What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-13 compared with 2024-11-07 · 382 added, 360 removed, 269 unchanged (73% of the section changed)

4 unchanged sentences

(In thousands, except par value) (Unaudited)

September 28,

Current assets:

13 unchanged sentences

Other current liabilities

Debt due within one year

Total current liabilities

20 unchanged sentences

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Cost of sales

29 unchanged sentences

Balance, March 29, 2025

Issuance of common stock, net

Exercise of stock options

Stock-based compensation

Restricted stock units vested and distributed

Balance, June 29, 2024

Exercise of stock options

Stock-based compensation

Restricted stock units vested and distributed

Balance, September 28, 2024

See accompanying Notes to the Condensed Consolidated Financial Statements.

NETLIST, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands) (Unaudited) (Continued)

Stockholders'

2 unchanged sentences

Exercise of stock options

Exercise of warrants

Stock-based compensation

Restricted stock units vested and distributed

Balance, April 1, 2023

Issuance of common stock, net

Exercise of stock options

Stock-based compensation

Restricted stock units vested and distributed

Balance, July 1, 2023

Issuance of common stock, net

Exercise of stock options

Stock-based compensation

Restricted stock units vested and distributed

Balance, September 30, 2023

Tax withholdings related to net share settlements of equity awards

Balance, March 30, 2024

See accompanying Notes to the Condensed Consolidated Financial Statements.

3 unchanged sentences

(In thousands) (Unaudited)

Nine Months Ended

September 28,

September 30,

Three Months Ended

Cash flows from operating activities:

2 unchanged sentences

Non-cash lease expense

Gain on forgiveness of payables

Stock-based compensation

11 unchanged sentences

Cash flows from financing activities:

Net repayments under line of credit

Net borrowings under line of credit

Principal repayments under finance lease

1 unchanged sentence

Proceeds from issuance of common stock, net

Proceeds from exercise of stock options and warrants

Proceeds from exercise of stock options

Payments for taxes related to net share settlement of equity awards

Net cash provided by financing activities

Effect of foreign exchange rates on cash, cash equivalents and restricted cash

Net change in cash, cash equivalents and restricted cash

14 unchanged sentences

GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 30, 2023, included in our Annual Report on Form 10-K filed with the SEC on February 23, 2024.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto as of and for the year ended December 28, 2024, included in our Annual Report on Form 10-K filed with the SEC on March 28, 2025.

In the opinion of management, all adjustments for the fair presentation of our condensed consolidated financial statements have been made.

1 unchanged sentence

The results of operations for the interim periods are not necessarily indicative of the results to be expected for other periods or the full fiscal year.

We have evaluated events occurring subsequent to September 28, 2024 through the filing date of this Quarterly Report on Form 10-Q and concluded that there were no events that required recognition and disclosures other than those discussed elsewhere in the notes hereto.

We have evaluated events occurring subsequent to March 29, 2025 through the filing date of this Quarterly Report on Form 10-Q and concluded that there were no events that required recognition and disclosures other than those discussed elsewhere in the notes hereto.

Principles of Consolidation

9 unchanged sentences

GAAP requires management to make estimates and assumptions that affect the amounts reported.

Significant items subject to such estimates and assumptions made by management include, but not limited to, the determination of inventory reserves, allowance for doubtful accounts, and the discount rate used for lease obligation.

Significant items subject to such estimates and assumptions made by management include, but not limited to,

the determination of inventory reserves, allowance for doubtful accounts, and the discount rate used for lease obligation.

Actual results may differ materially from those estimates.

We incurred net loss of $ 9.5 million for the three months ended March 29, 2025 and $ 17.0 million for the three months ended March 30, 2024.

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

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

We have also funded our operations with a revolving line of credit under a bank credit facility with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (“SVB”), proceeds raised from the 2024 Offering (as defined below) and funds raised through the March 2025 Purchase Agreement (as defined below) (see Notes 3 and 7).

March 2025 Lincoln Park Purchase Agreement

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

As of March 29, 2025, $ 74.1 million remains available under the March 2025 Purchase Agreement with Lincoln Park (see Note 7).

2024 Offering

On October 11, 2024, we entered into a Securities Purchase Agreement (the “2024 Purchase Agreement”) with certain investors, pursuant to which we issued and sold to the investors in a registered offering (the “2024 Offering”) an aggregate of (i) 13,636,364 shares of our common stock, (ii) Series A Common Stock Purchase Warrants (the “Series A Warrants”) to purchase up to an aggregate of 13,636,364 shares of our common stock, at a purchase price of $ 1.30 per share, and (iii) Series B Common Stock Purchase Warrants (the “Series B Warrants,” and together with the Series A Warrants, the “Warrants”) to purchase up to 13,636,364 shares of our common stock, at a per share purchase price of $ 1.10 per share and accompanying warrants.

The 2024 Offering closed on October 15, 2024.

The net proceeds to us from the 2024 Offering were approximately $ 14.2 million, after deducting placement agent fees and offering costs paid by us (see Note 7).

Inadequate working capital would have a material adverse effect on our business and operations and could cause us to fail to execute our business plan, fail to take advantage of future opportunities or fail to respond to competitive pressures or customer requirements.

A lack of sufficient funding may also require us to significantly modify our business model and/or reduce or cease our operations, which could include implementing cost-cutting measures or delaying, scaling back or eliminating some or all of our ongoing and planned investments in corporate infrastructure, research and development projects, business development initiatives and sales and marketing activities, among other activities.

While our estimates of our operating revenues and expenses and working capital requirements could be incorrect and we may use our cash resources faster than we anticipate, management believes our existing balance of cash and cash equivalents together with the Strategic Agreement with SK hynix, proceeds from issuances of debt and equity securities, including our equity line with Lincoln Park (see Note 7), cash receipts from revenues, borrowing availability under the 2023 SVB Credit Agreement (see Note 3), and funds raised through future equity offerings, will be sufficient to meet our anticipated cash needs for at least the next 12 months.

Recently Issued Accounting Standards

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosure,

which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

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

We adopted this guidance on December 28, 2024.

The adoption only impacted our disclosure and has no material impact on the Company’s condensed consolidated financial statements as of and for the quarter ended March 29, 2025.

In November 2024, the FASB issued 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 will adopt this ASU using either a prospective or retrospective transition method.

We are currently evaluating the impact of adopting this ASU.

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):

Three Months Ended

Employee Compensation (1)

Stock Based Compensation

Program Expenses (2)

Professional Fees (3)

(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.

