NETLIST INC 10-K

Item 8. Financial Statements and Supplementary Dat a ​ ​ ​ ​ ​ Index to Consolidated Financial Statements ​ ​ ​ Page Consolidated Balance Sheets ​ 53 Consolidated Statements of Operations ​ 54 Consolidated Statements of Stockholders’ Equity (Deficit) ​ 55 Consolidated Statements of Cash Flows ​ 56 Notes to Consolidated Financial Statements ​ 57 Report of Independent Registered Public Accounting Firm (PCAOB ID No. 324 ) ​ 87 Schedule II – Valuation and Qualifying Accounts ​ 103 ​ ​ ​ ​ ​ ​ ​ ​ ​ 52 Table of Contents Netlist, Inc. and Subsidiaries ​ CONSOLIDATED BALANCE SHEETS (in thousands, except par value amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 27, ​ December 28, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ASSETS Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 31,782 ​ $ 22,507 Restricted cash ​ ​ 10,300 ​ ​ 12,100 Accounts receivable, net of allowances of $ 33 (2025) and $ 41 (2024) ​ ​ 2,411 ​ ​ 1,671 Inventories ​ ​ 3,383 ​ ​ 2,744 Prepaid expenses and other current assets ​ ​ 332 ​ ​ 733 Total current assets ​ ​ 48,208 ​ ​ 39,755 Property and equipment, net ​ ​ 300 ​ ​ 517 Operating lease right-of-use assets ​ ​ 541 ​ ​ 1,101 Other assets ​ ​ 428 ​ ​ 466 Total assets ​ $ 49,477 ​ $ 41,839 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 20,612 ​ $ 42,307 Revolving line of credit ​ ​ 1,788 ​ ​ 1,230 Accrued payroll and related liabilities ​ ​ 852 ​ ​ 808 Deferred revenue ​ ​ 30,570 ​ ​ 40 Other current liabilities ​ ​ 818 ​ ​ 2,675 Total current liabilities ​ ​ 54,640 ​ ​ 47,060 Operating lease liabilities ​ ​ 23 ​ ​ 641 Other liabilities ​ ​ 17 ​ ​ 186 Total liabilities ​ ​ 54,680 ​ ​ 47,887 Commitments and contingencies ​ ​ ​ ​ ​ ​ Stockholders' deficit: ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.001 par value— 10,000 shares authorized: Series A preferred stock, $ 0.001 par value; 1,000 shares authorized; none issued and outstanding ​ ​ — ​ ​ — Common stock, $ 0.001 par value— 675,000 (2025) and 450,000 (2024) shares authorized; 307,337 (2025) and 271,986 (2024) shares issued and outstanding ​ ​ 308 ​ ​ 273 Additional paid-in capital ​ ​ 357,001 ​ ​ 331,367 Accumulated deficit ​ ​ ( 362,512 ) ​ ​ ( 337,688 ) Total stockholders' deficit ​ ​ ( 5,203 ) ​ ​ ( 6,048 ) Total liabilities and stockholders' deficit ​ $ 49,477 ​ $ 41,839 ​ See accompanying Notes to Consolidated Financial Statements. ​ ​ ​ 53 Table of Contents Netlist, Inc. and Subsidiaries ​ CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ December 27, ​ December 28, ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ Net sales ​ $ 188,630 ​ $ 147,103 ​ Cost of sales ​ ​ 177,190 ​ ​ 144,219 ​ Gross profit ​ ​ 11,440 ​ ​ 2,884 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ Research and development ​ ​ 3,496 ​ ​ 8,064 ​ Intellectual property legal fees ​ ​ 20,231 ​ ​ 37,958 ​ Selling, general and administrative ​ ​ 13,223 ​ ​ 12,090 ​ Total operating expenses ​ ​ 36,950 ​ ​ 58,112 ​ Operating loss ​ ​ ( 25,510 ) ​ ​ ( 55,228 ) ​ Other income, net: ​ ​ ​ ​ ​ ​ ​ Interest income, net ​ ​ 522 ​ ​ 1,048 ​ Other income, net ​ ​ 164 ​ ​ 316 ​ Total other income, net ​ ​ 686 ​ ​ 1,364 ​ Loss before provision for income taxes ​ ​ ( 24,824 ) ​ ​ ( 53,864 ) ​ Provision for income taxes ​ ​ — ​ ​ 1 ​ Net loss ​ $ ( 24,824 ) ​ $ ( 53,865 ) ​ Deemed dividend on warrant modification ​ ​ ( 590 ) ​ ​ — ​ Net loss attributable to common stock ​ $ ( 25,414 ) ​ $ ( 53,865 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share: ​ ​ ​ ​ ​ ​ ​ Basic and diluted ​ $ ( 0.09 ) ​ $ ( 0.21 ) ​ Weighted-average common shares outstanding: ​ ​ ​ ​ ​ ​ ​ Basic and diluted ​ ​ 286,638 ​ ​ 259,904 ​ ​ ​ See accompanying Notes to Consolidated Financial Statements. 54 Table of Contents ​ Netlist, Inc. and Subsidiaries ​ CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Stockholders' ​ ​ ​ ​ Shares ​ ​ ​ Amount ​ ​ ​ Capital ​ ​ ​ Deficit ​ ​ ​ Equity (Deficit) Balance, December 30, 2023 ​ 253,593 ​ $ 254 ​ $ 307,328 ​ $ ( 283,823 ) ​ $ 23,759 Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 53,865 ) ​ ​ ( 53,865 ) Issuance of common stock, net ​ 16,842 ​ ​ 17 ​ ​ 19,439 ​ ​ — ​ ​ 19,456 Exercise of stock options ​ 276 ​ ​ 1 ​ ​ 184 ​ ​ — ​ ​ 185 Stock-based compensation ​ — ​ ​ — ​ ​ 4,436 ​ ​ — ​ ​ 4,436 Restricted stock units vested and distributed ​ 1,289 ​ ​ 1 ​ ​ ( 1 ) ​ ​ — ​ ​ — Tax withholdings related to net share settlements of equity awards ​ ( 14 ) ​ ​ — ​ ​ ( 19 ) ​ ​ — ​ ​ ( 19 ) Balance, December 28, 2024 ​ 271,986 ​ ​ 273 ​ ​ 331,367 ​ ​ ( 337,688 ) ​ ​ ( 6,048 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 24,824 ) ​ ​ ( 24,824 ) Issuance of common stock and warrants, net ​ 34,048 ​ ​ 34 ​ ​ 22,181 ​ ​ — ​ ​ 22,215 Exercise of stock options ​ 129 ​ ​ 1 ​ ​ 74 ​ ​ — ​ ​ 75 Stock-based compensation ​ — ​ ​ — ​ ​ 3,438 ​ ​ — ​ ​ 3,438 Restricted stock units vested and distributed ​ 1,228 ​ ​ 1 ​ ​ ( 1 ) ​ ​ — ​ ​ — Tax withholdings related to net share settlements of equity awards ​ ( 54 ) ​ ​ ( 1 ) ​ ​ ( 58 ) ​ ​ — ​ ​ ( 59 ) Balance, December 27, 2025 ​ 307,337 ​ $ 308 ​ $ 357,001 ​ $ ( 362,512 ) ​ $ ( 5,203 ) ​ See accompanying Notes to Consolidated Financial Statements. ​ 55 Table of Contents Netlist, Inc. and Subsidiaries ​ CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 27, ​ December 28, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 24,824 ) ​ $ ( 53,865 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ ​ 280 ​ ​ 345 Non-cash lease expense ​ ​ 560 ​ ​ 570 Gain on forgiveness of payables ​ ​ ( 630 ) ​ ​ ( 471 ) Stock-based compensation ​ ​ 3,438 ​ ​ 4,436 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ ( 740 ) ​ ​ 2,891 Inventories ​ ​ ( 639 ) ​ ​ 9,287 Prepaid expenses and other assets ​ ​ 955 ​ ​ 281 Accounts payable ​ ​ ( 21,695 ) ​ ​ 2,476 Accrued payroll and related liabilities ​ ​ 44 ​ ​ ( 538 ) Deferred revenue ​ ​ 30,530 ​ ​ 40 Other liabilities ​ ​ ( 2,014 ) ​ ​ ( 37 ) Net cash used in operating activities ​ ​ ( 14,735 ) ​ ​ ( 34,585 ) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Acquisition of property and equipment ​ ​ ( 42 ) ​ ​ ( 71 ) Net cash used in investing activities ​ ​ ( 42 ) ​ ​ ( 71 ) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Net borrowings (repayments) under line of credit ​ ​ 558 ​ ​ ( 2,614 ) Principal repayments under finance lease ​ ​ — ​ ​ ( 90 ) Payments on notes payable ​ ​ ( 537 ) ​ ​ ( 500 ) Proceeds from issuance of common stock and warrants, net ​ ​ 22,215 ​ ​ 19,456 Proceeds from exercise of stock options ​ ​ 75 ​ ​ 185 Payments for taxes related to net share settlement of equity awards ​ ​ ( 59 ) ​ ​ ( 19 ) Net cash provided by financing activities ​ ​ 22,252 ​ ​ 16,418 Net change in cash, cash equivalents and restricted cash ​ ​ 7,475 ​ ​ ( 18,238 ) Cash, cash equivalents and restricted cash at beginning of period ​ ​ 34,607 ​ ​ 52,845 Cash, cash equivalents and restricted cash at end of period ​ $ 42,082 ​ $ 34,607 ​ ​ ​ ​ ​ ​ ​ Reconciliation of cash, cash equivalents and restricted cash at end of period: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 31,782 ​ $ 22,507 Restricted cash ​ ​ 10,300 ​ ​ 12,100 Cash, cash equivalents and restricted cash at end of period ​ $ 42,082 ​ $ 34,607 ​ See accompanying Notes to Consolidated Financial Statements. ​ 56 Table of Contents ​ Netlist, Inc. and Subsidiaries ​ Notes to Consolidated Financial Statements ​ Note 1—Summary of Significant Accounting Policies ​ Basis of Presentation ​ Netlist, Inc. and its wholly owned subsidiaries (collectively the “Company,” “Netlist,” “we,” “us,” or “our”) is a leading innovator in advanced memory and storage solutions. With a rich portfolio of patented technologies, Netlist's inventions are foundational to the advancement of AI computing. ​ The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of Netlist, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. Actual results may differ materially from those estimates. We have evaluated events occurring subsequent to December 27, 2025 through the filing date of this Form 10-K and concluded that there were no events that required recognition and disclosures, other than those discussed elsewhere in the notes hereto. Certain prior period amounts have been reclassified to conform to the current period’s presentation. ​ Our fiscal year is the 52 - or 53 -week period that ends on the Saturday nearest to December 31. Our fiscal year 2025 ended on December 27, 2025 and fiscal year 2024 ended on December 28, 2024. All fiscal years presented in this Form 10-K included 52 weeks. Additionally, all quarters included 13 weeks. Unless otherwise stated, all information presented herein is based on our fiscal calendar, and references to particular years, quarters, months or periods refer to our fiscal years ended in January or December and the associated quarters, months and periods of those fiscal years. ​ Recently Issued Accounting Standards ​ In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which updates expense disclosure requirements on an annual and interim basis. This ASU is effective for the annual periods beginning after December 15, 2026, and the interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU. ​ In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require us to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. We adopted this ASU on December 27, 2025. The adoption only impacted our disclosure and has no material impact on the Company’s consolidated financial statements as of and for the year ended December 27, 2025. ​ Revenue Recognition ​ Product Revenue ​ Revenue is recognized when control is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods and services. Revenue recognition is evaluated through the five steps outlined within the accounting guidance. Substantially all of our product sales relate to products sold at a point in time through ship-and-bill performance obligations. At contract inception, an 57 Table of Contents assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, we consider all of the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Contracts with customers are comprised of customer purchase orders, invoices (including our standard terms and conditions) and written contracts. ​ Performance Obligations ​ Net product sales and related cost of sales are primarily the result of promises to transfer products to customers. For performance obligations related to substantially all of the ship-and-bill products, control transfers at a point in time when title transfers upon shipment of the product to the customer, and for some sales, control transfers when title is transferred at time of receipt by the customer. Once a product has shipped or has been delivered, the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the asset. We consider control to have transferred upon shipment or delivery, because we have a present right to payment at that time, the customer has legal title to the asset, we have transferred physical possession of the asset, and the customer has the significant risks and rewards of ownership of the asset. ​ Amounts billed to our customers for shipping and handling are recorded in net sales. Shipping and handling costs incurred by us are included in cost of sales in the accompanying consolidated statements of operations. ​ Significant Payment Terms ​ For ship-and-bill type contracts with customers, the invoice states the final terms of the sale, including the description, quantity, and price of each product purchased. Payment terms are typically due within 30 days after delivery but, in limited instances, can range up to 90 days after delivery. Accordingly, our contracts with customers do not include a significant financing component. ​ Variable Consideration ​ Our revenue generating activities include variable consideration which is recorded as a reduction of the transaction price based upon expected amounts at the time revenue for the corresponding product sale is recognized. Common forms of variable consideration include limited rights of return for up to 30 days, except for sales of excess component inventories, which contain no right-of-return privileges and volume rebates for meeting established sales targets. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the anticipated performance and all information (historical, current and forecasted) that is reasonably available. ​ Returns for products sold are estimated using the expected value method and are recorded as a reduction in reported revenues at the time of sale based upon historical product return experience and are adjusted for known trends to arrive at the amount of consideration to which we expect to receive. