offering (the “June 2025 Offering”) (i) 17,142,860 shares of our common stock, and (ii) 34,285,720 Common Stock Purchase Warrants (the “June 2025 Warrants”) to purchase up to an aggregate of 34,285,720 shares (the “June 2025 Warrant Shares”) of our common stock at a combined purchase price of $0.70 per share and accompanying June 2025 Warrant.

Hong purchased $3.0 million of shares and accompanying June 2025 Warrants in the June 2025 Offering.

The June 2025 Offering closed on June 25, 2025.

The net proceeds to us from the June 2025 Offering were approximately $11.3 million, after deducting placement agent fees and offering costs paid by us.

The June 2025 Warrants are exercisable at any time on or after the issuance date, have a term of five years from the issuance date, have an exercise price of $0.70 per share, contain customary 4.99%/9.99% blocker provisions and provide for the cash payment of the Black-Scholes value of the June 2025 Warrants upon the occurrence of certain fundamental transactions.

The exercise price and the number of June 2025 Warrant Shares issuable upon exercise of the June 2025 Warrants are subject to adjustment in the event of, among other things, certain transactions affecting our common stock (including without limitation stock splits and stock dividends).

In addition, the exercise price of the June 2025 Warrants is subject to reduction in the event of certain common stock and common stock equivalent issuances, other than certain agreed exempt issuances, at a price lower than the exercise price of the June 2025 Warrants then in effect.

Furthermore, if at any time on or after the date of issuance there occurs any share split, share dividend, share combination recapitalization or other similar transaction involving our common stock (each, a “Share Combination Event”) and the lowest daily volume weighted average price of the common stock during the period commencing on the trading day immediately following the applicable Share Combination Event and ending on the fifth trading day immediately following the applicable Share Combination Event is less than the exercise price of the June 2025 Warrants then in effect, then the exercise price of the June 2025 Warrants will be reduced to the lowest daily volume weighted average price of the common stock during such period.

On June 24, 2025, we entered into the Placement Agreement with Roth Capital Partners, LLC (“Roth”), pursuant to which Roth agreed to act our placement agent in connection with the June 2025 Offering.

Pursuant to the terms of the Placement Agreement, in consideration for its placement agent services, we paid Roth a cash fee in an amount equal to 4.0% of the aggregate gross proceeds received by us in connection with the closing of the June 2025 Offering, excluding the gross proceeds received by us from the sale of securities to Mr.

In addition, pursuant to the June 2025 Purchase Agreement, our director and executive officers entered into lock-up agreements with us , pursuant to which they agreed not to offer for sale, contract to sell, or sell any shares of our common stock or any securities convertible into, or exercisable or exchangeable for, shares of our common stock , for a period of 90 days from the closing of the June 2025 Offering, subject to certain customary exceptions.

Further, pursuant to the terms of the June 2025 Purchase Agreement, we have agreed for a period of 90 days from the closing of the June 2025 Offering not to (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or Common Stock Equivalents (as defined in the June 2025 Purchase Agreement) or (ii) file any registration statement or amendment or supplement to any registration statement.

The June 2025 Purchase Agreement also provides that we may not, subject to the exceptions described in the June 2025 Purchase Agreement (including an exception permitting us to utilize the March 2025 Purchase Agreement following the expiration of the 90-day period following the closing of the June 2025 Offering), effect or enter into any Variable Rate Transactions (as defined in the June 2025 Purchase Agreement) until the six-month anniversary of the closing date of the June 2025 Offering.

Netlist, Inc.

2025 Equity Incentive Plan

On September 9, 2025, our stockholders approved the Netlist, Inc.

2025 Equity Incentive Plan at our 2025 Annual Meeting of Stockholders.

Amendment to Restated Certificate of Incorporation

On September 24, 2025, our stockholders approved the Certificate of Amendment to the Restated Certificate of Incorporation to increase the number of authorized shares of our common stock from 450,000,000 to 675,000,000.

October 2025 Offering

On October 6, 2025, we entered into a Securities Purchase Agreement (the “October 2025 Purchase Agreement”) with certain investors (collectively, the “October 2025 Purchasers”), pursuant to which we issued and sold to the October 2025 Purchasers in a registered offering (the “October 2025 Offering”) an aggregate of (i) 14,285,716 shares of our common stock and (ii) Common Stock Purchase Warrants (the “October 2025 Warrants”) to purchase up to an aggregate of 28,571,432 shares (the “October 2025 Warrant Shares”) of our common stock at a combined purchase price of $0.70 per share and accompanying October 2025 Warrant.