Note 2—Supplemental Financial Information

Inventories consisted of the following (in thousands):

September 28,

Raw materials

1 unchanged sentence

Finished goods

Cash Flow Information

The following table shows supplemental disclosures of cash flow information and non-cash financing activities (in thousands):

Three Months Ended

Supplemental disclosure of cash flow information:

Cash paid during the year for:

Supplemental disclosure of non-cash investing and financing activities:

Debt financing of insurance

Loss Per Share

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Weighted-average basic shares outstanding - basic and diluted

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Weighted average common share equivalents

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Resales of third-party products

1 unchanged sentence

Total net sales

Total net sales include $ 17.6 million of revenue recognized in the three months ended September 28, 2024

that was included in deferred revenue as of June 29, 2024.

No deferred revenue was recorded prior to June 29, 2024.

As of September 28, 2024, we had deferred revenue of $ 5.9 million.

Net product sales by country presented below are based on the billing location of the customer (in thousands):

Three Months Ended

United States

People's Republic of China (1)

Other countries

Total net sales

People’s Republic of China (“PRC”) includes Hong Kong and Taiwan.

The PRC accounted for more than 10 % of our net product sales for the three months ended March 29, 2025.

The United States and the PRC accounted for more than 10 % of our net product sales for the three months ended March 30, 2024.

As of March 29, 2025, we had deferred revenue of $ 1.6 million.

These deferred revenues relate to advance payments received during the quarter on orders shipped subsequent to the end of quarter.

Major Customers and Products

Major Customers, Suppliers and Products

Our net product sales have historically been concentrated in a small number of customers.

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Less than 10% of net sales during the period.

As of September 28, 2024, two customers represented approximately 33 % and 14 % of aggregated gross accounts receivables, respectively.

As of December 30, 2023, two customers represented approximately 60 % and 10 % , respectively, of aggregate gross accounts receivables.

As of March 29, 2025 five customers represented approximately 14 % , 14 % , 14 % , 11 % and 10 % of aggregated gross accounts receivables, respectively.

As of December 28, 2024, three customers represented approximately 25 % , 11 % , and 10 % , respectively, of aggregate gross accounts receivables.

The loss of a major customer or a reduction in sales to or difficulties collecting payments from these customers could significantly reduce our net sales and adversely affect its operating results.

1 unchanged sentence

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 the three and nine months ended September 28, 2024, resales of these products represented approximately 94 % and 91 % of net sales, respectively.

For both the three and nine months ended September 30, 2023, resales of these products each represented approximately 82 % of net sales.

For the three months ended March 29, 2025 and March 30, 2024, resales of these products represented approximately 95 % and 87 % of net sales, respectively.

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:

Three Months Ended

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.

Note 3—Financing Arrangements

On November 7, 2023, we entered into a loan and security agreement (the “2023 SVB Credit Agreement”) with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (“SVB”), which provides for a revolving line of credit up to $ 10.0 million.

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

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

Borrowings accrue interest on advance at a per annum rate equal to the greater of 8.50 % and the Prime Rate.

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

The maturity date is November 7, 2025.

As of September 28, 2024, all obligations under the 2023 SVB Credit Agreement were secured by a first priority security interest in our tangible and intangible assets.

As of March 29, 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 September 28, 2024, we were in compliance with our covenants under the 2023 SVB Credit Agreement.

As of March 29, 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 condensed consolidated balance sheets.

As of September 28, 2024 and December 30, 2023, (i) outstanding letters of credit were $ 12.4 million and $ 12.4 million, respectively, (ii) outstanding borrowings were $ 1.6 million and $ 3.8 million, respectively, and (iii) availability under the revolving line of credit was $ 0 and $ 0 , respectively.

As of March 29, 2025 and December 28, 2024, (i) outstanding letters of credit were $ 10.9 million and $ 11.9 million, respectively, (ii) outstanding borrowings were $ 1.6 million and $ 1.2 million, respectively, and (iii) availability under the revolving line of credit was $ 0 and $ 0 , respectively.

Our debt consisted of the following (in thousands):

Notes payable

amounts due within one year

Long-term debt

Insurance Policy Finance Agreement

As of March 29, 2025 and December 28, 2024, we had $ 0.4 million and $ 0 , respectively, in short-term notes payable for the financing of insurance policies.

On January 17, 2025, we entered into a short-term note payable for $ 0.5 million bearing interest at 7.31 % to finance insurance policies.

Principal and interest payments on this note began on January 15, 2025 and are made evenly based on a straight line amortization over a 9-month period.

Note 5—Leases

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Operating lease cost

1 unchanged sentence

Operating cash flows from operating leases

For the nine months ended September 28, 2024 and September 30, 2023, finance lease costs and cash flows from finance leases were immaterial.

For the three months ended March 29, 2025 and March 30, 2024, finance lease costs and cash flows from finance leases were immaterial.

Supplemental condensed consolidated balance sheet information related to leases was as follows (in thousands):

September 28,

Operating Leases

11 unchanged sentences

The following table includes supplemental information:

September 28,

Weighted Average Remaining Lease Term (in years)

4 unchanged sentences

Finance leases

Maturities of lease liabilities as of September 28, 2024, were as follows (in thousands):

2024 (remainder of the year)

Maturities of lease liabilities as of March 29, 2025, were as follows (in thousands):

Total lease payments

4 unchanged sentences

These law firms may be 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 Patent Reexaminations

Litigation and Inter Partes Reviews

We are, from time to time, a party to litigation that arises in the normal course of our business operations.

2 unchanged sentences

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 U.S.

Patent and Trademark Office (“USPTO”) and Patent Trial and Appeal Board (“PTAB” or the “Board”).

Patent and Trademark Office and Patent Trial & Appeal Board (“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.

2 unchanged sentences

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 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.

Google Litigations

On December 4, 2009, Netlist filed a patent infringement lawsuit against Google Inc.

(“Google”) in the U.S.

District Court for the Northern District of California (the “NDCA”), seeking damages and injunctive relief based on Google’s alleged infringement of our U.S.

7,619,912 (the “‘912 Patent”).

The current judge assigned to the case, Hon.

Chief Judge Seeborg, entered an order via stipulation on October 17, 2022 staying the NDCA Google case until the resolution of a pending case filed by Netlist, Inc.

against Samsung Electronics Co., Ltd.

(“SECL”), Samsung Semiconductor Inc.

(“SSI”), and Samsung Electronics America Inc.

(collectively, “Samsung”) in the United States District Court for the Eastern District of Texas (“EDTX”) ( Netlist, Inc.

Samsung Elecs.

2:22-cv-00293-JRG).