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. ​ Contract Assets and Liabilities ​ We continually evaluate whether the revenue generating activities and advanced payment arrangements with customers result in the recognition of contract assets or liabilities. Generally, we do not have material amounts of contract assets since revenue is recognized as control of goods is transferred or as services are performed. Contract liabilities (deferred revenues) are comprised of payments received from our customers in advance of transferring products to customers. As of December 27, 2025, deferred revenue was $ 30.6 million. As of December 28, 2024, deferred revenue was immaterial. ​ 58 Table of Contents Warranties ​ We offer standard product warranties generally ranging from one to three years to our memory subsystem products customers, depending on the negotiated terms of any purchase agreements, and have no other post-shipment obligations or separately priced extended warranty or product maintenance contracts. These warranties require us to repair or replace defective product returned to us during the warranty period at no cost to the customer. Warranties are not offered on sales of component products. We record an estimate for warranty related costs at the time of sale based on our historical and estimated future product return rates and expected repair or replacement costs. Estimated future warranty costs are recorded in the period in which the sale is recorded and are included in cost of sales in the consolidated statements of operations. ​ Cash and Cash Equivalents ​ Cash and cash equivalents consist of cash and short-term investments with original maturities of three months or less. ​ Restricted Cash ​ Our restricted cash consists of cash to secure standby letters of credit (see Note 3 — Financing Arrangements). ​ Fair Value Measurements ​ Certain assets and liabilities are accounted for at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of those three levels based on the lowest level input that is significant to the fair value measurement in its entirety. ​ ● Level 1 – inputs are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. ● Level 2 – inputs are based on quoted prices of similar instruments in active markets, quoted prices for identical or similar instruments in market that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 – inputs are generally unobservable inputs for the asset or liability, which are typically based on management’s estimates of assumptions that market participants would use in pricing the assets and liabilities. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. ​ Our financial instruments consist principally of cash and cash equivalents, restricted cash, and a revolving line of credit. Cash equivalents consist of short-term investments with original maturities of three months or less and restricted cash consists of cash to secure standby letters of credit (see Note 3 — Financing Arrangements). The carrying value of these instruments approximates their fair value due to their short-term nature. The fair value of the revolving line of credit is estimated by using current applicable rates for similar instruments as of the balance sheet date and an assessment of the credit rating. The carrying values of the revolving line of credit as of December 27, 2025 and December 28, 2024 approximate fair value because the interest rate yield is near current market rates for comparable debt instruments. ​ Accounts Receivable, net ​ We extend credit to our customers. An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of our customers to make required payments. We specifically analyze the age of 59 Table of Contents customer balances, historical bad debt experiences, customer creditworthiness and changes in customer payment terms when making estimates of the collectability of our accounts receivable balances. If we determine that the financial condition of any of our customers has deteriorated, whether due to customer specific or general economic issues, an increase in the allowance may be made. After all attempts to collect a receivable have failed, the receivable is written off. As of December 27, 2025 and December 28, 2024, accounts receivable, net, was $ 2.4 million and $ 1.7 million, respectively. ​ Concentration of Credit Risk ​ Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, and accounts receivable. We invest our cash equivalents primarily in money market mutual funds. Cash equivalents are maintained with high quality institutions, the composition and maturities of which are regularly monitored by management. At times, deposits held with financial institutions may exceed the amount of insurance provided by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation. ​ Our accounts receivable are primarily derived from sales to original equipment manufacturers in the server, high-performance computing and communications markets, as well as from sales to storage customers, appliance customers, system builders and cloud and datacenter customers. We perform credit evaluations of our customers’ financial condition and limit the amount of credit extended when deemed necessary, but generally require no collateral. We believe the concentration of credit risk in our accounts receivable is moderated by our credit evaluation process, relatively short collection terms, a high level of credit worthiness of our customers (see Note 10 — Major Customers, Suppliers and Products), foreign credit insurance, and letters of credit issued in our favor. The allowance for credit losses is maintained, and such losses historically have not been significant and have been within management’s expectations. ​ Inventories ​ Inventories are valued at the lower of cost or the net realizable value. Cost is determined on an average cost basis which approximates actual cost on a first-in, first-out basis and includes raw materials, labor and manufacturing overhead. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. We evaluate inventory balances for excess quantities and obsolescence on a regular basis by analyzing estimated demand, inventory on hand, sales levels and other information and reduce inventory balances to net realizable value for excess and obsolete inventory based on this analysis. At the point of the write-down recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. ​ Property and Equipment ​ Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives, which generally range from three to seven years . Leasehold improvements are recorded at cost and amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term. Expenditures for repairs and maintenance are expensed as incurred. Upon retirement or sale, the cost and related accumulated depreciation and amortization of disposed assets are removed from the accounts and any resulting gain or loss is included in other income (expense), net in the consolidated statements of operations. ​ Impairment of Long-Lived Assets ​ We evaluate the recoverability of the carrying value of long-lived assets held and used by us in our operations for impairment on at least an annual basis or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. When such factors and circumstances exist, we compare the projected undiscounted future net cash flows associated with the related asset or group of assets over their 60 Table of Contents estimated useful lives against their respective carrying amount. These projected future cash flows may vary significantly over time as a result of increased competition, changes in technology, fluctuations in demand, consolidation of our customers and reductions in average sales prices. If the carrying value is determined not to be recoverable from future operating cash flows, the asset is deemed impaired and an impairment loss is recognized to the extent the carrying value exceeds the estimated fair value of the asset. The fair value of the asset or asset group is based on market value when available, or when unavailable, on discounted expected cash flows. Management believes there is no impairment of long-lived assets as of December 27, 2025 and December 28, 2024. ​ Leases ​ We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, accrued expenses and other current liabilities, and operating lease liabilities on our consolidated balance sheets. Finance leases are included in property and equipment, accrued expenses and other current liabilities, and other liabilities in our consolidated balance sheets. ​ ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. ​ We have lease agreements with lease and non-lease components, which are accounted for as a single lease component. We do not present short-term leases on the balance sheet, as those leases have a lease term of twelve months or less at inception and do not contain purchase options or renewal terms that we are reasonably certain to exercise. ​ Stock-Based Compensation ​ Stock-based awards are comprised principally of stock options and restricted stock units (“RSUs”). Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period, which is the vesting period, on a straight-line basis, net of estimated forfeitures. We use the Black-Scholes option pricing model to determine the grant date fair value of stock options. The model requires us to estimate the expected volatility and expected term of the stock options, which are highly complex and subjective variables. The expected volatility is based on the historical volatility of our common stock. The expected term is computed using the simplified method as our best estimate given our lack of actual exercise history. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected term of the grant effective as of the date of the grant. The expected dividend assumption is based on our history and management’s expectation regarding dividend payouts. The grant-date fair value of RSUs equals the closing price of our common stock on the grant date. ​ Income Taxes ​ Deferred income tax assets and liabilities are recognized for temporary differences between the financial statement carrying amounts of assets and liabilities and the amounts that are reported in the income tax returns. Deferred taxes are evaluated for realization on a jurisdictional basis. We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. In making this assessment, management analyzes future taxable income, reversing temporary differences and ongoing tax planning strategies. Should a change in circumstances lead to a change in judgment about the realizability of 61 Table of Contents deferred tax assets in future years, we will adjust related valuation allowances in the period that the change in circumstances occurs, along with a corresponding increase or charge to income. ​ We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of our position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized. The amount of unrecognized tax benefits is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax laws, new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. We recognize both accrued interest and penalties associated with uncertain tax positions as a component of provision for income taxes in the consolidated statements of operations. ​ The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations may change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability for U.S. or foreign taxes may be materially different from our estimates, which could require us to record additional tax liabilities or to reduce previously recorded tax liabilities, as applicable. ​ Contingent Legal Expenses ​ Contingent legal fees are expensed in the consolidated statements of operations in the period that the related revenues are recognized. In instances where there are no recoveries from potential infringers, no contingent legal fees are paid; however, we may be liable for certain out of pocket legal costs incurred pursuant to the underlying legal services agreement. ​ Research and Development Expenses ​ Research and development expenditures are expensed in the period incurred. ​ Foreign Currency Remeasurement ​ The functional currency of our foreign subsidiaries is the U.S. dollar. Local currency financial statements are remeasured into U.S. dollars at the exchange rate in effect as of the balance sheet date for monetary assets and liabilities and the historical exchange rate for nonmonetary assets and liabilities. Expenses are remeasured using the average exchange rate for the period, except items related to nonmonetary assets and liabilities, which are remeasured using historical exchange rates. All remeasurement gains and losses are included in determining net loss. Transaction gains and losses were not significant during 2025 and 2024. ​ Loss Per Share ​ Basic loss per share is calculated by dividing net loss by the weighted-average common shares outstanding during the period. Diluted loss per share is calculated by dividing the net loss by the weighted-average shares and dilutive potential common shares outstanding during the period. Dilutive potential shares consist of dilutive shares issuable upon the exercise of outstanding stock options and warrants computed using the treasury stock method, shares issuable under the conversion feature of a convertible note using the “if- 