The October 2025 Offering closed on October 7, 2025.

The net proceeds to us from the October 2025 Offering were approximately $9.1 million, after deducting placement agent fees and offering costs paid by us.

The October 2025 Warrants are exercisable at any time on or after the issuance date, have a term of five years from the issuance date, have an exercise price of $0.70 per share, contain customary 4.99%/9.99% blocker provisions and provide for the cash payment of the Black-Scholes value of the October 2025 Warrants upon the occurrence of certain fundamental transactions.

The exercise price and the number of October 2025 Warrant Shares issuable upon exercise of the October 2025 Warrants are subject to adjustment in the event of, among other things, certain transactions affecting our common stock (including without limitation stock splits and stock dividends).

In addition, the exercise price of the October 2025 Warrants is subject to reduction in the event of certain common stock and common stock equivalent issuances, other than certain agreed exempt issuances, at a price lower than the exercise price of the October 2025 Warrants then in effect.

On October 6, 2025, we entered into a Placement Agency Agreement (the “October 2025 Placement Agreement”) with Roth Capital Partners, LLC (“Roth”), pursuant to which Roth agreed to act as our placement agent in connection with the October 2025 Offering.

Pursuant to the terms of the October 2025 Placement Agreement, in consideration for its placement agent services, we paid Roth a cash fee in an amount equal to 4.0% of the aggregate gross proceeds received by us in connection with the closing of the October 2025 Offering.

In addition, pursuant to the October 2025 Purchase Agreement, o ur directors and executive officers entered into lock-up agreements with us , pursuant to which they agreed not to offer for sale, contract to sell, or sell any shares of our common stock or any securities convertible into, or exercisable or exchangeable for, shares of our common stock , for a period of 90 days from the closing of the October 2025 Offering, subject to certain customary exceptions.

Further, pursuant to the terms of the October 2025 Purchase Agreement and subject to certain limited exceptions, we have agreed for a period of 90 days from the closing of the October 2025 Offering not to (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or Common Stock Equivalents (as defined in the October 2025 Purchase Agreement) or (ii) file any registration statement or amendment or supplement to any registration statement.

The October 2025 Purchase Agreement also provides that we may not, subject to the exceptions described in the October 2025

Purchase Agreement (including an exception permitting us to utilize the March 2025 Purchase Agreement following the expiration of the 90-day period following the closing of the October 2025 Offering), effect or enter into any Variable Rate Transactions (as defined in the October 2025 Purchase Agreement) until the six-month anniversary of the closing date of the October 2025 Offering.

Economic Conditions, Challenges and Risks

government has recently implemented significant tariff increases on imports from the People’s Republic of China (“PRC”) and the PRC has retaliated with its own tariffs.

While we do not believe we have been materially affected by the recent tariffs or changes in trade policy, tariffs, quotas, trade agreements or other trade restrictions could affect our supply and manufacturing capabilities in the PRC, increase our operating expenses and reduce gross margins and could reduce our sales to customers located in the PRC, which, as of the quarter ended June 28, 2025, accounted for a majority of our net sales.

These net sales were significantly concentrated between three large customers.

These tariffs are the subject of ongoing discussions and agreements between the United States and the PRC.

While we do not believe we have been materially affected by the recent tariffs or changes in trade policy, tariffs, quotas, trade agreements or other trade restrictions could affect our supply and manufacturing capabilities in the PRC, increase our operating expenses and reduce gross margins and could reduce our sales to customers located in the PRC, which, as of the quarter ended September 27, 2025, accounted for a majority of our net sales.

The scope, duration, and broader economic impact of such measures remain uncertain and will depend on several factors, including ongoing negotiations between the U.S.

and the PRC and/or other countries, their respective responses, and any possible exemptions or exclusions that may be granted or other countries targeted with tariffs.

In addition, the vast majority of our net product sales in recent periods have been generated from resales of products sourced from SK hynix pursuant to the Strategic Agreement.

The term of the supply provisions of this Strategic Agreement expire in April 2026.

We may be unable to renew our supply agreements with SK hynix.

We can provide no assurance that SK hynix will continue to supply us with products for resale on similar terms to our existing arrangements or at all.