On July 26, 2022, Netlist filed patent infringement claims against Google Cloud EMEA Limited, Google Germany GmbH, Redtec Computing GmbH, and Google LLC (the “German Google Defendants”), seeking damages based on those defendants’ infringement of European Patents EP 2,454,735 (“EP735”) and EP 3,404,660 (“EP660”), which both generally relate to load reduced dual in line memory modules (“LRDIMM”) technologies.

As of the reporting date, the German Google Defendants have submitted statements of defense.

As of the reporting date, the German Federal patent Court has issued its order finding the EP735 null, and the proceedings before the Dusseldorf Court are currently stayed pending the outcome of the nullity reviews of the asserted EP patents.

On October 15, 2021, SECL and SSI initiated a declaratory judgement action against Netlist in the U.S.

District Court for the District of Delaware (“DDE”) ( Samsung Elecs.

Co., Ltd., et.

Netlist, Inc.

1:21-cv-01453-RGA).

On September 12, 2022, Netlist amended its Counterclaims to include counterclaims against Google LLC and Alphabet, Inc (together, “Google Delaware Defendants”).

On November 15, 2022, the Google Delaware Defendants responded to Netlist’s Counterclaims by filing a Motion to Dismiss or alternatively to sever and stay the counterclaims.

As of the reporting date, the Court heard oral arguments for the Google Delaware Defendants’ Motion to Dismiss or alternatively, Sever and Stay and Dismiss Willfulness and Indirect Infringement Allegations.

On October 10, 2023, the DDE Court entered an order granting-in-part and denying-in-part SECL and SSI’s prior motion to stay the matter in light of pending Inter Partes Reviews (“IPRs”) and a Ninth Circuit appeal, in effect staying claims with respect to Netlist’s U.S.

9,858,218 (the “‘218 Patent”) and 10,474,595 (the “‘595 Patent”), while allowing claims under Netlist’s U.S.

10,217,523 (the “‘523 Patent”) to proceed.

On October 20, 2023, the Court held a claim construction hearing involving all parties.

As part of the hearing, the Court also sought feedback from parties as to the issue of whether the matter should be stayed pending review of the Ninth Circuit’s recent unpublished decision on the underlying Central District of California action.

On December 1, 2023, the Court entered an Oral Order staying the matter until the development of any action by any other court pertaining to Samsung’s and Netlist’s rights under the JDLA that may merit lifting the stay.

As of the reporting date, the case remains stayed.

Micron Litigations

On April 28, 2021, Netlist filed a complaint for patent infringement against Micron Technology, Inc.

(“Micron”) in the U.S.

District Court for the Western District of Texas (“WDTX”), Waco Division (Case No.

6:21-cv00431 & Case No.

6:21-cv-00430).

These proceedings are based on the alleged infringement by Micron’s LRDIMM and Micron’s non-volatile dual in line memory modules (“NVDIMM”) enterprise memory modules under four U.S.

patents – U.S.

10,489,314 (the “‘314 Patent”), 9,824,035 (the “‘035 Patent”), 10,268,608 (the “‘608 Patent”), and 8,301,833 (the “‘833 Patent”).

The consolidated case was assigned to Hon.

Judge Lee Yeakel (new Case No.

1:22-cv-00134, and 1:22-cv-00136), and the parties have completed briefing on their claim construction arguments.

On May 11, 2022, Judge Yeakel entered a stay of the case pending the resolution of Micron’s requested IPR proceedings against the four patents asserted by Netlist in these consolidated cases (the ‘833, ‘035, ‘608, and ‘314 Patents).

On May 4, 2023, the consolidated cases were reassigned to Docket II in the WDTX Austin Division, given Hon.

Judge Yeakel’s retirement.

On February 21, 2024, the parties have filed a status report with Austin District Court Judge Robert Pitman.

On April 19, 2024, Netlist filed a motion to transfer the matter to the Eastern District of Texas, Marshall Division.

This motion was denied, and the matter remains assigned to Judicial Docket II of the WDTX, Austin Division Court.

As noted above, Micron filed requests to bring IPR proceedings against Netlist’s ‘314, ‘035, ‘608, and ‘833 Patents.

The PTAB granted Micron’s request for the ‘035, ‘833, and ‘314 Patents, but denied its request for instituting an IPR of the ‘608 Patent.

The PTAB further denied Micron’s request for rehearing on the ‘608 Patent’s institution denial.

Oral arguments were presented for the ‘035 Patent IPR on April 19, 2023, with the PTAB finding claims 2, 6, and 22 of the ‘035 Patent not unpatentable.

On August 28, 2023, the PTAB determined that all challenged claims of the ‘833 Patent were unpatentable.

On October 30, 2023, the PTAB determined that all challenged claims of the ‘314 Patent were not unpatentable.

On December 29, 2023,

Micron filed a Notice of Appeal for the ‘314 Patent IPR decisions, indicating its intent to challenge the PTAB’s findings at the United States Court of Appeals for the Federal Circuit.

On March 31, 2022, Netlist filed patent infringement claims against Micron in Dusseldorf, Germany (“Micron Dusseldorf Action”), seeking damages based on their infringement of EP735 and EP660.

On June 24, 2022, Netlist requested injunctive relief.

Micron initiated a nullity proceeding against the asserted EP patents in this action, making Netlist’s response to the same as November 19, 2022.

Primary briefing in the Micron Dusseldorf Action has concluded, while the German Federal Patent Court entered a preliminary opinion on EP735 and EP660 in a related invalidity proceedings that have been consolidated as of the reporting date.

As of the reporting date, the German Federal Patent Court has issued its order finding the EP735 null, and the Micron Dusseldorf Action has been stayed pending the outcome of the nullity reviews of the asserted EP patents.

The Federal Patent Court has scheduled a hearing for EP660 on November 7, 2024.

On June 10, 2022, Netlist filed a complaint for patent infringement against Micron in the EDTX, Marshall Division (Case No.

2:22-cv-00203-JRG-RSP).

These proceedings are based on the alleged infringement by Micron for the sale of its LRDIMMs, its memory modules utilizing on-board power management (“PMIC”), and its high bandwidth memory (“HBM”) components, under six U.S.

Netlist patents:

8,787,060 (the “‘060 Patent”), 9,318,160 (the “‘160 Patent), 10,860,506 (the “‘506 Patent”), 10,949,339 (the “‘339 Patent”), 11,016,918 (the “‘918 Patent”), and 11,232,054 (the “‘054 Patent”).

The claim construction hearing took place before Hon.

Magistrate Judge Roy Payne on July 26, 2023, and on October 30, 3023 the Court entered an Order confirming the Claim Construction outcome.

The Jury Trial was initially scheduled to begin on January 22, 2024, but as of the reporting date, the Court has stayed the matter.