62 Table of Contents converted” method, and shares issuable upon the vesting of RSUs. In periods of net loss, basic and diluted loss per share are the same, as the effect of dilutive potential shares on loss per share is anti-dilutive . ​ Segment Information ​ Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker, the chief executive officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance on a regular basis. Accordingly, the Company considers itself to be one reportable segment, which is comprised of one operating segment: resales of third-party products and sale of our modular memory subsystems. Significant expenses were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 Expense: ​ ​ ​ ​ ​ ​ Employee Compensation (1) ​ $ 7,935 ​ $ 9,467 Stock Based Compensation ​ ​ 3,438 ​ ​ 4,436 Program Expenses (2) ​ ​ 2,567 ​ ​ 4,104 Professional Fees (3) ​ ​ 19,769 ​ ​ 37,147 ​ (1) The amounts consisted of employee compensation related to both COGS and operating expenses. The amounts do not include stock-based compensation. The amounts do not include professional fees. (2) The amounts consisted of costs, such as outside services, depreciation, and dues and subscriptions, related to both COGS and operating expenses. The amounts do not include professional fees. (3) The amounts consisted of legal fees, tax and audit fees. ​ ​ 63 Table of Contents Note 2—Supplemental Financial Information ​ Inventories ​ Inventories consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Raw materials ​ $ 181 ​ $ 379 Work in process ​ ​ 190 ​ ​ 54 Finished goods ​ ​ 3,012 ​ ​ 2,311 ​ ​ $ 3,383 ​ $ 2,744 ​ ​ Property and Equipment, net ​ Property and equipment, net consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Machinery and equipment $ 779 ​ $ 765 Computer equipment and software ​ 1,780 ​ ​ 1,761 Leasehold improvements ​ 113 ​ ​ 495 Furniture and fixtures ​ 630 ​ ​ 630 ​ ​ 3,302 ​ ​ 3,651 Less: accumulated depreciation and amortization ​ ( 3,002 ) ​ ​ ( 3,134 ) ​ $ 300 ​ $ 517 ​ Substantially all our property and equipment are located within the United States as of December 27, 2025 and December 28, 2024. ​ Disaggregation of Net Sales ​ The following table shows disaggregated net sales by major source (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 Resales of third-party products ​ $ 180,070 ​ $ 134,851 Sale of our modular memory subsystems ​ ​ 8,560 ​ ​ 12,252 Total net sales ​ $ 188,630 ​ $ 147,103 ​ Net product sales by country presented below are based on the billing location of the customer (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 United States ​ $ 11,223 ​ $ 19,741 People's Republic of China (1) ​ ​ 170,750 ​ ​ 124,173 Other countries ​ ​ 6,657 ​ ​ 3,189 Total net sales ​ $ 188,630 ​ $ 147,103 (1) People’s Republic of China (“PRC”) includes Hong Kong and Taiwan. ​ The PRC accounted for more than 10 % of our net product sales for fiscal year 2025. The United States and the PRC accounted for more than 10 % of our net product sales for fiscal year 2024. ​ 64 Table of Contents Loss Per Share ​ The following table shows the computation of basic and diluted loss per share of common stock (in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 Net loss per share—basic and diluted: ​ ​ ​ ​ ​ ​ Numerator: ​ ​ ​ ​ ​ ​ Numerator: Net loss ​ $ ( 24,824 ) ​ $ ( 53,865 ) Less: Deemed dividend on warrant modification ​ ​ ( 590 ) ​ ​ — Net loss attributable to common stock ​ $ ( 25,414 ) ​ $ ( 53,865 ) ​ ​ ​ ​ ​ ​ ​ Denominator: Weighted-average basic shares outstanding - basic and diluted ​ ​ 286,638 ​ ​ 259,904 Net loss per share - basic and diluted ​ $ ( 0.09 ) ​ $ ( 0.21 ) ​ No allocation of undistributed earnings to participating securities was performed for periods with net loss as such securities do not have a contractual obligation to share in our loss. ​ The table below sets forth potentially dilutive weighted average common share equivalents, consisting of shares issuable upon the exercise of outstanding stock options and warrants using the treasury stock method and the shares vesting of issuable upon RSUs. These potential weighted average common share equivalents have been excluded from the diluted net loss per share calculations above as their effect would be anti-dilutive (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 Weighted average common share equivalents ​ ​ 2,185 ​ ​ 1,822 ​ Cash Flow Information ​ The following table shows supplemental disclosures of cash flow information and non-cash financing activities (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ Cash paid during the year for: ​ ​ ​ ​ ​ ​ Interest ​ $ 56 ​ $ 101 Income taxes ​ $ — ​ $ 1 Supplemental disclosure of non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Debt financing of insurance ​ $ 537 ​ $ 500 Deemed dividend on warrant modification ​ $ 590 ​ $ — ​ 65 Table of Contents ​ Liquidity ​ We incurred net loss of $ 24.8 million for the year ended December 27, 2025 and $ 53.9 million for the year ended December 28, 2024. As of December 27, 2025, cash, cash equivalents and restricted cash were $ 42.1 million, total assets were $ 49.5 million, working capital deficit was ($ 6.4 ) million, and stockholders’ deficit was ($ 5.2 ) million. We believe our existing balance of cash and cash equivalents (including restricted cash balances), which totaled $ 42.1 million as of December 27, 2025, along with cash receipts from revenues, borrowing availability under the 2023 SVB Credit Agreement (see Note 3), proceeds raised from the June 2025 Offering and October 2025 Offering (see Notes 8), funds raised through the March 2025 Purchase Agreement (see Note 8) and other future debt and 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. This belief reflects our current assessment of known trends and uncertainties that could affect near term liquidity, including the timing of cash effects from customer advance payments, fluctuations in borrowing base availability and letters of credit usage and market conditions that affect our ability to utilize the March 2025 Purchase Agreement. For the long term (i.e., beyond the next 12 months), based on our current plans and assumptions, we believe our sources of liquidity and access to capital will be adequate to meet our cash requirements as they come due, and we are not currently aware of material cash requirements beyond 12 months other than those described in the Notes to Consolidated Financial Statements. ​ Note 3—Financing Arrangements ​ 2023 SVB Credit Agreement ​ On November 7, 2023, we entered into a loan and security agreement (as amended to date, the “2023 SVB Credit Agreement”) with Silicon Valley Bank, a division of First-Citizen Bank & Trust Company (“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 Prime Rate. On November 7, 2025, we entered into a first amendment to the 2023 SVB Credit Agreement to, among other things, extend the maturity date from November 7, 2025 to November 7, 2027. ​ As of December 27, 2025, all obligations under the 2023 SVB Credit Agreement were secured by a first priority security interest in our tangible and intangible assets. The 2023 SVB Credit Agreement subjects us to certain affirmative and negative covenants, including financial covenants with respect to our liquidity and restrictions on the payment of dividends. As of December 27, 2025, we were in compliance with our covenants under the 2023 SVB Credit Agreement. ​ We have letters of credit issued by SVB under the 2023 SVB Credit Agreement and Citibank, N.A., which are secured by cash and are classified as restricted cash in the consolidated balance sheets. As of December 27, 2025 and December 28, 2024, (i) outstanding letters of credit were $ 10.3 million and $ 11.9 million, respectively, (ii) outstanding borrowings were $ 1.8 million and $ 1.2 million, respectively, and (iii) availability under the revolving line of credit was $ 0.2 million and $ 0 , respectively. 66 Table of Contents ​ Note 4—Leases ​ We have operating and finance leases primarily associated with office and manufacturing facilities and certain equipment. The determination of which discount rate to use when measuring the lease obligation was deemed a significant judgment. ​ Lease cost and supplemental consolidated cash flow information related to operating and finance leases were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Lease cost: ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 615 ​ $ 656 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 695 ​ $ 717 Right-of-use assets obtained in exchange for lease obligations: ​ ​ ​ ​ ​ ​ Operating leases ​ $ — ​ $ 81 ​ For each of the fiscal years 2025 and 2024, finance lease costs and cash flows from finance leases were immaterial. ​ Supplemental balance sheet information related to leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 Operating Leases ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets ​ $ 541 ​ $ 1,101 Other current liabilities ​ $ 619 ​ $ 640 Operating lease liabilities ​ ​ 23 ​ ​ 641 Total operating lease liabilities ​ $ 642 ​ $ 1,281 ​ ​ ​ ​ ​ ​ ​ Finance Leases ​ ​ ​ ​ ​ ​ Property and equipment, at cost ​ $ 488 ​ $ 488 Accumulated depreciation ​ ​ ( 380 ) ​ ​ ( 302 ) Property and equipment, net ​ $ 108 ​ $ 186 Other current liabilities ​ $ 3 ​ $ 4 Other liabilities ​ ​ — ​ ​ 3 Total finance lease liabilities ​ $ 3 ​ $ 7 ​ 67 Table of Contents The following table includes supplemental information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 Weighted Average Remaining Lease Term (in years) ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 1.0 ​ ​ 2.0 Finance leases ​ ​ 0.6 ​ ​ 1.6 ​ ​ ​ ​ ​ ​ ​ Weighted Average Discount Rate ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 5.5 % ​ ​ 5.7 % Finance leases ​ ​ 5.5 % ​ ​ 5.5 % ​ ​ Maturities of lease liabilities as of December 27, 2025 were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ Finance Fiscal Year ​ Leases ​ Leases 2026 ​ $ 639 ​ $ 3 2027 ​ ​ 23 ​ ​ — Total lease payments ​ ​ 662 ​ ​ 3 Less: imputed interest ​ ​ ( 20 ) ​ ​ — Total ​ $ 642 ​ $ 3 ​ ​ Note 5—Income Taxes ​ United States and foreign loss before provision for income taxes was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 United States ​ $ ( 24,614 ) ​ $ ( 53,527 ) Foreign ​ ​ ( 210 ) ​ ​ ( 337 ) ​ ​ $ ( 24,824 ) ​ $ ( 53,864 ) ​ The provision for income taxes consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Current: ​ ​ ​ ​ ​ ​ Federal ​ $ — ​ $ — State ​ ​ — ​ ​ 1 Foreign ​ ​ — ​ ​ — Total current ​ ​ — ​ ​ 1 Deferred: ​ ​ ​ ​ ​ ​ Federal ​ ​ ( 4,579 ) ​ ​ ( 10,606 ) State ​ ​ ( 140 ) ​ ​ ( 713 ) Foreign ​ ​ 78 ​ ​ 44 Change in valuation allowance ​ ​ 4,641 ​ ​ 11,275 Total deferred ​ ​ — ​ ​ — Provision for income taxes ​ $ — ​ $ 1 ​ ​ ​ ​ ​ ​ ​ ​ 68 Table of Contents Income taxes differ from the amounts computed by applying the statutory federal income tax rate of 21 % for fiscal years 2025 and 2024. The reconciliation of this difference is as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Statutory federal income tax rate ​ ​ ( 21 %) ​ ​ ( 21 %) Foreign withholding taxes ​ ​ —% ​ ​ —% Excess tax benefits from equity awards ​ ​ 2 % ​ ​ 1 % Change in valuation allowance ​ ​ 19 % ​ ​ 20 % Other ​ ​ —% ​ ​ —% Effective tax rate ​ ​ —% ​ ​ —% ​ ​ ​ ​ ​ ​ ​ ​ Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of the deferred tax assets and liabilities are as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Deferred tax assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating loss carryforward ​ ​ ​ ​ $ 72,491 ​ $ 65,734 Tax credit carryforwards ​ ​ ​ ​ ​ 5,320 ​ ​ 5,434 Capitalized research and development expenses ​ ​ ​ ​ ​ 2,656 ​ ​ 3,825 Reserves and allowances ​ ​ ​ ​ ​ 182 ​ ​ 437 Foreign operating loss carryforward ​ ​ ​ ​ ​ 536 ​ ​ 614 Stock-based compensation ​ ​ ​ ​ ​ 558 ​ ​ 621 Other ​ ​ ​ ​ ​ 291 ​ ​ 854 Total deferred tax assets ​ ​ ​ ​ ​ 82,034 ​ ​ 77,519 Deferred tax liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets ​ ​ ​ ​ ​ ( 120 ) ​ ​ ( 245 ) Prepaid expenses ​ ​ ​ ​ ​ ( 42 ) ​ ​ ( 47 ) Depreciation and amortization ​ ​ ​ ​ ​ ( 86 ) ​ ​ ( 82 ) Total deferred tax liabilities ​ ​ ​ ​ ​ ( 248 ) ​ ​ ( 374 ) Net deferred tax assets ​ ​ ​ ​ ​ 81,786 ​ ​ 77,145 Valuation allowance ​ ​ ​ ​ ​ ( 81,786 ) ​ ​ ( 77,145 ) ​ ​ ​ ​ ​ $ — ​ $ — ​ We evaluate whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified. As of December 27, 2025 and December 28, 2024, a valuation allowance of $ 81.8 million and $ 77.1 million, respectively, has been provided based on our assessment that it is more likely than not that sufficient taxable income will not be generated to realize the tax benefits of the temporary differences. The valuation allowance increased by $ 4.6 million and $ 11.3 million during fiscal years 2025 and 2024, respectively. These increases in these years primarily relate to the increases in the net operating loss (“NOL”) carryforward and tax credit carryforwards. ​ As of December 27, 2025 we had $ 300.3 million of