As a result, our revenue in future periods will be adversely affected if SK hynix does not continue to supply us with products for resale.

Our performance, financial condition and prospects are also affected by a number of factors and are exposed to a number of other risks and uncertainties.

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Net Sales and Gross Profit

Net sales and gross profit for the three and six months ended June 28, 2025 and June 29, 2024 were as follows (dollars in thousands):

Net sales and gross profit for the three and nine months ended September 27, 2025 and September 28, 2024 were as follows (dollars in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

Cost of sales

Gross margin percentage

Net sales increased by approximately $4.9 million during the second quarter of 2025 compared to the same period of 2024, primarily as a result of a $8.5 million increase in the sale of registered DIMM (“RDIMM”) and discrete memory component products, partially offset by a $2.6 million decrease in sales of our flash and solid-state drives (“SSD”) products, and a $1.0 million decrease in sales of low-profile memory subsystem products.

Net sales decreased by approximately $2.0 million during the first six months of 2025 compared to the same period of 2024, primarily as a result of a $5.1 million decrease in sales of our flash and SSD products, and a $2.5 million decrease in sales of low-profile memory subsystem products, partially offset by a $5.6 million increase in the sale of RDIMM and discrete memory component products

Net sales increased by approximately $2.0 million during the third quarter of 2025 compared to the same period of 2024, primarily as a result of a $2.3 million increase in sales of low-profile memory subsystem products and a $0.4 million increase in the sale of registered DIMM (“RDIMM”) and discrete memory component products, partially offset by a $0.6 million decrease in sales of our flash and solid-state drives (“SSD”) products.

Net sales were consistent during the first nine months of 2025 compared to the same period of 2024.

As of September 27, 2025, we had deferred revenue of $27.0 million.

The deferred revenue relates to advance payments received during the quarter on orders shipped subsequent to the end of the quarter.

Gross Profit and Gross Margin

Gross profit and gross margin percentage increased during the second quarter and first six months of 2025 compared to the same periods of 2024, primarily as a result of product sales mix.

Gross profit and gross margin percentage increased during the third quarter and first nine months of 2025 compared to the same periods of 2024, primarily as a result of product sales mix.

Operating Expenses

Operating expenses for the three and six months ended June 28, 2025 and June 29, 2024, were as follows (dollars in thousands):

Operating expenses for the three and nine months ended September 27, 2025 and September 28, 2024, were as follows (dollars in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

Research and development

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Research and Development

Research and development expenses decreased during the second quarter and first six months of 2025 compared to the same periods of 2024, primarily due to a reduction in employee headcount and the associated decrease in overhead costs.

Research and development expenses decreased during the third quarter and first nine months of 2025 compared to the same periods of 2024, primarily due to a reduction in employee headcount that occurred in October 2024 and the associated decrease in overhead costs.

Intellectual Property Legal Fees

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See Note 5 to the condensed consolidated financial statements included in Part I, Item 1 of this report for further discussion.

Intellectual property legal fees decreased during the second quarter and first six months of 2025 compared to the same periods of 2024 due primarily to lower legal expenses incurred to protect and enforce our patent portfolio.

Intellectual property legal fees decreased during the third quarter and first nine months of 2025 compared to the same periods of 2024 due primarily to lower legal expenses incurred to protect and enforce our patent portfolio.

Selling, General and Administrative

Selling, general and administrative expenses increased during the second quarter and first six months of 2025 compared to the same periods of 2024, due primarily to an increase in employee headcount and the related overhead and outside services.

Selling, general and administrative expenses slightly decreased during the third quarter compared to the same period of 2024 due primarily to lower audit and public company related fees.

Selling, general and administrative expenses slightly increased during the first nine months of 2025 compared to the same period of 2024 due primarily to an increase in employee headcount and the related overhead and outside services.

Other Income, Net

Other income, net for the three months and six ended June 28, 2025 and June 29, 2024 was as follows (dollars in thousands):

Other income, net for the three months and nine ended September 27, 2025 and September 28, 2024 was as follows (dollars in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 27,

September 28,

September 27,

September 28,

Interest income, net

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Total other income, net

Interest income, net decreased during the second quarter and first six months of 2025 compared to the same periods of 2024, primarily as a result of interest earned on lower cash balances.