On August 1, 2022, Netlist filed a complaint for patent infringement against Micron in the EDTX (Case No.

2:22-cv-00294) under the ‘912 Patent, for Micron’s alleged infringement by the sale of its LRDIMMs and RDIMMs.

On August 15, 2022, Netlist filed its first amended complaint, further addressing Micron’s infringement of U.S.

9,858,215 (the “‘215 Patent”) and 11,093,417 (the “‘417 Patent”).

On October 21, 2022, Hon.

Chief Judge Gilstrap ordered that this Micron action and a parallel action by Netlist against defendants Samsung on the same patents (Case No.

2:22-cv-00293-JRG) be consolidated and set for a joint scheduling conference on November 17, 2022, further instructing that the Samsung action be considered the “LEAD CASE” and that any further filings from either action be submitted in that case for all pretrial matters.

The claim construction hearing was advanced and took place before Hon.

Chief Judge Gilstrap on September 26, 2023.

On November 21, 2023, the Court entered its Claim Construction Order.

The Court held the final pretrial conference for the consolidated case on March 6, 2024.

This case went to trial in May 2024 and the jury awarded Netlist $445 million for Micron’s infringement.

On November 18, 2022, Micron filed IPR requests contesting the patentability of the ‘912, ‘339, and ‘506 Patents, along with motions requesting joinder to the pending Samsung IPRs related to the same patents (see below).

As of the reporting date, Micron’s ‘912, ‘339, and ‘506 Patent IPRs have been joined with the respective Samsung IPR proceedings for the same three patents.

Oral hearings for the joined Samsung ‘339 and ‘506 Patents IPRs were held on July 19, 2023 and July 20, 2023, respectively.

On June 30, 2023, the PTAB resumed the trial on the Samsung ‘912 Patent IPR (which included Micron’s claims via joinder) following USPTO Director Katherine Vidal’s sua sponte Director Review and scheduled the ‘912 Patent IPR for an oral hearing on January 31, 2024.

On October 17, 2023 and October 18, 2023, the PTAB issued final written decisions stating that all challenged claims of the ‘506 and ‘339 Patents were unpatentable, respectively.

Netlist filed Requests for Rehearing of the ‘506 and ‘339 Patent IPRs final written decisions on November 16, 2023 and November 17, 2023, respectively.

On December 20, 2023, the Board denied Netlist’s Request for Rehearing on the ‘506 Patent IPR result.

Netlist filed a Notice of Appeal to challenge the Board’s final written decision on the ‘506 Patent before the Federal Court of Appeals for the Federal Circuit (“CAFC”), Case No.

On February 9, 2024, the PTAB denied Netlist’s Request for Rehearing on the ‘339 Patent IPR result.

Netlist filed its Notice of Appeal to challenge the Board’s final written decision on the ‘339 Patent before the CAFC, Case No.

On January 31, 2024, an oral hearing was conducted for the Samsung ‘912 Patent IPR proceeding joined by Micron.

On April 17, 2024, the PTAB entered its final written decision for the ‘912 Patent IPR, finding the challenged claim 16 unpatentable.

On September 11, 2024,

Netlist filed a Notice of Appeal to challenge the Board’s final written decision on the ’912 Patent before the CAFC, Case No.

As of the reporting date, all three appeals challenging the Board’s respective decisions on the ’912, ’339, and ’506 Patents are pending.

On January 6, 2023, Micron filed IPR requests contesting the patentability of the ‘918 and ‘054 Patents, along with motions requesting joinder to the pending Samsung IPRs related to the same patents (see below).

On June 23, 2023, the matters were joined with the corresponding Samsung IPRs on the same patents.

On September 5, 2023, oral hearings for the ‘918 and ‘054 Patent IPRs were held.

On December 5, 2023 and December 6, 2023, the PTAB entered final written decisions for the ‘918 and ‘054 Patent IPRs, respectively, finding in both instances that all challenged claims were unpatentable.

On January 5, 2024 and January 6, 2024, Netlist filed requests for USPTO Director Review of the ‘918 and ‘054 Patents final written decisions, respectively.

On March 18, 2024, the USPTO denied Netlist’s request for Director Review of the ‘918 and ‘054 Patent IPRs.

On May 24, 2024, Netlist filed a notice of appeal challenging the Board’s final written decision for the ‘918 and ‘054 Patent IPRs, CAFC case no.

On May 8, 2023, Micron filed IPR requests contesting the patentability of the ‘060 and ‘160 Patents, along with motions requesting joinder to the pending Samsung IPRs related to the same patents (see below).

On October 26, 2023, the PTAB instituted the Micron ‘060 and ‘160 Patent IPRs and joined them with the earlier-filed ‘060 and ‘160 Patent IPRs.

An oral hearing was held on January 11, 2024, and on April 1, 2024, the PTAB issued its final written decisions finding all challenged claims of the ‘060 and ‘160 Patents unpatentable.

On May 1, 2024, Netlist requested a director review of the final written decisions.

The Director Review was denied on June 17, 2024.

On August 20, 2024, Netlist a Notice of Appeal to challenge the Board’s final written decision on the ’060 and ’160 Patents before the CAFC, Case No.

On July 28, 2023, Micron filed two IPR petitions contesting the patentability of the ‘215 and ‘417 Patents.

On January 3, 2024, the PTAB granted institution and joinder to Samsung’s earlier-filed IPRs for the same two patents.

The parties completed briefing on the Samsung ‘417 and ‘215 Patent IPRs that Micron had joined and held oral arguments on May 3, 2024.

The PTAB issued its final written decision on July 30, 2024, determining all challenged claims unpatentable.

On August 29, 2024, Netlist filed Requests for Director Review of the Board’s final written decisions on the ’215 and ’417 Patents.

On December 11, 2023, Micron filed a complaint in the District Court for the Fourth Judicial District of the State of Idaho alleging Netlist violated Idaho Code § 48-1703 through its assertion of the ‘833 Patent in the WDTX (the “First Idaho Complaint”).

Netlist removed the matter to the Federal District Court for the District of Idaho on January 2, 2024.

On January 18, 2024, the matter was assigned to Judge David C.

Nye for all proceedings, and Micron filed a Motion to remand the case to the Idaho state court.

On February 7, 2024, Netlist moved to dismiss Micron’s First Idaho Complaint or alternatively transfer the case, and on February 8, 2024, responded to Micron’s Motion to Remand.

On February 22, 2024, Micron filed its reply in support of its remand motion.

On February 28, 2024, Micron filed its response to Netlist’s Motion to Dismiss or Transfer the case.

On March 13, 2024, Netlist filed its reply in support of its Motion to Dismiss or Transfer the case.