federal NOL carryforwards, of which $ 104.2 million will expire from 2028 through 2037, and $ 196.1 million of which will be carried forward indefinitely, and $ 106.6 million of state NOL carryforwards that will expire from 2029 through 2045. We had federal and state tax credit carryforwards of $ 2.8 million and $ 2.5 million, respectively, at December 27, 2025. Federal tax credit carryforwards began to expire in 2025 and state tax credits carryforward indefinitely. In addition, we had $ 2.1 million of NOL in the PRC that expired in 2025, with a remaining amount of $ 0.5 million of NOL carryforward in the PRC at December 27, 2025. Utilization of the NOL and tax credit carryforwards is subject to an annual limitation due to the ownership percentage change limitations provided by Section 382 of the Internal Revenue Code (the “Code”) and similar state and foreign law provisions. Under Section 382 of the Code, 69 Table of Contents substantial changes in our ownership may limit the amount of NOL and tax credit carryforwards that are available to offset taxable income. The annual limitation would not automatically result in the loss of NOL and tax credit carryforwards but may limit the amount available in any given future period. Additional limitations on the use of these tax attributes could occur in the event of possible disputes arising in examination from various taxing authorities. ​ We file income tax returns with federal, state and foreign jurisdictions. We are no longer subject to Internal Revenue Service (“IRS”) or state examinations for periods prior to 2022, although certain carryforward attributes that were generated prior to 2022 may still be adjusted by the IRS. ​ We include interest and penalties related to uncertain tax positions within the provision for income taxes. As of December 27, 2025 and December 28, 2024, the interest or penalties accrued related to unrecognized tax benefits were insignificant, and during fiscal years 2025 and 2024, the interest and penalties related to uncertain tax position recorded were insignificant. As of December 27, 2025, we had no unrecognized tax benefits that would significantly change in the next 12 months. ​ Note 6—Related Party Transactions ​ Transactions with related parties are reviewed and approved by the audit committee of our board of directors. We believe the terms of the related party transactions described below were no less favorable to us than terms that could have been obtained from unaffiliated third parties under similar circumstances. ​ June 2025 Offering. On June 24, 2025, we entered into a Securities Purchase Agreement in connection with a registered offering of common stock and warrants (the “June 2025 Offering”). Chun K. Hong, our Chairperson, President and Chief Executive Officer, participated in the June 2025 Offering on the same terms as all other purchasers and acquired 4,285,715 shares of common stock and warrants to purchase up to 8,571,430 shares of common stock for an aggregate purchase price of approximately $ 3.0 million. The transaction was approved by the audit committee in accordance with the policy described above. We received the full purchase price in cash; no amounts were due from Mr. Hong as of December 27, 2025 or December 28, 2024. See also Note 8—Stockholders’ Equity for additional information about the June 2025 Offering and related warrants. ​ Family relationship—executive officer compensation. Our Executive Vice President of Sales and Operations (formerly, our Vice President of Netlist Base and Commodity Sales), Paik K. Hong, is the brother of Chun K. Hong. For fiscal year 2025, Mr. P. K. Hong earned a cash salary of $ 250,000 . He received $ 3,000 for matching contributions for a savings plan that qualifies as a defined contribution plan under Section 401(k) of the Code. He was also granted 100,000 shares of RSUs with the grant date fair value of $ 63,525 measured in accordance with ASC 718. For fiscal year 2024, Mr. P. K. Hong earned a cash salary of $ 250,000 . He received $ 1,400 for weekly fitness training and $ 3,000 for matching contributions for a savings plan that qualifies as a defined contribution plan under Section 401(k) of the Code. He was also granted 100,000 shares of RSUs with the grant date fair value of $ 133,000 measured in accordance with ASC 718. The grant date fair value was determined using the fair value of the underlying shares of our common stock. ​ Note 7—Commitments and Contingencies ​ Contingent Legal Expenses ​ Any litigation, regardless of its outcome, is inherently uncertain, involves a significant dedication of resources, including time and capital, and diverts management’s attention from our other activities. As a result, any current or future claims, allegations, or challenges by or against third parties, whether eventually decided in our favor or settled, could materially adversely affect our business, financial condition and results of operations. Additionally, the outcome of pending or future litigation and/or related patent reviews and reexaminations, as well as any delay in their resolution, could affect our ability to continue to sell our 70 Table of Contents products, protect against competition in the current and expected markets for our products or license or otherwise monetize our intellectual property rights in the future. ​ We retain the services of law firms that specialize in patent licensing and enforcement and patent law in connection with our licensing and enforcement activities. These law firms are often retained on a contingent fee basis whereby such law firms are paid on a scaled percentage of any negotiated fee, settlements or judgments awarded based on how and when the fees, settlements or judgments are obtained. ​ Litigation and Challenges to Netlist Patents at the U.S. Patent and Trademark Office (“USPTO”) and the Patent Trial & Appeal Board (“PTAB”) ​ We are, from time to time, a party to litigation that arises in the normal course of our business operations. We own numerous patents and continue to seek to grow and strengthen our patent portfolio, which covers various aspects of our innovations and includes various claim scopes. We plan to pursue avenues to monetize our intellectual property portfolio, in which we would generate revenue by selling or licensing our technology, and we intend to vigorously enforce our patent rights against alleged infringers of such rights. We dedicate substantial resources to protecting and enforcing our intellectual property rights, including with patent infringement proceedings we file against third parties and defense of our patents against challenges made by way of reexamination and review proceedings at the USPTO and PTAB. We expect these activities to continue for the foreseeable future, with no guarantee that any ongoing or future patent protection or litigation activities will be successful, or that we will be able to monetize our intellectual property portfolio. ​ Samsung Litigation ​ On May 28, 2020, Netlist filed a complaint against Samsung Electronics Co., Ltd. (“SECL”) in the U.S. District Court for the Central District of California (“CDCA”) ( Netlist Inc. vs. Samsung Electronics Co., Ltd ., Case No. 8:20-cv-00993) for SECL’s breach of the Joint Development and License Agreement (“JDLA”) between the parties. Netlist amended its complaint to seek a declaratory judgment that it properly terminated the JDLA in light of SECL’s material breaches thereof. On October 14, 2021, the Court granted summary judgment in favor of Netlist on SECL’s breach and Netlist’s termination of the JDLA. The case proceeded to trial on the issue of damages on December 1, 2021, and the jury reached a verdict for SECL on December 3, 2021. The Court entered final judgment on February 15, 2022, and both parties appealed to the U.S. Court of Appeals for the Ninth Circuit. The Ninth Circuit affirmed-in-part and reversed-in-part the judgment of the District Court, and remanded the case to the District Court, which reopened the case on November 13, 2023. The case proceeded to trial on May 14, 2024, and the jury reached a verdict for Netlist on May 17, 2024. On December 26, 2024, the Court granted SECL’s motion for a new trial, holding that one juror’s voir dire responses support a finding of implied juror bias which deprived both parties of their right to a fair trial. A new trial was held from March 18 to March 21, 2025. On March 24, 2025, the jury returned a verdict for Netlist. On April 7, 2025, the Court entered final judgment in favor of Netlist on its claims that SECL breached the JDLA and that Netlist properly terminated the JDLA. On May 5, 2025, SECL filed a motion for a new trial. On June 27, 2025, the Court issued an order directing the parties to file a status report proposing how the Court should elicit testimony from the jurors at issue in SECL’s motion for a new trial. The parties filed the status report on July 9, 2025 and appeared before the Court on July 11, 2025. On July 17, 2025, the Court issued an order setting an evidentiary hearing regarding SECL’s motion for a new trial, and the evidentiary hearing was held on July 30, 2025. On August 4, 2025, the Court issued an order denying SECL’s motion for a new trial. On August 29, 2025, SECL filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. On September 2, 2025, the appeal was docketed and assigned Case No. 25-5531. The appeal is pending. ​ On October 15, 2021, SECL and Samsung Semiconductor, Inc. (“SSI”) filed a declaratory judgement action against Netlist in the U.S. District Court for the District of Delaware (“DDE”) ( Samsung Electronics Co., Ltd. et. al. v. Netlist, Inc., Case No. 1:21-cv-01453), seeking a declaration that SECL and SSI do not infringe the following Netlist patents: U.S. Patent Nos. 7,619,912; 9,858,218; 10,217,523; and 10,474,595 (respectively, the “’912, ’218, ’523, and ’595 Patents”). SECL and SSI filed amended complaints to add other Netlist patents: U.S. Patent Nos. 10,860,506; 10,949,339; 11,016,918; and 11,232,054 (respectively, the “’506, ’339, 71 Table of Contents ’918, and ’054 Patents”). Netlist filed a motion to dismiss, and on August 1, 2022, the Court granted this motion in part, declining to exercise jurisdiction over the ’912, ’506, ’339, ’918, and ’054 Patents. On September 12, 2022, Netlist filed a crossclaim against Google LLC and Alphabet, Inc. (collectively, “Google”) and counterclaims against SECL and SSI, seeking damages from the infringement by Google, SECL, and SSI, a finding of willful infringement by Google, SECL, and SSI and enhanced damages pursuant to 35 U.S.C. § 284, an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285, and equitable relief. On November 15, 2022, Google filed a motion to dismiss this case as to Google or, alternatively, for a severance, stay, and dismissal of willfulness and indirect infringement allegations. This motion was heard on May 22, 2023. On December 1, 2023, the Court stayed this case pending the resolution of the above CDCA case and ordered the parties to notify the Court within seven days of any action by the CDCA pertaining to the parties’ rights under the JDLA that may merit lifting the stay. On March 31, 2025, the parties notified the Court of the jury verdict in the above CDCA case. ​ On December 20, 2021, Netlist filed a complaint against SECL, SSI, and Samsung Electronics America, Inc. (“SEA”) (collectively, “Samsung”) in the U.S. District Court for the Eastern District of Texas (“EDTX”), Case No. 2:21-cv-00463, for infringement of the ’506, ’339, and ’918 Patents. Netlist later amended its complaint to additionally assert infringement of the ’054 Patent as well as U.S. Patent Nos. 8,787,060 and 9,318,160 (respectively, the “’060 and ’160 Patents”). On April 14, 2023, this case proceeded to a jury trial on the ’339, ’918, ’054, ’060, and ’160 Patents. On April 21, 2023, the jury returned a verdict finding that Samsung willfully infringed all five patents and awarded $ 303 million in damages to Netlist. The collectability of the damages award may be affected by the outcomes of pending appeals of final written decisions in the respective Inter Partes Reviews of the five patents (see below). On August 11, 2023, the Court entered final judgment. On August 9, 2024, Samsung filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit (“CAFC”), Case No. 2024-2203. On January 6, 2025, Samsung filed a motion to stay this appeal pending the resolution of the above CDCA case. On February 18, 2025, the CAFC denied this motion without prejudice. On January 21, 2026, the CAFC notified the parties that oral argument is set to take place on March 6, 2026. On March 6, 2026, the CAFC heard oral arguments on this appeal. The appeal is pending. ​ On August 1, 2022, Netlist filed a complaint against Samsung in EDTX (Case No. 2:22-cv-00293), for infringement of the ’912 Patent. Netlist later amended its complaint to additionally assert infringement of U.S. Patent Nos. 11,093,417; 