Other income, net was consistent during the second quarter and first six months of 2025 compared to the same periods of 2024.

Interest income, net decreased during the third quarter and first nine months of 2025 compared to the same periods of 2024, primarily as a result of interest earned on lower cash balances.

Other income, net included a reversal of the reserve to cover flood damage in our former manufacturing facility located in the PRC during the third quarter and first nine months of 2024.

Liquidity and Capital Resources

Our primary sources of cash are historically proceeds from issuances of equity and receipts from revenues.

In addition, we have received proceeds from our entry into a Strategic Product Supply and License Agreement with SK hynix, Inc., a South Korean memory semiconductor supplier (“SK hynix”), on April 5, 2021 (the “Strategic Agreement”), which we used to support our operations.

We have also funded our operations with a revolving line of credit under a bank credit facility with SVB, funds raised through the March 2025 Purchase Agreement, and proceeds raised from the June 2025 Offering.

The following tables present selected financial information as of June 28, 2025 and December 28, 2024 and for the first six months of 2025 and 2024 (in thousands):

In addition, we have received proceeds from our entry into the Strategic Agreement with SK hynix, which we used to support our operations.

We have also funded our operations with our revolving line of credit under a bank credit facility with SVB, funds raised through the March 2025 Purchase Agreement, and proceeds raised from the June 2025 Offering and October 2025 Offering.

The following tables present selected financial information as of September 27, 2025 and December 28, 2024 and for the first nine months of 2025 and 2024 (in thousands):

September 27,

Cash, cash equivalents and restricted cash

Working capital

Six Months Ended

Nine Months Ended

September 27,

September 28,

Net cash used in operating activities

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Net cash provided by financing activities

During the six months ended June 28, 2025, net cash used in operating activities was primarily a result of net loss of $15.6 million, non-cash adjustments to net loss of $2.1 million, and net cash outflows from changes in operating assets and liabilities of $4.2 million driven predominantly by a decrease in accounts payable, an increase in inventories due to orders not shipped in June 2025, partially offset by an increase in deferred revenue related to advance payments received on orders shipped in July 2025.

Net cash provided by financing activities during the six months ended June 28, 2025 primarily consisted of $1.1 million in net proceeds from the issuance of common stock under the March 2025 Purchase Agreement and $11.6 million in net proceeds from issuance of common stock under the June 2025 Purchase Agreement, partially offset by $0.1 million in net repayments under the 2023 SVB Credit Agreement (as defined below), and $0.4 million in payments of notes payable to finance insurance policies.

During the six months ended June 29, 2024, net cash used in operating activities was primarily a result of net loss of $ 31.7 million, non-cash adjustments to net loss of $ 3.0 million, and net cash inflows from changes in operating assets and liabilities of $ 6.7 million driven predominantly by an increase in deferred revenue related to an advance payment received on an order shipped in July 2024 and decrease in inventories due to higher

turnovers, partially offset by the decrease in accounts payable due to the payments made for the legal fees incurred to defend our patent portfolio.

Net cash provided by financing activities during the six months ended June 29, 2024 primarily consisted of $5.2 million in net proceeds from issuance of common stock under our purchase agreement with Lincoln Park dated September 28, 2021, $0.7 million in net borrowings under the 2023 SVB Credit Agreement, offset by $0.3 million in payments of notes payable to finance insurance policies.

During the nine months ended September 27, 2025, net cash used in operating activities was primarily a result of net loss of $22.6 million, non-cash adjustments to net loss of $2.7 million, and net cash outflows from changes in operating assets and liabilities of $8.2 million driven predominantly by a decrease in accounts payable, an increase in inventories due to orders not shipped in September 2025, an increase in prepaid expenses and other assets, partially offset by an increase in deferred revenue related to advance payments received on orders shipped in October 2025.

Net cash provided by financing activities during the nine months ended September 27, 2025 primarily consisted of $1.1 million in net proceeds from the issuance of common stock under the March 2025 Purchase Agreement and $11.6 million in net proceeds from issuance of common stock under the June 2025 Purchase Agreement, $2.2 million in net borrowings under the 2023 SVB Credit Agreement (as defined below), partially offset by $0.5 million in payments of notes payable to finance insurance policies.