On August 16, 2024, the case was remanded to the Idaho state court.

On September 17-18, 2024, Netlist filed a motion to dismiss the case for lack of personal jurisdiction and failure to state a claim.

On December 22, 2023, Netlist filed a Declaratory Judgment action in the Federal District Court for the EDTX, Marshall Division, seeking confirmation from the Court that Netlist has not made a bad-faith assertion of patent infringement against Micron.

On January 19, 2024, Micron filed a Motion to Dismiss.

On February 7, 2024, Netlist amended its complaint, and on March 6, 2024, Micron filed its Answer to Netlist’s First Amended Complaint.

On April 23, 2024, the Court held a scheduling conference, and on April 24, 2024, the Court entered its docket control order setting the matter for a jury trial on July 7, 2025.

On January 10, 2024, Micron filed an IPR petition, again contesting the patentability of the ‘608 Patent, along with a motion to join Samsung’s instituted parallel IPR proceeding.

On July 23, 2024, the PTAB denied institution of Micron’s petition.

On January 16, 2024, Micron filed a second complaint in the District Court for the Fourth Judicial District of the State of Idaho alleging Netlist violated Idaho Code § 48-1703, this time for Netlist’s assertion of the ‘918 and ‘054 Patents in the EDTX.

On February 9, 2024, Netlist removed the matter from State Court to the Federal District Court for the District of Idaho.

The removed case has been assigned to Judge David C.

On February 16, 2024, Netlist filed a Motion to Dismiss or in the Alternative Transfer the case.

Micron filed its opposition to Netlist’s Motion to Transfer on March 8, 2024.

On March 11, 2024, Micron filed a Motion to Remand the case.

As of the reporting date, the Court has not yet ruled on these motions.

Samsung Litigations

On May 28, 2020, Netlist filed a complaint against Samsung in the U.S.

District Court for the Central District of California for Samsung’s breach of the parties’ Joint Development and License Agreement (“JDLA”).

On July 22, 2020, Netlist amended its complaint to seek a declaratory judgment that it properly terminated the JDLA in light of Samsung’s material breaches.

On October 14, 2021, the Court entered summary judgment in Netlist’s favor and confirmed Netlist properly terminated the JDLA as of July 15, 2020.

On February 15, 2022, the Court entered a final judgment in favor of Netlist on each of its three claims and confirmed that the licenses granted by Netlist under the JDLA were terminated.

On February 25, 2022, Samsung filed a Notice of Appeal, and the Federal Court of Appeals for the Ninth Circuit Court of Appeals issued a Time Schedule Order on February 28, 2022.

On August 4, 2022, Netlist filed a cross-appeal seeking the Appeal Court’s reconsideration of the District Court’s finding that the fees Netlist paid to Samil PricewaterhouseCoopers were consequential damages, rather than recoverable general damages.

On June 8, 2023, the Ninth Circuit Court of Appeals heard oral arguments from both parties on the matter following completion of all briefing.

On October 17, 2023, the Ninth Circuit panel issued an unpublished memorandum affirming-in-part and reversing-and-remanding-in-part the District Court’s rulings.

On November 8, 2023, the Ninth Circuit issued a mandate to the California Central District Court, whereupon the Court issued an Order reopening the case as of November 13, 2023.

After collecting a joint statement of the case from the parties, the Court ordered the parties to rebrief the remaining issues in the summary judgment proceedings based only on the existing record.

On February 5, 2024, the Court held a hearing on the remaining summary judgment issues, and on February 6, 2024, the Court issued an Order denying all of the parties’ various pending motions.

In the same Order, the Court set the matter for a jury trial to begin on March 26, 2024, with a final pretrial conference set for March 18, 2024.

The Court used the conference set for March 18, 2024 to discuss the status of the case, and then on March 22, 2024, reset the final pretrial conference to April 15, 2024 and trial start date to May 14, 2024.

On March 28, 2024, the Court reset the final pretrial conference to May 6, 2024 at 2:00 pm, and kept the trial start date as May 14, 2024.

This case went to trial and the jury found that Netlist properly terminated the JDLA in light of Samsung’s material breach.

On October 15, 2021, Samsung initiated a declaratory judgement action against Netlist in the DDE ( Samsung Elecs.

Co., Ltd., et.

Netlist, Inc.

1:21-cv-01453-RGA), where it requested in relevant part that the DDE declare that Samsung does not infringe the ‘218, ‘523, ‘595, ‘506, ‘339, ‘912 and ‘918 Patents, while later seeking leave to add the ‘054 Patent (issued January 25, 2022) to its action.

On August 1, 2022, Hon.

Judge Andrews dismissed all of Samsung’s counts related to Netlist’s ‘912, ‘506, ‘339, and ‘918 Patents, and denied Samsung’s request to bring its ‘054 Patent claims in Delaware.

On September 12, 2022, Netlist amended its Counterclaims to include counterclaims tying Google to the action.

On November 15, 2022, Google responded to Netlist’s Counterclaims by filing a Motion to Dismiss or alternatively to Sever and Stay the counterclaims.

On May 22, 2023, the Court heard oral arguments on Google’s Motion to Dismiss or alternatively, Sever and Stay and Dismiss Willfulness and Indirect Infringement Allegations.

On October 10, 2023, the Court entered an order granting-in-part and denying-in-part Samsung’s prior motion to stay the matter in light of pending IPRs and a Ninth Circuit appeal, staying claims with respect to the ‘218 and ‘595 Patents, while allowing claims under the ‘523 Patent to proceed.

On December 1, 2023, the Court entered an Oral Order staying the matter entirely until the development of any action by any other court pertaining to Samsung’s and Netlist’s rights under the JDLA that may merit lifting the stay.

While such a determination has been made by the District Court for the Central District of California, the case remains stayed.

On November 19, 2021, Samsung filed IPR requests contesting the validity of the ‘218, ‘595, and ‘523 Patents.

Netlist filed its initial responses to Samsung’s IPR petitions on February 18, 2022, contesting the institution of any IPR on the grounds propounded.

On May 3, 2023, the PTAB issued a final written decision finding all of the claims of the ‘523 Patent not unpatentable, while on May 8, 2023 and May 9, 2023, it found all of the claims of the ‘218 and ‘595 Patents, respectively, unpatentable.

On July 10, 2023, Samsung filed a Notice of Appeal challenging the Board’s decision on the ‘523 Patent, thus instituting an appeal before the CAFC of the ‘523 Patent IPR result (CAFC Case No.

As of the reporting date, the parties have completed briefing on the appeal, and the CAFC has not yet set a date for oral argument.

On December 20, 2021, Netlist filed a complaint for patent infringement against Samsung in the EDTX (Case No.