9,858,215; and 10,268,608 (respectively, the “’417, ’215, and ’608 Patents”). On November 12, 2024, this case proceeded to a jury trial on the ’912, ’417, and ’608 Patents. On November 22, 2024, the jury returned a verdict finding that Samsung willfully infringed all three patents and awarded $ 118 million in damages to Netlist. The collectability of the damages award may be affected by the outcomes of pending appeals of final written decisions in the respective Inter Partes Reviews of the three patents (see below). On December 2, 2024, the Court entered final judgment. On December 4, 2024, Netlist filed a motion for a preliminary injunction and a subsequent permanent injunction. On December 30, 2024, Samsung filed a combined post-trial motion for judgment as a matter of law and for a new trial, and a motion to amend the judgment and to stay this case pending the resolution of the above CDCA case. On January 31, 2025, the Court denied Netlist’s motion for a preliminary injunction and a subsequent permanent injunction. ​ On October 9, 2023, Samsung filed a declaratory judgement action against Netlist in the DDE (Case No. 1:23-cv-01122), seeking a declaration that Samsung does not infringe Netlist’s U.S. Patent No. 11,386,024 (the “’024 Patent”). On November 6, 2023, Netlist moved to dismiss for lack of subject matter jurisdiction and failure to state a claim. On March 4, 2025, the Court denied this motion. On June 13, 2025, Netlist filed a motion to stay this action pending the resolution of the Inter Partes Review (“IPR”) of the ’024 Patent (Case No. IPR2025-00001). On July 8, 2025, the Court issued a scheduling and consolidation order consolidating this action with the action below (Case No. 1:24-cv-00614) and setting a Markman hearing on June 26, 2026, a hearing on case dispositive and Daubert motions on June 16, 2027, a pretrial conference on July 26, 2027, and a five-day jury trial starting on August 2, 2027. On August 1, 2025, the Court granted Netlist’s motion to stay the consolidated action pending the final written decisions in the two IPRs. ​ 72 Table of Contents On May 22, 2024, Samsung filed a declaratory judgement action against Netlist in the DDE (Case No. 1:24-cv-00614), seeking a declaration that Samsung does not infringe Netlist’s U.S. Patent No. 11,880,319 (the “’319 Patent”). On July 15, 2024, Netlist moved to dismiss for lack of subject matter jurisdiction and failure to state a claim, which the Court denied as moot in view of Samsung’s First Amended Complaint filed on August 5, 2024. On August 21, 2024, Netlist moved to dismiss the First Amended Complaint for lack of subject matter jurisdiction and failure to state a claim. On March 4, 2025, the Court denied this motion. On June 13, 2025, Netlist filed a motion to stay this action pending the resolution of the IPR of the ’319 Patent (Case No. IPR2025-00002). On July 8, 2025, the Court issued a scheduling and consolidation order consolidating this action with the action above (Case No. 1:23-cv-01122). ​ On May 19, 2025, Netlist filed a complaint against Samsung in the EDTX (Case No. 2:25-cv-00557) for infringement of U.S. Patent 12,308,087 (the “’087 Patent”). On June 27, 2025, the Court consolidated this case with the case against Micron asserting the ’087 Patent (Case No. 2:25-cv-00558). On July 8, 2025, Netlist filed (a) a First Amended Complaint against Samsung and Avnet, Inc. (“Avnet”) and (b) a First Amended Complaint against Micron and Avnet, asserting infringement of the ’087 Patent and U.S. Patent 10,025,731 (the “’731 Patent”), seeking damages from the infringement by the defendants, a finding of willful infringement and enhanced damages pursuant to 35 U.S.C. § 284, an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285, a permanent injunction pursuant to 35 U.S.C. § 283, and equitable relief. On July 22, 2025, Micron moved to dismiss the First Amended Complaint for improper venue. On July 25, 2025, the Court issued a Docket Control Order setting a claim construction hearing on September 25, 2026 and a trial date of March 15, 2027. On September 11, 2025, SEA and SSI filed a motion to dismiss for improper venue. On September 11, 2025, Samsung filed a motion to dismiss certain of Netlist’s infringement claims in the First Amended Complaint. On September 15, 2025, Avnet filed motions to dismiss both First Amended Complaints. On October 9, 2025, Netlist filed a Second Amended Complaint against Samsung and Avnet asserting infringement of the ’087 and ’731 Patents. On October 10, 2025, Micron moved to stay pending resolution of the venue dispute. On November 24, 2025, SEA and SSI filed a motion to dismiss for improper venue. On November 24, 2025, Samsung filed a motion to dismiss certain of Netlist’s infringement claims in the Second Amended Complaint. On November 24, 2025, Avnet filed a motion to partially dismiss the Second Amended Complaint. On January 28, 2026, Samsung filed a motion to stay this case pending the ITC investigation. On January 28, 2026, Avnet filed a motion to sever and stay. On February 27, 2026, Netlist filed a Third Amended Complaint against Samsung and Avnet. On March 6, 2026, the Court granted Micron’s motion to dismiss and transferred the member case against Micron to the DDE. On March 6, 2026, the Court granted Samsung’s motion to stay the case as to Samsung and Avnet pending ITC Investigation No. 337-TA-1472. ​ On May 20, 2025, Samsung filed a declaratory judgement action against Netlist in the DDE (Case No. 1:25-cv-00626) seeking a declaration that Samsung does not infringe Netlist’s ’087 Patent. On June 11, 2025, Netlist filed a motion to dismiss or transfer this declaratory judgement action to the EDTX based upon its first-filed EDTX action asserting the ’087 Patent. On July 29, 2025, Samsung filed a motion seeking leave to file an amended complaint seeking a declaration that Samsung does not infringe the ’087 and ’731 Patents as well as U.S. Patent 12,373,366 (the “’366 Patent”). ​ On July 28, 2025, Netlist filed a complaint against Samsung and Avnet in the EDTX (Case No. 2:25-cv-00748) for infringement of the ’366 Patent, seeking damages from the infringement by the defendants, a finding of willful infringement and enhanced damages pursuant to 35 U.S.C. § 284, an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285, a permanent injunction pursuant to 35 U.S.C. § 283, and equitable relief. On October 29, 2025, the Court consolidated this case with the case against Micron and Avnet asserting the ’366 Patent (Case No. 2:25-cv-00749). On November 19, 2025, SSI and SEA moved to dismiss for improper venue. On November 19, 2025, Samsung filed a motion to dismiss certain of Netlist’s infringement claims. On December 10, 2025, the Court issued a Docket Control Order setting a claim construction hearing on February 18, 2027 and a trial date of August 16, 2027. On January 4, 2026, Netlist filed a First Amended Complaint against Samsung and Avnet, and a First Amended Complaint against Micron and Avnet. On January 26, 2026, Micron filed a motion to dismiss Netlist’s First Amended Complaint. On January 28, 2026, Samsung filed a motion to stay this case pending the ITC investigation. On 73 Table of Contents January 28, 2026, Avnet filed a motion to sever and stay. On March 2, 2026, Netlist filed a Second Amended Complaint against Samsung and Avnet. ​ On September 30, 2025, Netlist filed a complaint under Section 337 of the Tariff Act of 1930, as amended (19 U.S.C. § 1337) at the U.S. International Trade Commission (“ITC”) for patent infringement against Samsung, Google, and Super Micro Computer, Inc. (“Super Micro”) (collectively, “Respondents”). The complaint alleges infringement of six Netlist patents (the ’366, ’731, ’608, ’523, ’035, and ’087 Patents) by one or more of Samsung’s Double Data Rate 5 th Gen. (“DDR5”) Dual Inline Memory Module (“DIMM”) or High Bandwidth Memory (“HBM”) products, Google and Super Micro products containing the same, and components thereof. Netlist seeks a limited exclusion order and a permanent cease-and-desist order from the ITC to stop Respondents’ infringing acts with respect to these infringing products. On December 29, 2025, the ITC instituted an investigation into the Respondents’ alleged infringing acts (Investigation No. 337-TA-1472). ​ On November 11, 2025, Samsung filed a declaratory judgement action against Netlist in the DDE (Case No. 1:25-cv-01371) seeking a declaration that Samsung does not infringe Netlist’s ’035 Patent. ​ On December 31, 2025, Samsung filed its counterclaims in the ITC investigation, asserting counterclaims for violations of Section 2 of the Sherman Act, breach of contract, and unfair competition by Netlist, and sought a declaratory judgment of unenforceability of an exclusion order. Pursuant to ITC procedure, the counterclaims were immediately removed to the DDE and docketed as Case No. 1:25-cv-01589. ​ Micron Litigation ​ On April 28, 2021, Netlist filed complaints against Micron Semiconductor Products, Inc., Micron Technology, Inc., and Micron Technology Texas, LLC (collectively, “Micron”) in the Western District of Texas (“WDTX”) (Case Nos. 6:21-cv-00430 and 6:21-cv-00431), for infringement of U.S. Patent Nos. 8,301,833; 9,824,035; 10,268,608; and 10,489,314 (respectively, the “’833, ’035, ’608, and ’314 Patents”), seeking damages, a finding of willful infringement and enhanced damages pursuant to 35 U.S.C. § 284, and an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285. On February 14, 2022, the Court granted Micron’s motion to transfer venue for convenience to another court within WDTX, and the transferred cases were assigned new case nos. 1:22-cv-00134 and 1:22-cv-00136. On May 11, 2022, the Court granted motions to stay the two cases pending the respective Inter Partes Reviews of the ’833, ’035, ’608, and ’314 Patents. ​ On June 10, 2022, Netlist filed a complaint against Micron in EDTX (Case No. 2:22-cv-00203), for infringement of the ’506, ’339, ’918, ’054, ’060 and ’160 Patents, seeking damages, a finding of willful infringement and enhanced damages pursuant to 35 U.S.C. § 284, an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285, and equitable relief. On May 19, 2023, Micron filed a motion to stay this case pending the respective Inter Partes Reviews of the six asserted patents. On October 22, 2023, the magistrate judge issued a claim construction order, which the Court adopted on January 17, 2024. On January 3, 2024, the magistrate judge issued a recommendation to deny Micron’s motion to stay this case, which the Court adopted on January 31, 2024. On February 10, 2024, the Court vacated its prior order, staying this case pending the respective Inter Partes Reviews of the six asserted patents. ​ On August 1, 2022, Netlist filed a complaint against Micron in EDTX (Case No. 2:22-cv-00294), for infringement of the ’912 Patent. Netlist later amended its complaint to additionally assert infringement of the ’417 and ’215 Patents. On May 20, 2024, this case proceeded to a jury trial on the ’912 and ’417 Patents. On May 23, 2024, the jury returned a verdict finding that Samsung willfully infringed both patents and awarded $ 445 million in damages to Netlist. The collectability of the damages award may be affected by the outcomes of pending appeals of final written decisions in the respective Inter Partes Reviews of the two patents (see below). On July 11, 2024, the Court entered final judgment. On August 7, 2024, Micron filed post-trial motions for judgment as a matter of law and for a new trial. On June 11, 2025, the Court denied Micron’s motions for judgment as a matter of law on willfulness, on non-infringement, and on damages as well 74 Table of Contents as Micron’s motion for a new trial. On July 9, 2025, Micron filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit (“CAFC”), Case No. 2025-1936. The appeal is pending. ​ On December 11, 2023, Micron filed a complaint against Netlist in the District Court of the Fourth Judicial District of the State of Idaho, Ada County (“Idaho State Court”) (Case No. CV01-23-19920), alleging that Netlist violated Idaho Code § 48-1703 by making a bad faith assertion of infringement of the ’833 Patent in WDTX, seeking compensatory and exemplary damages pursuant to Code §§ 48-1706(b) and (d), and costs and fees, including reasonable attorneys’ fees, pursuant to Code § 48-1706(c). Netlist removed the case to the U.S. District Court for the District of Idaho, and Micron moved to remand the case to the Idaho State Court. On August 16, 2024, the District of Idaho remanded this case to the Idaho State Court. On August 20, 2024, Netlist appealed the remand to the CAFC, Case No. 2024-2281, and moved the District of Idaho to stay the remand. On September 17, 2024, Micron moved to dismiss or transfer the appeal to the U.S. Court of Appeals for the Ninth Circuit, which the CAFC denied on December 19, 2024. On September 18, 2024, Netlist moved to dismiss the Idaho State Court case for lack