During the nine months ended September 28, 2024, net cash used in operating activities was primarily a result of net loss of $41.2 million, non-cash adjustments to net loss of $4.3 million, and net cash inflows from changes in operating assets and liabilities of $11.4 million driven predominantly by a decrease in inventories

due to higher turnovers, increase in deferred revenue related to an advance payment received on an order shipped in October 2024 and decrease in accounts receivable due to faster cash collections, partially offset by the decrease in accounts payable due to the payments made for the legal fees incurred to defend our patent portfolio.

Net cash provided by financing activities during the nine months ended September 28, 2024 primarily consisted of $5.2 million in net proceeds from issuance of common stock under our purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) dated September 28, 2021 , partially offset by $2.3 million in net repayments under the 2023 SVB Credit Agreement and by $0.5 million in payments of notes payable to finance insurance policies.

Capital Resources

October 2025 Offering

On October 6, 2025, we entered into the October 2025 Purchase Agreement with the October 2025 Purchasers, pursuant to which we issued and sold to the October 2025 Purchasers in the October 2025 Offering an aggregate of (i) 14,285,716 shares of our common stock and (ii) 28,571,432 October 2025 Warrants to purchase the October 2025 Warrant Shares at a combined purchase price of $0.70 per share and accompanying October 2025 Warrant.

The October 2025 Offering closed on October 7, 2025.

The net proceeds to us from the October 2025 Offering were approximately $9.1 million, after deducting placement agent fees and offering costs paid by us.

Further, pursuant to the terms of the October 2025 Purchase Agreement and subject to certain exceptions, we have agreed for a period of 90 days from the closing of the October 2025 Offering not to (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or Common Stock Equivalents (as defined in the October 2025 Purchase Agreement) or (ii) file any registration statement or amendment or supplement to any registration statement.

The October 2025 Purchase Agreement also provides that we may not, subject to the exceptions described in the October 2025 Purchase Agreement (including an exception permitting us to utilize the March 2025 Purchase Agreement following the expiration of the 90-day period following the closing of the October 2025 Offering), effect or enter into any Variable Rate Transactions (as defined in the October 2025 Purchase Agreement) until the six-month anniversary of the closing date of the October 2025 Offering.

June 2025 Offering

On June 24, 2025, we entered into the June 2025 Purchase Agreement pursuant to which the we issued and sold to the Purchasers in the June 2025 Offering an aggregate of (i) 17,142,860 shares of our common stock, and (ii) 34,285,720 June 2025 Warrants to purchase the June 2025 Warrant Shares at a combined purchase price of $0.70 per share and accompanying 2025 Warrant.

On June 24, 2025, we entered into a Securities Purchase Agreement (the “June 2025 Purchase Agreement”) with certain investors, including Chun K.

Hong, Chairperson of our board of directors, President and Chief Executive Officer (collectively, the “June 2025 Purchasers”), pursuant to which we issued and sold to the June 2025 Purchasers in a registered offering (the “June 2025 Offering”) an aggregate of (i) 17,142,860 shares of our common stock and (ii) 34,285,720 Common Stock Purchase Warrants (the “June 2025 Warrants”) to purchase up to an aggregate of 34,285,720 shares of our common stock at a combined purchase price of $0.70 per share and accompanying June 2025 Warrant.

Hong purchased $3.0 million of shares and accompanying June 2025 Warrants in the June 2025 Offering.

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The net proceeds to us from the June 2025 Offering were approximately $11.3 million, after deducting placement agent fees and offering costs paid by us.

effect or enter into any Variable Rate Transactions (as defined in the June 2025 Purchase Agreement) until the six-month anniversary of the closing date of the June 2025 Offering.

March 2025 Lincoln Park Purchase Agreement

On March 13, 2025, we entered into a purchase agreement (the “March 2025 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) , pursuant to which we have the right to sell to Lincoln Park up to an aggregate of $75 million in shares of our common stock over the 36-month term of the March 2025 Purchase Agreement subject to the conditions and limitations set forth in the March 2025 Purchase Agreement.

As of June 28, 2025, $ 73.9 million remains available under the March 2025 Purchase Agreement with Lincoln Park.

Pursuant to the June 2025 Purchase Agreement, we may not effect any sale under the March 2025 Purchase Agreement for a period of 90 days from the closing of the June 2025 Offering.

On March 13, 2025, we entered into a purchase agreement (the “March 2025 Purchase Agreement”) with Lincoln Park , pursuant to which we have the right to sell to Lincoln Park up to an aggregate of $75 million in shares of our common stock over the 36-month term of the March 2025 Purchase Agreement subject to the conditions and limitations set forth in the March 2025 Purchase Agreement.