2:21-cv-00463-JRG) under the ‘506, ‘339, and ‘918 Patents.

On May 3, 2022, Netlist entered a First Amended Complaint pursuant to the Federal Rules of Civil Procedure (“FRCP”) Rule 15, adding claims for infringement under three additional patents:

the ‘060, ‘160, and ‘054 Patents.

The ‘506, ‘339, ‘918, ‘060, ‘160, and ‘054 Patents are hereafter collectively referred to as the “EDTX1 Patents.” Netlist brought claims under the ‘339, ‘918, ‘054, ‘060, and ‘160 Patents in its Jury Trial, which concluded on April 21, 2023, with the entry of the jury’s verdict into the public record.

The jury unanimously found that Samsung willfully infringed Netlist’s ‘339, ‘918, ‘054, ‘060, and ‘160 Patents through the sale of their DDR4 LRDIMMs, DDR5 DIMMs, and HBMs, and that none of the patent claims asserted at trial were invalid.

The jury awarded Netlist, Inc.

a total of approximately $ 303 million for Samsung’s infringement.

On May 30, 2023, Hon.

Chief Judge Gilstrap conducted a bench trial to assess the merits of Samsung’s affirmative defenses excusing its infringement of only the ‘339, ‘918, and ‘054 Patents.

On August 11, 2023, Chief Judge Gilstrap issued a memorandum and Order denying Samsung’s requested relief and finding that the ‘918 and ‘054 patents were not unenforceable due to equitable estoppel, prosecution laches, or unclean hands, and that the ‘339 patent was not unenforceable due to unclean hands.

The same day, the Court entered a Final Judgment against the Samsung Defendants for $ 303 million for Samsung’s willful infringement through the date of trial, but declined awarding enhanced damages.

Both parties have filed post-judgment motions, including a motion by Samsung to vacate the final judgment in light of the Ninth Circuit’s recent decision.

Additionally, as of the reporting date, all of the EDTX1 Patents are subject to IPR final written decisions.

The outcome of each of the IPR proceedings related to each of the EDTX1 Patents may affect the underlying collectability of the jury award in this matter .

On July 24, 2024, the Court (i) denied Samsung’s post-trial motions, (ii) upheld the jury's verdict and damages award in the April 2023 trial and (iii) confirmed that Samsung willfully infringed Netlist's patented technologies and that none of Samsung’s asserted claims are valid.

On February 17, 2022, Samsung filed an IPR request contesting the validity of only claim 16 of the ‘912 Patent.

Samsung then filed two additional IPR requests contesting the validity of the ‘506 and ‘339 Patents.

Netlist filed its Patent Owner’s Preliminary Response for the ‘912 and ‘339 Patent IPRs on July 21, 2022, and for the ‘506 Patent IPR on July 28, 2022.

On January 19, 2023, the PTAB instituted IPR trials on both the ‘912 and ‘339 Patents.

The following day, the PTAB instituted an IPR trial on the ‘506 Patent.

On October 19, 2022, the PTAB instituted IPR trials on the ‘912 and ‘339 Patents, while two days later it instituted an IPR trial on the ’506 Patent.

On January 5, 2023, USPTO Director Katherine K.

Vidal entered an Order in the ‘912 Patent proceeding initiating a sua sponte Director review of the Board’s decision granting institution of the ‘912 Patent and staying the underlying proceedings in lieu of a supplemental briefing schedule set by the Director herself.

On February 3, 2023, Director Vidal entered a decision requiring the assigned Board to reevaluate Netlist’s request for discovery on the admitted relationship between Samsung and Google and reassess whether Google is a “Real Party in Interest.” On June 30, 2023, the Board resumed the trial on the Samsung ‘912 Patent IPR, which, by that time, also included Micron’s claims via joinder (see above), and scheduled the ‘912 Patent IPR for further substantive briefing and an oral hearing on January 31, 2024.

On October 17, 2023 and October 18, 2023, the PTAB issued final written decisions stating that all challenged claims of the ‘506 and ‘339, respectively, Patents were unpatentable.

Netlist filed Requests for Rehearing of the ‘506 and ‘339 Patent IPR final written decisions on November 16, 2023 and November 17, 2023, respectively.

On December 20, 2023, the Board denied Netlist’s Request for Rehearing on the ‘506 Patent IPR result.

On May 17, 2022, Samsung filed two IPR petitions contesting the validity of Netlist’s ‘918 and ‘054 Patents.

On December 6, 2022, the Board instituted an IPR trial for the ‘054 Patent, and then instituted an IPR trial for the ‘918 Patent the next day.

Micron has joined these Samsung IPRs on the ‘918 and ‘054 Patents, and oral arguments were heard on September 7, 2023.

On January 5, 2024 and January 6, 2024, Netlist filed requests for USPTO Director Review of the ‘918 and ‘054 Patents, respectively, final written decisions.

On March 18, 2024, the USPTO denied Netlist’s request for Director Review of the ‘918 and ‘054 Patent IPRs.

Netlist filed a notice of appeal challenging the Board’s final written decision for the ‘918 and ‘054 Patent IPRs on May 24, 2024.

On June 3, 2022, Netlist filed patent infringement lawsuits against Samsung in Dusseldorf, Germany, seeking damages for Samsung’s infringement of Netlist’s patents EP735 and EP660 (“Samsung Dusseldorf Action”).

An Oral Hearing was held in the Dusseldorf Court on September 5, 2023 to determine the question of infringement specifically.

The Court confirmed at the hearing that an Order would issue either staying the matter until a decision was reached on validity by the German Federal Patent Court, or a dismissal of the case if there was no infringement.

On September 25, 2023, the Dusseldorf Court entered a stay of the matter until the German Federal Patent Court renders a decision in the nullity actions currently pending for EP735 and EP660.

The German Federal Patent Court has issued its order finding the EP735 null, and the Samsung Dusseldorf Action has been stayed pending the outcome of the nullity reviews of the asserted EP patents.

The Federal Patent Court has scheduled a hearing for the EP660 on November 7, 2024.

On August 1, 2022, Netlist filed a complaint for patent infringement against Samsung in the EDTX (Case No.

2:22-cv-00293) under the ‘912 Patent, which relates generally to technologies to implement rank multiplication.

On August 15, 2022, Netlist filed its first amended complaint here, further addressing Samsung’s infringement of the ‘215 and ‘417 Patents.

On October 21, 2022, Hon.

Chief Judge Gilstrap ordered that this action and a parallel action by Netlist against Micron on the same patents (22-cv-00294-JRG) be consolidated and set for a joint scheduling conference on November 17, 2022, further instructing that this Samsung action be considered the “LEAD CASE” and that any further filings from either action be submitted in therefore all pretrial matters.