of personal jurisdiction and failure to state a claim, which the Idaho State Court denied on December 5, 2024. On June 12, 2025, the CAFC denied Netlist’s motion to stay the remand pending the appeal; the appeal remains pending. On December 8, 2025, the Idaho State Court set a trial date for December 7, 2026. On January 12, 2026, the Court appointed a discovery master to address the pending discovery disputes between the parties. ​ On December 23, 2023, Netlist filed a complaint for declaratory judgment against Micron in EDTX (Case No. 2:23-cv-00628), seeking a declaration that Netlist had not asserted patent infringement in bad faith against Micron in the prior EDTX patent infringement cases. On January 19, 2024, Micron moved to dismiss this case for lack of subject matter jurisdiction. On February 7, 2024, Netlist filed a First Amended Complaint. On July 19, 2024, the Court denied Micron’s motion to dismiss as moot. On December 5, 2024, Netlist moved for a protective order to preclude Micron from seeking discovery into Netlist’s subjective intent in filing the prior EDTX patent infringement cases. On December 13, 2024, Micron moved to stay this case on abstention grounds. On March 27, 2025, the Court stayed this case pending the conclusion of the CAFC appeals of the Inter Partes Review (“IPR”) decisions on the Netlist patents asserted against Micron in the prior EDTX patent infringement cases. ​ On January 16, 2024, Micron filed a complaint against Netlist in Idaho State Court (Case No. CV01-24-01032), alleging that Netlist violated Idaho Code § 48-1703 by making a bad faith assertion of infringement of the ’918 and ’054 Patents in the EDTX, seeking compensatory and exemplary damages pursuant to Code §§ 48-1706(b) and (d), and costs and fees, including reasonable attorneys’ fees, pursuant to Code § 48-1706(c). Netlist removed the case to the U.S. District Court for the District of Idaho, and Micron moved to remand the case to the Idaho State Court. On August 13, 2024, the District of Idaho remanded this case to the Idaho State Court. On August 20, 2024, Netlist appealed the remand to the CAFC, Case No. 2024-2282, and moved the District of Idaho to stay the remand. On September 10, 2024, the appeal was consolidated with the above-related appeal (Case No. 2024-2281). On September 17, 2024, Netlist moved to dismiss the Idaho State Court case for lack of personal jurisdiction and failure to state a claim, which the Idaho State Court denied on December 20, 2024. On June 27, 2025, the Idaho State Court granted Netlist’s motion to stay this case until the CAFC issues its opinion in the appeal of the IPR decisions involving the two patents. ​ On May 19, 2025, Netlist filed a complaint against Micron in the EDTX (Case No. 2:25-cv-00558) for infringement of ’087 Patent. On June 17, 2025, Micron moved to dismiss the complaint for improper venue. On June 27, 2025, the Court consolidated this case with the case against Samsung asserting the ’087 Patent (Case No. 2:25-cv-00557). On March 6, 2026, the Court granted Micron’s motion to dismiss (in the lead case) and transferred this case Micron to the DDE, which was assigned DDE case no. 1:26-cv-00246 on March 9, 2026. ​ On May 20, 2025, Micron filed a declaratory judgement action against Netlist in the DDE (Case No. 1:25-cv-00629) seeking a declaration that Micron does not infringe Netlist’s ’087 Patent. On June 11, 2025, Netlist filed a motion to dismiss or transfer this declaratory judgement action to the EDTX based upon its first-filed EDTX action asserting the ’087 Patent. 75 Table of Contents ​ On June 2, 2025, Micron filed a complaint against Netlist in Idaho State Court (Case No. CV01-25-09858), alleging that Netlist violated Idaho Code § 48-1703 by making a bad faith assertion of infringement of the ’060, ’160, ’506, ’339, ’912, and ’417 Patents in the EDTX, seeking compensatory and exemplary damages pursuant to Code §§ 48-1706(b) and (d), and costs and fees, including reasonable attorneys’ fees, pursuant to Code § 48-1706(c). On June 24, 2025, Netlist removed the case to the U.S. District Court for the District of Idaho. On July 1, 2025, Netlist moved to dismiss or to transfer the case to the EDTX. On July 17, 2025, Micron filed a motion to remand the case to the Idaho State Court. ​ On July 10, 2025, Micron filed a declaratory judgement action against Netlist in the DDE (Case No. 1:25-cv-00863) seeking a declaration that Micron does not infringe Netlist’s ’731 Patent. ​ On July 28, 2025, Netlist filed a complaint against Micron and Avnet in the EDTX (Case No. 2:25-cv-00749) for infringement of the ’366 Patent, seeking damages from the infringement by the defendants, a finding of willful infringement and enhanced damages pursuant to 35 U.S.C. § 284, an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285, a permanent injunction pursuant to 35 U.S.C. § 283, and equitable relief. On October 29, 2025, the Court consolidated this case with the case against Samsung and Avnet asserting the ’366 Patent (Case No. 2:25-cv-00748). ​ On July 29, 2025, Micron filed a declaratory judgement action against Netlist in the DDE (Case No. 1:25-cv-00942) seeking a declaration that Micron does not infringe Netlist’s ’366 Patent. ​ Google Litigation ​ On December 4, 2009, Netlist filed a complaint against Google, Inc. in the U.S. District Court for the Northern District of California (Case no. 3:09-cv-05718), for infringement of the ’912 Patent, seeking damages, a finding of willful infringement and enhanced damages pursuant to 35 U.S.C. § 284, an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285, and a preliminary and permanent injunction. On October 17, 2022, the Court entered a stipulated order to stay this case until the resolution of the patent infringement suit against Samsung filed on August 1, 2022 in EDTX (Case No. 2:22-cv-00293), including any appeal thereof. ​ Challenges to Netlist Patents at the USPTO and the PTAB ​ On October 15, 2021, SECL filed a Petition for IPR of the ’218 Patent (Case No. IPR2022-00062). On May 8, 2023, the PTAB issued a final written decision finding all challenged claims unpatentable. ​ On October 15, 2021, SECL filed a Petition for IPR of the ’523 Patent (Case No. IPR2022-00063). On May 3, 2023, the PTAB issued a final written decision finding no challenged claims unpatentable. On July 3, 2023, SECL filed a notice of appeal to the CAFC (Case No. 2023-2133). The CAFC heard oral arguments on March 4, 2025. On March 5, 2025, the CAFC affirmed the PTAB’s final written decision. ​ On October 15, 2021, SECL filed a Petition for IPR of the ’595 Patent (Case No. IPR2022-00064). On May 9, 2023, the PTAB issued a final written decision finding all challenged claims unpatentable. ​ On February 17, 2022, SECL filed a Petition for IPR of Claim 16 of the ’912 Patent (Case No. IPR2022-00615). On November 18, 2022, Micron also filed a Petition for IPR of Claim 16 of the ’912 Patent, IPR2023-00203. On April 17, 2024, the PTAB issued a final written decision in the two IPRs finding Claim 16 of the ’912 Patent unpatentable. On September 10, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2024-2304). The appeal is pending. ​ On March 2, 2022, SECL filed a Petition for IPR of the ’339 Patent (Case No. IPR2022-00639). On November 18, 2022, Micron also filed a Petition for IPR of the ’339 Patent (Case No. IPR2023-00204). On October 18, 2023, the PTAB issued a final written decision in the two IPRs finding all challenged claims 76 Table of Contents unpatentable. On April 11, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2024-1707). On January 21, 2026, the CAFC notified the parties that oral argument is set to take place on March 6, 2026. On March 6, 2026, the CAFC heard oral arguments on this appeal. The appeal is pending. ​ On March 22, 2022, SECL filed a Petition for IPR of the ’506 Patent (Case No. IPR2022-00711). On November 18, 2022, Micron also filed a Petition for IPR of the ’506 Patent (Case No. IPR2023-00205). On October 17, 2023, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On February 21, 2024, Netlist filed a notice of appeal to the CAFC, Case No. 2024-1521. The CAFC heard oral arguments on December 5, 2025. On December 9, 2025, the CAFC affirmed the PTAB’s final written decision. ​ On March 30, 2022, Micron filed two Petitions for IPR of the ’314 Patent (Case Nos. IPR2022-00744 and IPR2022-00745). On October 30, 2023, the PTAB issued final written decisions finding no challenged claims unpatentable. On December 29, 2023, Micron filed notices of appeal to the CAFC (Case Nos. 2024-1312 and 2024-1313). The appeals were consolidated on January 16, 2024. The CAFC heard oral arguments on December 1, 2025. On February 20, 2026, the CAFC affirmed the PTAB’s final written decisions. ​ On May 17, 2022, SECL filed a Petition for IPR of the ’918 Patent (Case No. IPR2022-00996). On January 6, 2023, Micron also filed a Petition for IPR of the ’918 Patent, Case No. IPR2023-00406. On December 6, 2023, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On May 20, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2024-1859). On January 21, 2026, the CAFC notified the parties that oral argument is set to take place on March 6, 2026. On March 6, 2026, the CAFC heard oral arguments on this appeal. The appeal is pending. ​ On May 17, 2022, SECL filed a Petition for IPR of the ’054 Patent (Case No. IPR2022-00999). On January 6, 2023, Micron also filed a Petition for IPR of the ’054 Patent (Case No. IPR2023-00405). On December 5, 2023, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On May 20, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2024-1863). On June 3, 2024, this appeal was consolidated with the above appeal on the IPR of the ’918 Patent (Case No. 2024-1859). ​ On August 26, 2022, SECL filed a Petition for IPR of the ’160 Patent (Case No. IPR2022-01427). On May 8, 2023, Micron also filed a Petition for IPR of the ’160 Patent, Case No. IPR2023-00883. On April 1, 2024, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On August 19, 2024, Netlist filed a notice of appeal to the CAFC, Case No. 2024-2240. On January 21, 2026, the CAFC notified the parties that oral argument is set on March 6, 2026. On March 6, 2026, the CAFC heard oral arguments on this appeal. The appeal is pending. ​ On August 26, 2022, SECL filed a Petition for IPR of the ’060 Patent (Case No. IPR2022-01428). On May 8, 2023, Micron also filed a Petition for IPR of the ’060 Patent (Case No. IPR2023-00882). On April 1, 2024, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On August 19, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2024-2241). On September 6, this appeal was consolidated with the above appeal on the IPR of the ’160 Patent (Case No. 2024-2240). ​ On January 10, 2023, SECL filed a Petition for IPR of the ’215 Patent, Case No. IPR2023-00455. On May 8, 2023, Micron also filed a Petition for IPR of the ’215 Patent (Case No. IPR 2023-01142). On July 30, 2024, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On December 10, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2025-1286). The appeal is pending. ​ On January 10, 2023, SECL filed a Petition for IPR of the ’417 Patent (Case No. IPR2023-00454). On May 8, 2023, Micron also filed a Petition for IPR of the ’417 Patent (Case No. IPR2023-01141). On July 30, 2024, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On December 10, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2025-1296). On January 15, 77 Table of Contents 2025, this appeal was consolidated with the above appeal on the IPR of the ’215 Patent (Case No. 2025-1286). ​ On April 27, 2023, SECL filed a Petition for IPR of the ’608 Patent (Case No. IPR2023-00847). On January 10, 2024, Micron also filed a Petition for IPR of the ’608 Patent (Case No. IPR2024-00370). On July 23, 2024, the PTAB denied institution of the IPR sought by Micron. On December 10, 2024, the PTAB issued a final written decision in the IPR brought by SECL finding no challenged claims unpatentable. On January 13, 2025, SECL filed a notice of appeal to the CAFC (Case No. 2025-1378). The CAFC heard oral arguments on December 5, 2025. On December 9, 2025, the CAFC affirmed the PTAB’s final written decision. ​ On October 18, 2024, SECL filed a Petition for IPR of the ’024 Patent (Case No. IPR2025-00001). On February 20, 2025, Netlist filed its preliminary response to the Petition. On May 15, 2025, the PTAB granted institution of the IPR. On May 29, 2025, Netlist requested director review of the institution decision, which was denied on July 17, 2025. On August 7, 2025, Netlist filed a statutory disclaimer and a request for adverse judgment. On September 8, 2025, the PTAB granted Netlist’s request for adverse judgment. ​ On October 24, 2024, SECL filed a Petition for IPR of the ’319 Patent (Case No. IPR2025-00002). On February 21, 2025, Netlist filed its preliminary response to the Petition. On May 15, 2025, the PTAB granted institution of the IPR. On May 29, 2025, Netlist requested director review of the institution decision, which was denied on July 17, 2025. On August 7, 2025, Netlist filed a statutory disclaimer and a request for adverse judgment. On September 8, 2025, the PTAB granted Netlist’s request for adverse judgment. ​ On August 14, 2025, an unidentified party filed a request for Ex Parte Reexamination of the ’608 Patent (Application No. 90/015,449). On October 17, 2025, Netlist filed a petition to the Director to terminate this reexamination. On November 5, 2025, the unidentified party opposed. On November 7, 2025, the request for reexamination was granted by the examiner. On January 6, 2026, Netlist filed a renewed petition to the Director to terminate this reexamination. On January 15, 2026, the unidentified party opposed. ​ On August 25, 2025, SECL filed a Petition for Post Grant Review (“PGR”) of the ’087 Patent (Case No. PGR2025-00071) and a Petition for IPR of the ’087 Patent (IPR2025-01402). On February 18, 2026, the PTAB denied institution of the IPR but granted institution of the PGR. On March 4, 2026, Netlist filed a Request for Director Review of the PGR institution decision. ​ On August 29, 2025, SECL filed a Petition for IPR of the ’731 Patent (IPR2025-01431). On February 18, 2026, the PTAB granted institution of the PGR. On March 4, 2026, Netlist filed a Request for Director Review of the institution decision. ​ On October 27, 2025, SECL filed a Petition for IPR of the ’035 Patent (IPR2026-00017). On February 24, 2026, the PTAB denied institution of the IPR. ​ On November 7, 2025, SECL filed a Petition for PGR of the ’366 Patent (Case No. PGR2026-00001) and a Petition for IPR of the ’366 Patent (IPR2026-00018). ​ German Proceedings ​ On March 31, 2022, Netlist filed infringement claims against Micron in Dusseldorf, Germany, seeking damages for infringement of European Patents EP 2,454,735 (“EP735”) and EP 3,404,660 (“EP660”). On September 1, 2022, Micron initiated nullity proceedings on the two patents in the German Federal Patent Court. On March 27, 2023, the Dusseldorf Court rescheduled the infringement hearing until April 11, 2024. On March 18, 2024, the Dusseldorf Court stayed the case until the German Federal Patent Court decisions on the nullity proceedings on EP735 and EP660 either become final or are reversed or remanded on appeal. ​ On June 3, 2022, Netlist filed infringement claims against Samsung in Dusseldorf, Germany, seeking damages for infringement of European Patents EP735 and EP660. On September 25, 2023, the Dusseldorf 78 Table of Contents Court stayed the case until the German Federal Patent Court decisions on the nullity proceedings on EP735 and EP660 either become final or are reversed or remanded on appeal. ​ On July 26, 2022, Netlist filed infringement claims against Google Cloud EMEA Limited, Google Germany GmbH, Redtec Computing GmbH, and Google LLC in Dusseldorf, Germany, seeking damages for infringement of European Patents EP735 and EP660. On March 18, 2024, the Dusseldorf Court stayed the case until the German Federal Patent Court decisions on the nullity proceedings on EP735 and EP660 either become final or are reversed or remanded on appeal. ​ In the nullity proceeding on EP735, the German Federal Patent Court issued its reasons of judgment revoking EP735 on April 18, 2024. Netlist filed an appeal on May 13, 2024. An oral hearing at the Federal Court of Justice is set for May 21, 2026. In the nullity proceeding on EP660, the German Federal Patent Court issued its reasons of judgment revoking EP660 on February 18, 2025. Netlist filed an appeal on March 12, 2025. ​ Other Contingent Obligations ​ In the ordinary course of our business, we have made certain indemnities, commitments and guarantees pursuant to which we may be required to make payments in relation to certain transactions. These may include, among others: (i) intellectual property indemnities to our customers and licensees in connection with the use, sale and/or license of our products; (ii) indemnities to vendors and service providers pertaining to claims based on our negligence or willful misconduct; (iii) indemnities involving the accuracy of representations and warranties in certain contracts; (iv) indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware; (v) indemnities pertaining to all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with transactions contemplated by applicable investment or loan documents, as applicable; (vi) severance and other related obligations; and (vii) indemnities or other claims related to certain real estate leases, under which we may be required to indemnify property owners for environmental and other liabilities or may face other claims arising from our use of the applicable premises. The duration of these indemnities, commitments and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential for future payments we could be obligated to make. Historically, we have not been obligated to make significant payments as a result of these obligations, and no liabilities have been recorded for these indemnities, commitments and guarantees in the accompanying consolidated balance sheets. ​ Note 8—Stockholders’ Equity ​ Serial Preferred Stock ​ Our authorized capital stock includes 10,000,000 shares of serial preferred stock, with a par value of $ 0.001 per share. No shares of preferred stock were outstanding as of December 27, 2025 or December 28, 2024. ​ On April 17, 2017, we entered into a rights agreement (as amended from time to time, the “Rights Agreement”) with Computershare Trust Company, N.A., as rights agent. In connection with the adoption of the Rights Agreement and pursuant to its terms, our board of directors authorized and declared a dividend of one right (each, a “Right”) for each outstanding share of our common stock to stockholders of record at the close of business on May 18, 2017 (the “Record Date”), and authorized the issuance of one Right for each share of our common stock issued by us (except as otherwise provided in the Rights Agreement) between the Record Date and the Distribution Date (as defined below). ​ On April 17, 2024, we entered into a fourth amendment (the “Fourth Amendment”) to the Rights Agreement, pursuant to which Equiniti Trust Company, LLC was appointed as our rights agent and the definition of “Expiration Date” in the Rights Agreement was amended to extend the term for an additional three-year period from April 17, 2024 to April 17, 2027. As a result, and pursuant to the Fourth Amendment, the Rights 79 Table of Contents will expire and become unexercisable on or before the close of business on April 17, 2027, in accordance with the terms of the Rights Agreement. ​ Each Right entitles the registered holder, subject to the terms of the Rights Agreement, to purchase from us, when exercisable and subject to adjustment, one unit consisting of one one -thousandth of a share (a “Unit”) of our Series A Preferred Stock (the “Preferred Stock”), at a purchase price of $ 6.56 per Unit, subject to adjustment. Subject to the provisions of the Rights Agreement, including certain exceptions specified therein, a distribution date for the Rights (the “Distribution Date”) will occur upon the earlier of (i) 10 business days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired or otherwise obtained beneficial ownership of 15 % or more of the then-outstanding shares of our common stock, and (ii) 10 business days (or such later date as may be determined by our board of directors) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person. The Rights are not exercisable until the Distribution Date and, unless earlier redeemed or exchanged by us pursuant to the terms of the Rights Agreement, as amended, will expire on the close of business on April 17, 2027. ​ In connection with the adoption of the Rights Agreement, our board of directors approved a Certificate of Designation of the Series A Preferred Stock (the “Certificate of Designation”) designating 1,000,000 shares of our serial preferred stock as Series A Preferred Stock and setting forth the rights, preferences and limitations of the Preferred Stock. We filed the Certificate of Designation with the Secretary of State of the State of Delaware on April 17, 2017. ​ Common Stock ​ On September 24, 2025, our stockholders approved the Certificate of Amendment to the Certificate of Incorporation to increase the number of shares of common stock authorized for issuance 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 of our common stock (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 $ 9.3 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. ​ The October 2025 Purchase Agreement also provided that we could 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 80 Table of Contents 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. ​ The October 2025 Warrants were accounted for as equity classified financial instruments as they meet the requirements for equity classification under ASC 815, Derivatives and Hedging . ​ 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 “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) Common Stock Purchase Warrants (the “June 2025 Warrants”) to purchase up to an aggregate of 34,285,720 shares of our common stock (the “June 2025 Warrant Shares”) at a combined purchase price of $ 0.70 per share and accompanying June 2025 Warrant. Mr. 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 $ 11.6 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 Combination Event and the lowest daily volume weighted average price of our 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 our common stock during such period. ​ The June 2025 Warrants were accounted for as equity classified financial instruments as they meet the requirements for equity classification under ASC 815, Derivatives and Hedging . ​ On October 6, 2025, we amended the June 2025 Warrants. Some of the purchasers pursuant to the October 2025 Purchase Agreement are also holders of the June 2025 Warrants and were purchasers pursuant a securities purchase agreement dated October 11, 2024 (the “October 2024 Purchase Agreement”). Pursuant to the terms of the October 2025 Purchase Agreement, these holders agreed to waive certain variable rate prohibitions and participation rights set forth in the October 2024 Purchase Agreement relating to the October 2025 Offering and to, among other things, revise certain anti-dilution provisions relating to the June 2025 Warrants in exchange for our reduction of the exercise price of the June 2025 Warrants to an exercise price equal to the lesser of $ 0.60 and the lowest VWAP of the shares of common stock on any trading day during the period commencing on October 6, 2025 and including, the fourth trading day immediately following October 7, 2025 (such waivers and amendments, collectively the “Waiver and Amendment”). Additionally, on October 6, 2025, the remaining holders of the June 2025 Warrants who are not party to the October 2025 Purchase Agreement also entered into waiver and amendment agreements, pursuant to which they agreed to the Waiver and Amendment. The adjusted exercise price of the June 2025 Warrants is now $ 0.60 . The June 2025 Warrants may be further adjusted for future dilutive issuances. In connection with the amendment of the June 2025 Warrants, we recorded a noncash deemed dividend of $ 0.6 million based on the excess of the fair 81 Table of Contents value of the June 2025 Warrants immediately before and after the amendment. Such noncash deemed dividend resulted in an increase in the net loss attributable to stockholders for the year ended December 27, 2025. ​ The June 2025 Purchase Agreement provided that we could 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. ​ 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, subject to the conditions and limitations set forth in the March 2025 Purchase Agreement. Concurrent with the execution of the March 2025 Purchase Agreement, we also entered into a registration rights agreement with Lincoln Park relating to the common stock to be sold to Lincoln Park. As consideration for entering into the March 2025 Purchase Agreement, we issued to Lincoln Park 1,123,023 shares of our common stock as initial commitment shares, which had an insignificant value upon grant, in a noncash transaction on March 13, 2025 and agreed to issue up to 1,123,023 additional shares of our common stock as additional commitment shares on a pro rata basis in connection with any additional purchases. ​ Pursuant to the March 2025 Purchase Agreement, on any business day and as often as every other business day over the 36-month term of the March 2025 Purchase Agreement, we have the right, from time to time, at our sole discretion and subject to certain conditions, to direct Lincoln Park to purchase up to 750,000 shares of our common stock, provided Lincoln Park’s obligation under any single such purchase will not exceed $ 3.0 million, unless we and Lincoln Park mutually agree to increase the maximum amount of such single regular purchase. If we direct Lincoln Park to purchase the maximum number of shares of common stock it then may sell in a regular purchase, then in addition to such regular purchase, and subject to certain conditions and limitations in the March 2025 Purchase Agreement, we may direct Lincoln Park to purchase an additional amount of common stock that may not exceed the lesser of (i) 300 % of the number of shares purchased pursuant to the corresponding regular purchase or (ii) 30 % of the total number of shares of our common stock traded during a specified period on the applicable purchase date as set forth in the March 2025 Purchase Agreement. Under certain circumstances and in accordance with the March 2025 Purchase Agreement, we may direct Lincoln Park to purchase shares in multiple accelerated purchases on the same trading day. ​ We control the timing and amount of any sales of our common stock to Lincoln Park. There is no upper limit on the price per share that Lincoln Park must pay for our common stock under the March 2025 Purchase Agreement, but in no event will shares be sold to Lincoln Park on a day the closing price is less than the floor price specified in the March 2025 Purchase Agreement. In all instances, we may not sell shares of our common stock to Lincoln Park under the March 2025 Purchase Agreement if that would result in Lincoln Park beneficially owning more than 9.99 % of its common stock. ​ The March 2025 Purchase Agreement does not limit our ability to raise capital from other sources at our sole discretion, except that, subject to certain exceptions, we may not enter into any Variable Rate Transaction (as defined in the March 2025 Purchase Agreement, including the issuance of any floating conversion rate or variable priced equity-like securities) during the 36 months after the date of the March 2025 Purchase Agreement. We have the right to terminate the March 2025 Purchase Agreement at any time, at no cost to us. ​ During the fiscal year ended, December 27, 2025, Lincoln Park purchased an aggregate of 1,496,009 shares of our common stock for a net purchase price of approximately $ 1.3 million under the March 2025 Purchase Agreement. 82 Table of Contents ​ We evaluated the March 2025 Purchase Agreement that includes the right to require Lincoln Park to purchase shares of our common stock in the future (“put right”) considering the guidance in ASC 815-40, Derivatives and Hedging – Contracts on an Entity’s Own Equity , and concluded that is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting as a derivative asset (liability). We have analyzed the terms of the put right and have concluded that it had insignificant value upon grant and as of December 27, 2025. ​ Warrants ​ Warrant activity during fiscal years 2025 and 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Number of ​ Average ​ ​ Shares ​ Exercise ​ ​ ​ ​ (in thousands) ​ ​ ​ Price Outstanding as of December 30, 2023 ​ ​ 11,111 ​ $ 3.20 Granted ​ ​ 27,273 ​ ​ 1.20 Exercised ​ ​ — ​ ​ — Expired ​ ​ — ​ ​ — Outstanding as of December 28, 2024 ​ ​ 38,384 ​ ​ 1.78 Granted ​ ​ 62,857 ​ ​ 0.65 Exercised ​ ​ — ​ ​ — Expired ​ ​ ( 13,636 ) ​ ​ 1.10 Outstanding as of December 27, 2025 ​ ​ 87,605 ​ $ 1.07 ​ During fiscal year 2025, in connection with the October 2025 Offering and June 2025 Offering, we issued warrants to purchase up to 28,571,432 and 34,285,720 shares of our common stock, respectively, with a weighted average exercise price of $ 0.65 . During fiscal year 2024, in connection with the 2024 Offering, we issued warrants to purchase up to 27,272,728 shares of our common stock with a weighted average exercise price of $ 1.20 . 13,636,364 of these warrants expired during fiscal year 2025. ​ ​ Note 9—Benefit Plans ​ Equity Incentive Plan ​ On September 9, 2025, our stockholders approved the Netlist, Inc. 2025 Equity Incentive Plan (the “2025 Plan”) at our 2025 Annual Meeting of Stockholders, pursuant to which (i) 2,500,000 shares of our common stock were reserved for issuance pursuant to the 2025 Plan and (ii) up to 4,721,706 shares of common stock may be added to the 2025 Plan attributable to awards granted under the Amended and Restated 2006 Equity Incentive Plan (the “Amended 2006 Plan”) that are forfeited, expire or are cancelled without delivery of shares of common stock or which result in the forfeiture of shares of common stock back to the Company on or after September 9, 2025. The Amended 2006 Plan was terminated on September 9, 2025. As of December 27, 2025, we had 26,500 shares of our common stock reserved for future issuance under the 2025 Plan and no shares of our common stock reserved for future issuance under the Amended 2006 Plan. Stock options granted under the 2025 Plan and the Amended 2006 Plan generally vest at a rate of at least 25 % per year over four years and expire 10 years from the grant date. RSUs granted for our employees and consultants generally vest in equal installments annually and fully vest over a four -year term from the grant date. We also periodically grant equity-based awards outside the 2025 Plan to certain new hires as an inducement to enter into employment with us. ​ 83 Table of Contents Stock Options ​ Stock options granted under the 2025 Plan generally vest at a rate of at least 25 % per year over four years and expire 10 years from the date of grant. The following table summarizes the activity related to stock options during fiscal year 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Remaining ​ Aggregate ​ ​ ​ Number of ​ Average ​ Contractual ​ Intrinsic ​ ​ ​ Shares ​ Exercise ​ Life ​ Value ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ Price ​ ​ ​ (in years) ​ ​ ​ (in thousands) ​ Outstanding as of December 28, 2024 ​ ​ 3,257 ​ $ 0.78 ​ ​ 3.89 ​ $ 468 ​ Granted ​ ​ - ​ $ - ​ ​ ​ ​ ​ ​ ​ Exercised ​ ​ ( 129 ) ​ $ 0.57 ​ ​ ​ ​ ​ ​ ​ Expired or forfeited ​ ​ ( 429 ) ​ $ 1.12 ​ ​ ​ ​ ​ ​ ​ Outstanding as of December 27, 2025 ​ ​ 2,699 ​ $ 0.73 ​ ​ 3.40 ​ $ 498 ​ Exercisable as of December 27, 2025 ​ ​ 2,699 ​ $ 0.73 ​ ​ 3.40 ​ $ 498 ​ Vested and expected to vest as of December 27, 2025 ​ ​ 2,699 ​ $ 0.73 ​ ​ 3.40 ​ $ 498 ​ ​ The total intrinsic value of stock options exercised during fiscal year 2025 was immaterial. The total intrinsic value of stock options exercised during fiscal year 2024 was $ 0.2 million. ​ Restricted Stock Units ​ RSUs granted for employees, consultants, and independent directors generally vest annually from the grant date over a four -year term. The following table summarizes the activity related to RSUs during fiscal year 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ Average ​ ​ Number of ​ Grant-Date ​ ​ Shares ​ Fair Value ​ ​ ​ ​ (in thousands) ​ ​ ​ per Share Balance nonvested as of December 28, 2024 ​ ​ 3,682 ​ $ 2.49 Granted ​ ​ 3,283 ​ $ 0.64 Vested ​ ​ ( 1,228 ) ​ $ 2.92 Forfeited ​ ​ ( 317 ) ​ $ 2.66 Balance nonvested as of December 27, 2025 ​ ​ 5,420 ​ $ 1.26 ​ Stock-Based Compensation ​ The following table summarizes the stock-based compensation expense by line item in the consolidated statements of operations (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 ​ Cost of sales ​ $ 83 ​ $ 99 ​ Research and development ​ ​ 552 ​ ​ 908 ​ Selling, general and administrative ​ ​ 2,803 ​ ​ 3,429 ​ Total ​ $ 3,438 ​ $ 4,436 ​ ​ 84 Table of Contents As of December 27, 2025, we had approximately $ 4.8 million, net of estimated forfeitures, of unearned stock-based compensation, which we expect to recognize over a weighted-average period of approximately 2.3 years. ​ 401(k) Plan ​ We have a defined contribution plan under Section 401(k) of the Code (“401(k)”) covering full-time domestic employees who meet certain eligibility requirements. Under the 401(k) plan, eligible employees may contribute up to 100% of their eligible compensation on either a pre-tax or after-tax Roth 401(k) basis, or up to the annual maximum allowed by the IRS. We may make matching contributions on the contributions of a participant on a discretionary basis. During fiscal years 2025 and 2024, our matching contributions totaled $ 0.1 million and $ 0.1 million, respectively. ​ ​ Note 10—Major Customers, Suppliers and Products ​ Our net product sales have historically been concentrated in a small number of customers. The following table sets forth the percentage of net product sales made to customers that each comprise 10% or more of total net product sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 Customer A ​ 30 % ​ 37 % Customer B ​ * ​ 20 % Customer C ​ 13 % ​ * ​ * Less than 10 % of total net product sales ​ As of December 27, 2025, four customers represented approximately 33 % , 19 % , 14 % and 11 % , respectively, of aggregate gross accounts receivable. As of December 28, 2024, three customers represented approximately 25 % , 11 % , and 10 % , respectively, of aggregate gross accounts receivable. The loss of any of our significant customers or a reduction in sales to, or difficulties collecting payments from, any of these customers could significantly reduce our net product sales and adversely affect our operating results. We mitigate risks associated with foreign receivables by purchasing comprehensive foreign credit insurance. We resell certain component products to end-customers that are not reached in the distribution models of the component manufacturers, including storage customers, appliance customers, system builders and cloud and datacenter customers. For fiscal years 2025 and 2024, resales of these products represented approximately 95 % and 92 % , respectively, of our net product sales. ​ Our purchases are typically concentrated in a small number of suppliers. The following table shows the percentage of purchases made from supplier(s) that each comprise 10% or more of total purchases: ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ 2024 Supplier A ​ 92 % ​ 93 % ​ While we believe alternative suppliers may be available, our dependence on a small number of suppliers and the lack of any guaranteed sources for the essential components of our products and the components we resell exposes us to several risks, including the inability to obtain an adequate supply of these components, increases in their costs, delivery delays and poor quality. If we cannot obtain these components in the amounts needed on a timely basis and at commercially reasonable prices, we may not be able to develop or introduce new products, we may experience significant increases in our cost of sales if we are forced to procure components from alternative suppliers and are not able to negotiate favorable terms with these suppliers, we may experience interruptions or failures in the delivery of our products, or we may be forced to cease sales of products dependent on the components or resales of the components we resell to customers directly. Any of these events could have a material adverse effect on our business, operating results and financial condition. 85 Table of Contents ​ Note 11—Subsequent Events ​ Amendment to Lease ​ On March 4, 2026, we entered into a First Amendment to Lease (the “Lease Amendment”) with University Research Park LLC (the “Landlord”), pursuant to which we and the Landlord agreed to renew the Company’s existing lease dated April 28, 2021 (the “Lease”), relating to our corporate headquarter located at 111 Academy, Suite 100, Irvine, CA 92617. ​ The Lease Amendment extends the current term of the Lease to December 31, 2029 with no renewal option. The annual base rent starting on January 1, 2027 will be $ 27,396.65 per month and increases by approximately 3 % each lease year. ​ Warrant Exercise ​ Since December 27, 2025, the holders of June 2025 Warrants to purchase 8,572,430 shares of common stock were exercised in cash, resulting in approximately $ 5.1 million in gross cash proceeds to the Company and the issuance of 8,572,430 shares of common stock. ​ 86 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the Stockholders and the Board of Directors Netlist, Inc. Irvine, California ​ Opinion on the Consolidated Financial Statements ​ We have audited the accompanying consolidated balance sheets of Netlist, Inc. and subsidiaries (the “Company”) as of December 27, 2025 and December 28, 2024, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended, the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 27, 2025 and December 28, 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. ​ Basis for Opinion ​ These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. ​ Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ Critical Audit Matters ​ Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. We determined that there are no critical audit matters. ​ We have served as the Company's auditor since 2024. ​ /s/ Macias Gini & O’Connell LLP ​ Irvine, California March 19, 2026 87 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ​ None. ​