As of September 27, 2025, $ 73.9 million remains available under the March 2025 Purchase Agreement with Lincoln Park.

Pursuant to the October 2025 Purchase Agreement, we may not effect any sale under the March 2025 Purchase Agreement for a period of 90 days from the closing of the October 2025 Offering.

2023 SVB Credit Agreement

On November 7, 2023, we entered into a loan and security agreement (the “2023 SVB Credit Agreement”) with SVB, which provides for a revolving line of credit up to $10.0 million.

On November 7, 2023, we entered into a loan and security agreement (as amended to date, the “2023 SVB Credit Agreement”) with SVB, which provides for a revolving line of credit up to $10.0 million.

The borrowing base is limited to 85% of eligible accounts receivable, subject to certain adjustments.

Borrowings accrue interest on advance at a per annum rate equal to the greater of 8.50% and the Wall Street Journal prime rate.

The maturity date is November 7, 2025.

As of June 28, 2025, the outstanding borrowings under the 2023 SVB Credit Agreement were $1.1 million with no availability under the revolving line of credit.

During the six months ended June 28, 2025, we made net repayments of $0.1 million under the 2023 SVB Credit Agreement.

The maturity date was originally November 7, 2025.

On November 7, 2025, we entered into a first amendment to the loan and security agreement (the “2023 SVB Credit Agreement Amendment”) to, among other things, extend the maturity date from November 7, 2025 to November 7, 2027.

As of September 27, 2025, the outstanding borrowings under the 2023 SVB Credit Agreement were $1.1 million with no availability under the revolving line of credit.

During the nine months ended September 27, 2025, we had net borrowings of $2.2 million under the 2023 SVB Credit Agreement.

Sufficiency of Cash Balances and Potential Sources of Additional Capital

We believe our existing balance of cash and cash equivalents together with the cash received under the Strategic Agreement with SK hynix, proceeds from issuances of debt and equity securities, including our equity line with Lincoln Park, cash receipts from net sales, borrowing availability under the 2023 SVB Credit Agreement, funds raised through future equity offerings and taking into account cash expected to be used in our operations, will be sufficient to meet our anticipated cash needs for at least the next 12 months.

We believe our existing balance of cash and cash equivalents together with the cash received under the Strategic Agreement with SK hynix, proceeds from issuances of debt and equity securities, including our equity line with Lincoln Park, cash receipts from net sales, funds raised through future equity offerings and taking into account cash expected to be used in our operations, will be sufficient to meet our anticipated cash needs for at least the next 12 months.

However, this estimate may ultimately be incorrect and we may use our cash resources faster than we expect as a result of many factors, including costs to defend our intellectual property portfolio, the results of ongoing litigation and legal proceedings, demand and acceptance of our products, whether our current customers continue purchasing our products, costs of developing and improving our products, our results of operations, including our level of net product sales that we receive which can vary based on a number of factors, including the amount and timing of vendor payments, the timing of customer orders, the effects of changes in international trade policy, non-reoccurring items and changing projected inventory needs and estimates.

Pursuant to a Definitive Proxy Statement on Schedule 14A, filed with the SEC on July 24, 2025, an annual meeting of the stockholders will be held to address certain proposals, including a proposal to increase the authorized number of shares of our common stock from 450,000,000 to 675,000,000.

If we are unsuccessful in securing stockholder approval to increase the authorized shares of our common stock, this could impede our ability to issue shares of our common stock for corporate purposes, including any equity-based financing to support the execution of our business strategy.

Off-Balance Sheet Arrangements

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Improvements to Reportable Segment Disclosure, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This ASU is effective for the annual periods beginning January 1, 2024, and becomes effective for interim periods within fiscal years beginning January 1, 2025.

This ASU is effective for the annual periods beginning January 1, 2024, and

becomes effective for interim periods within fiscal years beginning January 1, 2025.

We adopted this guidance on December 28, 2024.

The adoption only impacted our disclosure and has no material impact on the Company’s condensed consolidated financial statements as of and for the quarter ended June 28, 2025.

The adoption only impacted our disclosure and has no material impact on the Company’s condensed consolidated financial statements as of and for the quarter ended September 27, 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis