What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-13 · 69 added, 56 removed, 102 unchanged (55% of the section changed)

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Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “may,” “will,” “might,” “plan,” “predict,” “believe,” “should,” “could” and similar words or expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Forward-looking statements contained in this MD&A include statements about, among other things:

Forward-looking statements contained in this MD&A and the condensed consolidated financial statements and the related notes included in Part I, Item 1 of this report include statements about, among other things:

● our beliefs regarding the market and demand for our products or the component products we resell;

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● our beliefs and estimates regarding potential intellectual property suits or claims in process under current litigation;

● our ability to defend successfully any challenges to our intellectual property or claims asserting patent infringement relating to our products;

● our ability to develop and launch new products that are attractive to the market and stimulate customer demand for these products;

● our plans relating to our intellectual property, including our goals of monetizing, licensing, expanding and defending our patent portfolio;

● our plans relating to our intellectual property, including our goals of monetizing, protecting, licensing, expanding and defending our patent portfolio;

● our expectations and strategies regarding outstanding legal proceedings and patent reexaminations relating to our intellectual property portfolio;

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All forward-looking statements reflect management’s present assumptions, expectations and beliefs regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements.

These risks and uncertainties include those described under “Risk Factors” in Part II, Item 1A of this report.

These risks and uncertainties include those described under “Risk Factors” in Part II, Item 1A of this Quarterly Report.

In light of these risks and uncertainties, our forward-looking statements should not be relied on as predictions of future events.

All forward-looking statements reflect our assumptions, expectations and beliefs only as of the date they are made, and except as required by law, we undertake no obligation to revise or update any forward-looking statements for any reason.

The following MD&A should be read in conjunction with our condensed consolidated financial statements and the related notes included in Part I, Item 1 of this report, as well as our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2025 (the “Annual Report”).

All information presented herein is based on our fiscal calendar, and references to particular years, quarters, months or periods refer to our fiscal years ended in January or December and the associated quarters,

months and periods of those fiscal years.

The following MD&A should be read in conjunction with our condensed consolidated financial statements and the related notes included in Part I, Item 1 of this Quarterly Report, as well as our Annual Report on Form 10-

K filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2025 (the “Annual Report”).

Each of the terms the “Company,” “Netlist,” “we,” “us,” or “our” as used herein refers collectively to Netlist, Inc.

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

During the first quarter of 2025, we recorded net sales of $29.0 million, gross profit of $1.3 million and net loss of $9.5 million.

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

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

We have also funded our operations with a revolving line of credit under a bank credit facility with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (“SVB”).

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

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

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

Recent Developments

March 2025 Lincoln Park Purchase Agreement

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

Concurrent with the execution of the March 2025 Purchase Agreement, we also entered into a registration rights agreement with Lincoln Park relating to the common stock to be sold to Lincoln Park.

As consideration for entering into the March 2025 Purchase Agreement, we issued to Lincoln Park 1,123,023 shares of our common stock as initial commitment shares 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.

These issuances of our common stock were registered pursuant to a prospectus supplement to our existing Registration Statement on Form S-3 originally declared effective by the SEC on August 14, 2024.

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.

June 2025 Offering

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

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

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

The June 2025 Offering closed on June 25, 2025.

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

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

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

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

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

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

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

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

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

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

Economic Conditions, Challenges and Risks

government has recently implemented significant tariff increases on imports from the People’s Republic of China (“PRC”).

While we do not believe we have been materially affected by the recent tariffs or changes in U.S.

trade policy, tariffs, quotas, trade agreements or other trade restrictions could increase our operating expenses and reduce gross margins.

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

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

These net sales were significantly concentrated between three large customers.

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

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Net Sales and Gross Profit

Net sales and gross profit for the three months ended March 29, 2025 and March 30, 2024 were as follows (dollars in thousands):

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

Three Months Ended

Six Months Ended

Cost of sales

Gross margin percentage

Net sales decreased by approximately $6.8 million during the first quarter of 2025 compared to the same period of 2024, primarily as a result of a $2.9 million decrease in the sale of registered DIMM (“RDIMM”), discrete memory component products, a $2.6 million decrease in sales of our flash and solid-state drives (“SSD”) products, and a $1.4 million decrease in sales of low-profile memory subsystem products.

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

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

Gross Profit and Gross Margin

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

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

Operating Expenses

Operating expenses for the three months ended March 29, 2025 and March 30, 2024, were as follows (dollars in thousands):

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

Three Months Ended

Six Months Ended

Research and development

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Research and Development

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

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

Intellectual Property Legal Fees

Intellectual property legal fees consist of fees incurred for patent enforcement and licensing, appeals, patent drafting and prosecution, and opposition to third-party post-grant patent proceedings.

management, due dates of various filings and their associated fees, and the arrangements we may make with our legal advisors in connection with enforcement proceedings, which may include fee arrangements or contingent fee arrangements in which we would pay these legal advisors on a scaled percentage of any negotiated fees, settlements or judgments awarded to us based on if, how and when the fees, settlements or judgments are obtained.

Although we expect intellectual property legal fees to generally increase over time as we continue to expand, protect and enforce our patent portfolio, these increases may not be linear but may occur in lump sums depending on jury trial management, due dates of various filings and their associated fees, and the arrangements we may make with our legal advisors in connection with enforcement proceedings, which may include fee arrangements or contingent fee arrangements in which we would pay these legal advisors on a scaled percentage of any negotiated fees, settlements or judgments awarded to us based on if, how and when the fees, settlements or judgments are obtained.

See Note 6 to the condensed consolidated financial statements included in Part I, Item 1 of this report for further discussion.

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

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

Selling, General and Administrative

Selling, general and administrative expenses were consistent during the first quarter of 2025 compared to the same period of 2024.

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

Other Income, Net

Other income, net for the three months ended March 29, 2025 and March 30, 2024 was as follows (dollars in thousands):

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

Three Months Ended

Six Months Ended

Interest income, net

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Total other income, net

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

Other income, net slightly increased during the first quarter of 2025 compared to the same period of 2024, primarily as a result of deposit returned for our former manufacturing facility located in the PRC.

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

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

Liquidity and Capital Resources

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

We have also funded our operations with a revolving line of credit under a bank credit facility with SVB, proceeds raised from the 2024 Offering (as defined below) and funds raised through the March 2025 Purchase Agreement.

The following tables present selected financial information as of March 29, 2025 and December 28, 2024 and for the first three months of 2025 and 2024 (in thousands):

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

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

Cash, cash equivalents and restricted cash

Working capital

Three Months Ended

Six Months Ended

Net cash used in operating activities

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Net cash provided by financing activities

During the three months ended March 29, 2025, net cash used in operating activities was primarily a result of net loss of $9.5 million, non-cash adjustments to net loss of $0.9 million, and net cash outflows from changes in operating assets and liabilities of $1.5 million driven predominantly by a decrease in accounts payable due to the payments made for the legal fees incurred to defend our patent portfolio, partially offset by a decrease in inventories due to higher turnovers and an increase in deferred revenue related to advance payments received on orders shipped in April 2025.

Net cash provided by financing activities during the three months ended March 29, 2025 primarily consisted of $0.9 million in net proceeds from issuance of common stock under the March 2025 Purchase Agreement and $0.3 million in net borrowings under the 2023 SVB Credit Agreement (as defined below), partially offset by $0.2 million in payments of notes payable to finance insurance policies.

During the three months ended March 30, 2024, net cash used in operating activities was primarily a result of net loss of $17.0 million, non-cash adjustments to net loss of $1.6 million, and net cash inflows from changes in operating assets and liabilities of $1.1 million driven predominantly by an increase in accounts payable due to higher legal fees to defend our patent portfolio and an increase in accrued expenses and other liabilities, partially offset by an increase in inventories due to higher purchases to support increased sales.

Net cash provided by financing activities during the three months ended March 30, 2024 primarily consisted of $0.5 million in net borrowings under the 2023 SVB Credit Agreement (as defined below), $2.1 million in net proceeds from issuance of common stock under the September 2021 Purchase Agreement (as defined below), offset by $0.1 million in payments of notes payable to finance insurance policies.

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

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

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

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

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

Capital Resources

June 2025 Offering

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

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.

March 2025 Lincoln Park Purchase Agreement

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

As of March 29, 2025, $74.1 million remains available under the March 2025 Purchase Agreement with Lincoln Park.

2024 Offering

On October 11, 2024, we entered into a Securities 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 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 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.

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

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

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

2023 SVB Credit Agreement

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The maturity date is November 7, 2025.

As of March 29, 2025, the outstanding borrowings under the 2023 SVB Credit Agreement were $1.6 million with no availability under the revolving line of credit.

During the three months ended March 29, 2025, we made net borrowings of $0.3 million under the 2023 SVB Credit Agreement.

September 2021 Lincoln Park Purchase Agreement

On September 28, 2021, we entered into 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 $75.0 million in shares of our common stock over the 36-month term of the September 2021 Purchase Agreement subject to the conditions and limitations set forth in the September 2021 Purchase Agreement.

As of September 28, 2024, $31.0 million remained available under the September 2021 Purchase Agreement with Lincoln Park.

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.

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

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

Sufficiency of Cash Balances and Potential Sources of Additional Capital

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

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

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

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

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

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditure or capital resources that is material to investors.

Recent Accounting Pronouncement

Recent Accounting Pronouncements

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

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We adopted this guidance on December 28, 2024.

The adoption only impacted our disclosure and has no material impact on the Company’s 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):

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis