What changed in this filing

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Item 1. Financial Statements

2025-08-12 compared with 2025-05-13 · 195 added, 105 removed, 546 unchanged (35% of the section changed)

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Operating lease right-of-use assets

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:

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Commitments and contingencies

Stockholders' equity (deficit):

Stockholders' deficit:

Preferred stock, $ 0.001 par value— 10,000 shares authorized:

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Accumulated deficit

Total stockholders' equity (deficit)

Total liabilities and stockholders' equity (deficit)

Total stockholders' deficit

Total liabilities and stockholders' deficit

See accompanying Notes to Condensed Consolidated Financial Statements.

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Three Months Ended

Six Months Ended

Cost of sales

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands) (Unaudited)

Stockholders'

Equity (Deficit)

Balance, December 28, 2024

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Balance, March 29, 2025

Issuance of common stock, net

Exercise of stock options

Stock-based compensation

Restricted stock units vested and distributed

Balance, June 28, 2025

Stockholders'

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Balance, March 30, 2024

Issuance of common stock, net

Exercise of stock options

Stock-based compensation

Restricted stock units vested and distributed

Balance, June 29, 2024

See accompanying Notes to the Condensed Consolidated Financial Statements.

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(In thousands) (Unaudited)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

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Cash flows from financing activities:

Net borrowings under line of credit

Net borrowings (repayments) under line of credit

Principal repayments under finance lease

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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 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.

We have evaluated events occurring subsequent to June 28, 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

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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 are 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 incurred net loss of $ 15.6 million for the six months ended June 28, 2025 and $ 31.7 million for the six months ended June 29, 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).

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

June 2025 Offering

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

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

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

The June 2025 Offering closed on June 25, 2025.

The net proceeds to us from the June 2025 Offering were approximately $ 11.3 million, after deducting placement agent fees and offering costs paid by us (see Note 7).

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

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

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

Furthermore, if at any time on or after the date of issuance there occurs any share split, share dividend, share combination recapitalization or other similar transaction involving our common stock (each, a “Share Combination Event”) and the lowest daily volume weighted average price of 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.

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

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

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

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

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

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).

As of June 28, 2025, $ 73.9 million remains available under the March 2025 Purchase Agreement with Lincoln Park (see Note 7).

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

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.

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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.

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.

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

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.

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.

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Three Months Ended

Six Months Ended

Employee Compensation (1)

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

Three Months Ended

Six Months Ended

Supplemental disclosure of cash flow information:

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Three Months Ended

Six Months Ended

Weighted-average basic shares outstanding - basic and diluted

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Three Months Ended

Six Months Ended

Weighted average common share equivalents

2 unchanged sentences

Three Months Ended

Six Months Ended

Resales of third-party products

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Three Months Ended

Six Months Ended

United States

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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.

The PRC accounted for more than 10 % of our net product sales for each of the three and six months ended June 28, 2025.

The United States and the PRC accounted for more than 10 % of our net product sales for each of the three and six months ended June 29, 2024.

As of June 28, 2025, we had deferred revenue of $ 10.3 million.

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

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Three Months Ended

Six Months Ended

Less than 10% of net sales during the period.

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

As of June 28, 2025 two customers represented approximately 26 % and 21 % 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.

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 our operating results.

We mitigate risks associated with foreign and domestic receivables by purchasing comprehensive 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 the three months ended March 29, 2025 and March 30, 2024, resales of these products represented approximately 95 % and 87 % of net sales, respectively.

For the three and six months ended June 28, 2025, resales of these products represented approximately 96 % and 96 % of net sales, respectively.

For the three and six months ended June 29, 2024, resales of these products represented approximately 90 % and 89 % of net product sales, respectively.

Our purchases are typically concentrated in a small number of suppliers.

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Three Months Ended

Six 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.

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The maturity date is November 7, 2025.

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.

As of June 28, 2025, all obligations under the 2023 SVB Credit Agreement were secured by a first priority security interest in our tangible and intangible assets (excluding our intellectual property).

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 March 29, 2025, we were in compliance with our covenants under the 2023 SVB Credit Agreement.

As of June 28, 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 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.

As of June 28, 2025 and December 28, 2024, (i) outstanding letters of credit were $ 10.6 million and $ 11.9 million, respectively, (ii) outstanding borrowings were $ 1.1 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):

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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.

As of June 28, 2025 and December 28, 2024, we had $ 0.2 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.

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Three Months Ended

Six Months Ended

Operating lease cost

1 unchanged sentence

Operating cash flows from operating leases

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

For each of the three and six months ended June 28, 2025 and June 29, 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):

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Finance leases

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

Maturities of lease liabilities as of June 28, 2025, were as follows (in thousands):

Total lease payments

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Contingent Legal Expenses

We may 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 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.

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 Inter Partes Reviews

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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 May 5, 2025, Samsung 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 Samsung’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 Samsung’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 Samsung’s motion for a new trial.

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

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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.

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”).

(collectively, “Google”) and counterclaims against Samsung, seeking damages from the infringement by Google and Samsung, a finding of willful infringement by Google and Samsung 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 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.

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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.

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.

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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.

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.

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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.

On October 9, 2023, Samsung filed a declaratory judgement action against Netlist in the DDE (Case No.

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

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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.

On June 13, 2025, Netlist filed a motion to stay this action pending the resolution of the 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 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.

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On March 4, 2025, the Court denied this motion.

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) 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 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 amended complaints against (a) Samsung and Avnet, Inc.

(“Avnet”) and (b) 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 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 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 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.

Micron Litigation

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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”).

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.

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.

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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.

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.

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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;

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 as Micron’s motion for a new trial.

On July 9, 2025, Micron filed a notice of appeal to the CAFC, case no.

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.

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.

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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 June 12, 2025, the CAFC denied Netlist’s motion to stay the remand pending the appeal;

the appeal remains pending.

The Idaho State Court case is currently set for trial starting on May 11, 2026.

On December 23, 2023, Netlist filed a complaint for declaratory judgment against Micron in EDTX (Case No.

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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.

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.

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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.

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 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.

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 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

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

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

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.

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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 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.

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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 October 24, 2024, SECL filed a Petition for IPR of the ’319 Patent (Case No.

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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.

German Proceedings

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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.

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.

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(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;

and (vi) 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, may be indefinite.

and (vi) 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.

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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 March 29, 2025 or December 28, 2024.

No shares of preferred stock were outstanding as of June 28, 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.

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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.

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

June 2025 Offering

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

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

The June 2025 Offering closed on June 25, 2025.

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

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.

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

March 2025 Lincoln Park Purchase Agreement

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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.

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

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.

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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.

During the six months ended June 28, 2025, Lincoln Park purchased an aggregate of 1,176,000 shares of our common stock for a net purchase price of $ 1.1 million under the March 2025 Purchase Agreement.

In connection with the purchase, we issued to Lincoln Park an aggregate of 16,310 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, 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.

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

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

We controlled the timing and amount of any sales of our common stock to Lincoln Park over the 36-month term of the September 2021 Purchase Agreement.

There was no upper limit on the price per share that Lincoln Park was required to pay for our common stock under the September 2021 Purchase Agreement, but in no event would shares be sold to Lincoln Park on a day the closing price was less than the floor price specified in the September 2021 Purchase Agreement.

In all instances, we could not sell shares of our common stock to Lincoln Park under the September 2021 Purchase Agreement if that would result in Lincoln Park beneficially owning more than 9.99 % of our common stock.

The September 2021 Purchase Agreement did not limit our ability to raise capital from other sources at our sole discretion, except that, subject to certain exceptions, we could not enter into any Variable Rate Transaction (as defined in the September 2021 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 September 2021 Purchase Agreement.

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

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.

2024 Offering

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.

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 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.

The 2024 Purchase Agreement also provides that we may not, subject to the exceptions described in the 2024 Purchase Agreement, effect or enter into any Variable Rate Transactions (as defined in the 2024 Purchase Agreement) until the one-year anniversary of the closing date of the 2024 Offering.

Note 8—Stock-Based Awards

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”).

As of June 28, 2025, we had 2,460,997 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.

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Stock Options

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

The following table summarizes the activity related to stock options during the six months ended June 28, 2025:

(in thousands)

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Expired or forfeited

Outstanding as of March 29, 2025

Outstanding as of June 28, 2025

Restricted Stock Units

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

The following table summarizes the activity related to RSUs during the six months ended June 28, 2025:

(in thousands)

Balance nonvested as of December 28, 2024

Balance nonvested as of March 29, 2025

Balance nonvested as of June 28, 2025

Stock-Based Compensation

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Three Months Ended

Six Months Ended

Cost of sales

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Selling, general and administrative

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.

As of June 28, 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 1.9 years.

Note 9—Warrants

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

Warrant activity for the six months ended June 28, 2025 is as follows:

(in thousands)

Outstanding as of December 28, 2024

Outstanding as of March 29, 2025

Outstanding as of June 28, 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