On July 20,2023 Netlist filed an amended complaint asserting infringement of the ‘608 Patent by Samsung.

The claim construction hearing was advanced and took place before Hon.

Chief Judge Gilstrap on September 26, 2023.

On November 21, 2023, the Court entered its Claim Construction Order.

Trial is scheduled to begin on November 12, 2024.

On August 26, 2022, Samsung filed two IPR petitions contesting the validity of Netlist’s ‘060 and ‘160 Patents.

On January 19, 2023, Netlist filed its Patent Owner Preliminary Responses in those proceedings.

An oral hearing was held on January 11, 2024, and on April 1, 2024, the PTAB issued its final written decisions finding all challenged claims of the ‘060 and ‘160 Patents unpatentable.

On May 1, 2024, Netlist requested a director review of the final written decisions.

Director review was denied on June 17, 2024.

On August 20, 2024, Netlist a Notice of Appeal to challenge the Board’s final written decision on the ’060 and ’160 Patents before the CAFC, Case No.

On January 10, 2023, Samsung filed two IPR petitions contesting the validity of the ‘215 and ‘417 Patents.

The Board accorded these IPRs a filing date of January 10, 2023, and Netlist filed its Patent Owner Preliminary Responses by the May 9, 2023 deadline.

On August 1, 2023, the Board entered an Order instituting a trial for both of Samsung’s IPR petitions.

The Board simultaneously set a schedule for briefing deadlines, and the date for oral arguments on May 3, 2024.

On January 3, 2024, the PTAB joined the later-filed and substantially-identical Micron IPRs for the ‘215 and ‘417 Patents to Samsung’s IPRs.

The parties completed briefing on the ‘417 and ‘215 Patent IPRs and held oral arguments on May 3, 2024.

The PTAB issued its final written decisions on July 30, 2024, finding all challenged claims unpatentable.

On August 29, 2024, Netlist filed Requests for Director Review of the Board’s final written decisions on the ’215 and ’417 Patents.

On April 27, 2023, Samsung filed an IPR petition contesting the validity of the ‘608 Patent.

The Board accorded Samsung’s IPR petition a filing date on June 14, 2023.

On December 12, 2023, the PTAB instituted

an IPR trial for the ‘608 Patent, despite having previously denied institution from Micron’s earlier-filed IPR petition of the same Patent.

On December 26, 2023, Netlist filed a request for review of the institution decision by the Director of the USPTO.

As of the reporting date, the PTAB and USPTO Director have denied Netlist’s requests.

An oral hearing was held on September 5, 2024.

On October 9, 2023, Samsung initiated a second declaratory judgement action against Netlist in the DDE ( Samsung Elecs.

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.

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 Samsung breached the JDLA and that Netlist properly terminated the JDLA.

On October 15, 2021, SECL and Samsung Semiconductor, Inc.

(“SSI”) (collectively, “Samsung”) filed a declaratory judgement action against Netlist in the U.S.

District Court for the District of Delaware (“DDE”) ( Samsung Electronics Co., Ltd.

Netlist, Inc., Case No.

1:21-cv-01453), seeking a declaration that Samsung does not infringe the following Netlist patents:

and 10,474,595 (respectively, the “’912, ’218, ’523, and ’595 Patents”).

Samsung filed amended complaints to add other Netlist patents:

and 11,232,054 (respectively, the “’506, ’339, ’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”).

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 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.

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.

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.

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.

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, 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 U.S.

District Court for the DDE ( Samsung Elecs.

Co., Ltd., et.

Netlist, Inc.

1:23-cv-01122-RGA), where it requested in relevant part that the DDE declare that Samsung does not infringe Netlist’s U.S.

11,386,024 (the “‘024 Patent”) and that Netlist allegedly breached its contractual obligations to the Joint Electron Device Engineering Council and thus harmed Samsung as a third-party beneficiary.

Netlist filed a motion to dismiss the action on November 6, 2023.

As of the reporting date, the parties have completed briefing on Netlist’s motion and the Court has yet to enter an order.

1:23-cv-01122-RGA), seeking a declaration that Samsung does not infringe Netlist’s U.S.

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 May 22, 2024, Samsung filed a declaratory judgement action against Netlist in the U.S.

District Court for the DDE (Case no.

1:24-cv-00614), seeking a declaration that Samsung does not infringe Netlist’s U.S.

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.

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.

and 10,489,314 (respectively, the “’833, ’035, ’608, and ’314 Patents”).

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.

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-00293), 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;

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 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.

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.

Both the appeal and Netlist’s motion to stay the remand remain pending.

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.

The Idaho State Court case is currently set for trial starting on October 27, 2025.

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.

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.

Netlist’s motion to stay the remand remain pending.

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.

The Idaho State Court case is currently set for trial starting on July 20, 2026.

Google Litigation

On December 4, 2009, Netlist filed a complaint against Google, Inc.

District Court for the Northern District of California (Case no.

3:09-cv-05718), for infringement of the ’912 Patent.

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.

Inter Partes Review Proceedings

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.

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.

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 unpatentable.

On April 11, 2024, Netlist filed a notice of appeal to the CAFC (Case No.

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.

The appeal is pending.

On March 30, 2022, Micron filed a Petition for IPR of the ’314 Patent (Case No.

IPR2022-00745).

On October 30, 2023, the PTAB issued a final written decision finding no challenged claims unpatentable.

On December 29, 2023, Micron filed a notice of appeal to the CAFC (Case No.

The appeal is pending.

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.

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.

On June 3, 2024, this appeal was consolidated with the above appeal on the IPR of the ’918 Patent (Case No.

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.

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.

On September 6, this appeal was consolidated with the above appeal on the IPR of the ’160 Patent (Case No.

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.

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.

On January 15, 2025, this appeal was consolidated with the above appeal on the IPR of the ’215 Patent (Case No.

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.

The appeal is pending.

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 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.

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 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

13 unchanged sentences

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 September 28, 2024 or December 30, 2023.

No shares of preferred stock were outstanding as of March 29, 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.

3 unchanged sentences

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.

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.

1 unchanged sentence

We filed the Certificate of Designation with the Secretary of State of the State of Delaware on April 17, 2017.

March 2025 Lincoln Park Purchase Agreement

On March 13, 2025, we entered into a purchase agreement (the “March 2025 Purchase Agreement”) with Lincoln Park, pursuant to which we have the right to sell to Lincoln Park up to an aggregate of $ 75 million in shares of our common stock, 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 in a noncash transaction on March 13, 2025 and will 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.

We will not receive any cash proceeds from the issuance of these additional commitment shares.

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 its 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 three months ended March 29, 2025, Lincoln Park purchased an aggregate of 975,000 shares of our common stock for a net purchase price of $ 0.9 million under the March 2025 Purchase Agreement.

In connection with the purchase, we issued to Lincoln Park an aggregate of 14,060 shares of our common stock as additional commitment shares in noncash transactions.

Subsequently, from March 30, 2025 through May 9, 2025, Lincoln Park purchased an aggregate of 201,000 shares of our common stock for a net purchase price of $ 0.2 million under the March 2025 Purchase Agreement.

In connection with the purchase, we issued to Lincoln Park an aggregate of 2,250 shares of our common stock as additional commitment shares in noncash transactions.

September 2021 Lincoln Park Purchase Agreement

On September 28, 2021, we entered into a purchase agreement (the “September 2021 Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which we had 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 September 2021 Purchase Agreement.

On September 28, 2021, we entered into a purchase agreement (the “September 2021 Purchase Agreement”) with Lincoln Park, pursuant to which we had 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 September 2021 Purchase Agreement.

As consideration for entering into the September 2021 Purchase Agreement, we previously issued to Lincoln Park 218,750 shares of our common stock as initial commitment shares in a noncash transaction on September 28, 2021 and would issue up to 143,750 additional shares of our common stock as additional commitment shares on a pro rata basis in connection with any additional purchases.

6 unchanged sentences

We had the right to terminate the September 2021 Purchase Agreement at any time, at no cost to us.

During 2023, Lincoln Park purchased an aggregate of 7,865,000 shares of our common stock for a net purchase price of $ 23.4 million under the September 2021 Purchase Agreement.

In connection with the purchases, we issued to Lincoln Park an aggregate of 44,939 shares of our common stock as additional commitment shares in noncash transactions.

During the nine months ended September 28, 2024, Lincoln Park purchased an aggregate of 3,195,889 shares of our common stock for a net purchase price of $ 5.2 million under the September 2021 Purchase Agreement.

During fiscal year 2024, Lincoln Park purchased an aggregate of 3,195,889 shares of our common stock for a net purchase price of $ 5.2 million under the September 2021 Purchase Agreement.

In connection with the purchases, we issued to Lincoln Park an aggregate of 10,046 shares of our common stock as additional commitment shares in noncash transactions.

The September 2021 Purchase Agreement terminated on its terms on October 1, 2024 and no shares of our common stock were sold subsequent to the quarter ended September 28, 2024.

The September 2021 Purchase Agreement terminated on its terms on October 1, 2024.

2024 Offering

On October 11, 2024, we entered into a Securities Purchase Agreement (the “2024 Purchase Agreement”) with certain investors, pursuant to which we agreed to issue and sell to the investors in a registered offering (the “2024 Offering”) an aggregate of (i) 13,636,364 shares of our common stock, (ii) Series A Common Stock Purchase Warrants (the “Series A Warrants”) to purchase up to an aggregate of 13,636,364 shares of our common stock, and (iii) Series B Common Stock Purchase Warrants (the “Series B Warrants,” collectively, the “Warrants”) to purchase up to 13,636,364 shares of our common stock, at a per share purchase price of $ 1.10 per share and accompanying warrants.

On October 11, 2024, we entered into the 2024 Purchase Agreement with certain investors, pursuant to which we agreed to issue and sell to the investors in the 2024 Offering an aggregate of (i) 13,636,364 shares of our common stock, (ii) Series A Warrants to purchase up to an aggregate of 13,636,364 shares of our common stock, and (iii) Series B Warrants to purchase up to 13,636,364 shares of our common stock, at a per share purchase price of $ 1.10 per share and accompanying warrants.

The 2024 Offering closed on October 15, 2024.

The net proceeds to us from the 2024 Offering were approximately $ 14.2 million, after deducting placement agent fees and offering costs paid by us.

The Warrants are exercisable at any time on or after the issuance date and contain provisions with the beneficial ownership limited to 4.99 % of the number of shares of our common stock outstanding immediately after giving effect to the issuance of share of our common stock issuable upon the exercise of the Warrants, which percentage may be increased up to 9.99 % upon the notice to us.

after giving effect to the issuance of share of our common stock issuable upon the exercise of the Warrants, which percentage may be increased up to 9.99 % upon the notice to us.

The Series A Warrants have a term of five years from the issuance date and have an exercise price of $ 1.30 per share.

The Series B Warrants have a term of 100 days and have an exercise price of $ 1.10 per share.

The Series B Warrants had a term of 100 days and had an exercise price of $ 1.10 per share.

None of the Series B Warrants were exercised prior to their expiration.

Pursuant to the 2024 Purchase Agreement, our director and executive officers entered into lock-up agreements with us, pursuant to which they agreed not to offer for sale, contract to sell, or sell any shares of our common stock or any securities convertible into, or exercisable or exchangeable for, shares of our common stock, for a period of 100 days from the closing of the 2024 Offering, subject to certain customary exceptions.

1 unchanged sentence

Note 8—Stock-Based Awards

As of September 28, 2024, we had 577,936 shares of our common stock reserved for future issuance under our Amended and Restated 2006 Incentive Plan (“Amended 2006 Plan”).

As of March 29, 2025, we had 2,449,622 shares of our common stock reserved for future issuance under our Amended and Restated 2006 Incentive Plan (“Amended 2006 Plan”).

Stock options granted under 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.

1 unchanged sentence

Stock Options

The following table summarizes the activity related to stock options during the nine months ended September 28, 2024:

The following table summarizes the activity related to stock options during the three months ended March 29, 2025:

(in thousands)

1 unchanged sentence

Expired or forfeited

Outstanding as of September 28, 2024

Outstanding as of March 29, 2025

Restricted Stock Units

The following table summarizes the activity related to RSUs during the nine months ended September 28, 2024:

The following table summarizes the activity related to RSUs during the three months ended March 29, 2025:

(in thousands)

Balance nonvested as of December 28, 2024

Balance nonvested as of September 28, 2024

Balance nonvested as of March 29, 2025

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

Cost of sales

1 unchanged sentence

Selling, general and administrative

As of September 28, 2024, we had approximately $ 7.8 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.

As of March 29, 2025, we had approximately $ 5.6 million, net of estimated forfeitures, of unearned stock-based compensation, which we expect to recognize over a weighted-average period of approximately 2.0 years.

Note 9—Warrants

Warrant activity for the three months ended March 29, 2025 is as follows:

(in thousands)

Outstanding as of December 28, 2024

Outstanding as of March 29, 2025

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

What changed 10-Q

Item 1. Financial Statements