NETLIST INC 10-Q

Item 1. Financial Statements NETLIST, INC. AND SUBSIDIARIES ​ CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except par value) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 28, ​ December 28, ​ 2025 2024 ASSETS Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 18,438 ​ $ 22,507 Restricted cash ​ ​ 10,600 ​ ​ 12,100 Accounts receivable, net of allowances of $ 14 (2025) and $ 41 (2024) ​ ​ 1,322 ​ ​ 1,671 Inventories ​ ​ 8,781 ​ ​ 2,744 Prepaid expenses and other current assets ​ ​ 623 ​ ​ 733 Total current assets ​ ​ 39,764 ​ ​ 39,755 Property and equipment, net ​ ​ 410 ​ ​ 517 Operating lease right-of-use assets ​ ​ 823 ​ ​ 1,101 Other assets ​ ​ 448 ​ ​ 466 Total assets ​ $ 41,445 ​ $ 41,839 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 33,373 ​ $ 42,307 Revolving line of credit ​ ​ 1,105 ​ ​ 1,230 Accrued payroll and related liabilities ​ ​ 768 ​ ​ 808 Deferred revenue ​ ​ 10,318 ​ ​ 40 Other current liabilities ​ ​ 2,270 ​ ​ 2,675 Debt due within one year ​ ​ 179 ​ ​ — Total current liabilities ​ ​ 48,013 ​ ​ 47,060 Operating lease liabilities ​ ​ 337 ​ ​ 641 Other liabilities ​ ​ 53 ​ ​ 186 Total liabilities ​ ​ 48,403 ​ ​ 47,887 Commitments and contingencies ​ ​ ​ ​ ​ ​ Stockholders' deficit: ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.001 par value— 10,000 shares authorized: Series A preferred stock, $ 0.001 par value; 1,000 shares authorized; none issued and outstanding ​ ​ — ​ ​ — Common stock, $ 0.001 par value— 450,000 shares authorized; 292,451 (2025) and 271,986 (2024) shares issued and outstanding ​ ​ 293 ​ ​ 273 Additional paid-in capital ​ ​ 346,002 ​ ​ 331,367 Accumulated deficit ​ ​ ( 353,253 ) ​ ​ ( 337,688 ) Total stockholders' deficit ​ ​ ( 6,958 ) ​ ​ ( 6,048 ) Total liabilities and stockholders' deficit ​ $ 41,445 ​ $ 41,839 ​ ​ ​ See accompanying Notes to Condensed Consolidated Financial Statements. ​ ​ 3 Table of Contents NETLIST, INC. AND SUBSIDIARIES ​ CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ ​ 2025 2024 2025 2024 Net sales ​ $ 41,706 ​ $ 36,835 ​ $ 70,681 ​ $ 72,642 Cost of sales ​ ​ 40,314 ​ ​ 36,062 ​ ​ 67,989 ​ ​ 71,154 Gross profit ​ ​ 1,392 ​ ​ 773 ​ ​ 2,692 ​ ​ 1,488 Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development ​ ​ 833 ​ ​ 2,369 ​ ​ 1,726 ​ ​ 4,810 Intellectual property legal fees ​ ​ 3,480 ​ ​ 10,514 ​ ​ 10,507 ​ ​ 23,054 Selling, general and administrative ​ ​ 3,326 ​ ​ 2,966 ​ ​ 6,473 ​ ​ 6,082 Total operating expenses ​ ​ 7,639 ​ ​ 15,849 ​ ​ 18,706 ​ ​ 33,946 Operating loss ​ ​ ( 6,247 ) ​ ​ ( 15,076 ) ​ ​ ( 16,014 ) ​ ​ ( 32,458 ) Other income, net: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income, net ​ ​ 133 ​ ​ 257 ​ ​ 353 ​ ​ 634 Other income, net ​ ​ 36 ​ ​ 41 ​ ​ 96 ​ ​ 79 Total other income, net ​ ​ 169 ​ ​ 298 ​ ​ 449 ​ ​ 713 Loss before provision for income taxes ​ ​ ( 6,078 ) ​ ​ ( 14,778 ) ​ ​ ( 15,565 ) ​ ​ ( 31,745 ) Provision for income taxes ​ ​ — ​ ​ — ​ ​ — ​ ​ 1 Net loss ​ $ ( 6,078 ) ​ $ ( 14,778 ) ​ $ ( 15,565 ) ​ $ ( 31,746 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic and diluted ​ $ ( 0.02 ) ​ $ ( 0.06 ) ​ $ ( 0.06 ) ​ $ ( 0.12 ) Weighted-average common shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic and diluted ​ ​ 275,751 ​ ​ 256,571 ​ ​ 274,065 ​ ​ 255,751 ​ ​ ​ See accompanying Notes to the Condensed Consolidated Financial Statements. ​ 4 Table of Contents B NETLIST, INC. AND SUBSIDIARIES ​ CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Stockholders' ​ Shares Amount Capital Deficit Deficit Balance, December 28, 2024 ​ 271,986 ​ $ 273 ​ $ 331,367 ​ $ ( 337,688 ) ​ $ ( 6,048 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 9,487 ) ​ ​ ( 9,487 ) Issuance of common stock, net ​ 2,112 ​ ​ 2 ​ ​ 937 ​ ​ — ​ ​ 939 Exercise of stock options ​ 23 ​ ​ — ​ ​ 12 ​ ​ — ​ ​ 12 Stock-based compensation ​ — ​ ​ — ​ ​ 971 ​ ​ — ​ ​ 971 Restricted stock units vested and distributed ​ 506 ​ ​ 1 ​ ​ ( 1 ) ​ ​ — ​ ​ — Tax withholdings related to net share settlements of equity awards ​ ( 54 ) ​ ​ ( 1 ) ​ ​ ( 58 ) ​ ​ — ​ ​ ( 59 ) Balance, March 29, 2025 ​ 274,573 ​ ​ 275 ​ ​ 333,228 ​ ​ ( 347,175 ) ​ ​ ( 13,672 ) Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 6,078 ) ​ ​ ( 6,078 ) Issuance of common stock, net ​ 17,346 ​ ​ 17 ​ ​ 11,722 ​ ​ — ​ ​ 11,739 Exercise of stock options ​ 73 ​ ​ 1 ​ ​ 39 ​ ​ — ​ ​ 40 Stock-based compensation ​ — ​ ​ — ​ ​ 1,013 ​ ​ — ​ ​ 1,013 Restricted stock units vested and distributed ​ 459 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Balance, June 28, 2025 ​ 292,451 ​ $ 293 ​ $ 346,002 ​ $ ( 353,253 ) ​ $ ( 6,958 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ ​ ​ ​ Total ​ ​ Common Stock ​ Paid-in ​ Accumulated ​ Stockholders' ​ Shares Amount Capital Deficit Deficit Balance, December 30, 2023 ​ 253,593 ​ $ 254 ​ $ 307,328 ​ $ ( 283,823 ) ​ $ 23,759 Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 16,968 ) ​ ​ ( 16,968 ) Issuance of common stock, net ​ 1,244 ​ ​ 1 ​ ​ 2,130 ​ ​ — ​ ​ 2,131 Exercise of stock options ​ 78 ​ ​ — ​ ​ 62 ​ ​ — ​ ​ 62 Stock-based compensation ​ — ​ ​ — ​ ​ 1,374 ​ ​ — ​ ​ 1,374 Restricted stock units vested and distributed ​ 678 ​ ​ 1 ​ ​ ( 1 ) ​ ​ — ​ ​ — Tax withholdings related to net share settlements of equity awards ​ ( 4 ) ​ ​ — ​ ​ ( 7 ) ​ ​ — ​ ​ ( 7 ) Balance, March 30, 2024 ​ 255,589 ​ ​ 256 ​ ​ 310,886 ​ ​ ( 300,791 ) ​ ​ 10,351 Net loss ​ — ​ ​ — ​ ​ — ​ ​ ( 14,778 ) ​ ​ ( 14,778 ) Issuance of common stock, net ​ 1,962 ​ ​ 2 ​ ​ 3,108 ​ ​ — ​ ​ 3,110 Exercise of stock options ​ 14 ​ ​ — ​ ​ 6 ​ ​ — ​ ​ 6 Stock-based compensation ​ — ​ ​ — ​ ​ 1,128 ​ ​ — ​ ​ 1,128 Restricted stock units vested and distributed ​ 181 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Balance, June 29, 2024 ​ 257,746 ​ $ 258 ​ $ 315,128 ​ $ ( 315,569 ) ​ $ ( 183 ) ​ See accompanying Notes to the Condensed Consolidated Financial Statements. ​ ​ 5 Table of Contents ​ NETLIST, INC. AND SUBSIDIARIES ​ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ 2025 2024 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 15,565 ) ​ $ ( 31,746 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ ​ 142 ​ ​ 166 Non-cash lease expense ​ ​ 278 ​ ​ 319 Gain on forgiveness of payables ​ ​ ( 345 ) ​ ​ — Stock-based compensation ​ ​ 1,984 ​ ​ 2,502 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable ​ ​ 349 ​ ​ ( 796 ) Inventories ​ ​ ( 6,037 ) ​ ​ 3,825 Prepaid expenses and other assets ​ ​ 655 ​ ​ ( 2,146 ) Accounts payable ​ ​ ( 8,934 ) ​ ​ ( 13,270 ) Accrued payroll and related liabilities ​ ​ ( 40 ) ​ ​ ( 25 ) Deferred revenue ​ ​ 10,278 ​ ​ 17,624 Other liabilities ​ ​ ( 497 ) ​ ​ 1,522 Net cash used in operating activities ​ ​ ( 17,732 ) ​ ​ ( 22,025 ) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Acquisition of property and equipment ​ ​ ( 25 ) ​ ​ ( 64 ) Net cash used in investing activities ​ ​ ( 25 ) ​ ​ ( 64 ) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Net borrowings (repayments) under line of credit ​ ​ ( 125 ) ​ ​ 747 Principal repayments under finance lease ​ ​ — ​ ​ ( 87 ) Payments on notes payable ​ ​ ( 358 ) ​ ​ ( 312 ) Proceeds from issuance of common stock, net ​ ​ 12,678 ​ ​ 5,241 Proceeds from exercise of stock options ​ ​ 52 ​ ​ 68 Payments for taxes related to net share settlement of equity awards ​ ​ ( 59 ) ​ ​ ( 7 ) Net cash provided by financing activities ​ ​ 12,188 ​ ​ 5,650 Net change in cash, cash equivalents and restricted cash ​ ​ ( 5,569 ) ​ ​ ( 16,439 ) Cash, cash equivalents and restricted cash at beginning of period ​ ​ 34,607 ​ ​ 52,845 Cash, cash equivalents and restricted cash at end of period ​ $ 29,038 ​ $ 36,406 ​ ​ ​ ​ ​ ​ ​ Reconciliation of cash, cash equivalents and restricted cash at end of period: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 18,438 ​ $ 23,806 Restricted cash ​ ​ 10,600 ​ ​ 12,600 Cash, cash equivalents and restricted cash at end of period ​ $ 29,038 ​ $ 36,406 ​ ​ ​ See accompanying Notes to the Condensed Consolidated Financial Statements . ​ ​ 6 Table of Contents NETLIST, INC. AND SUBSIDIARIES ​ Notes to Condensed Consolidated Financial Statements (Unaudited) ​ Note 1—Summary of Significant Accounting Policies ​ Basis of Presentation ​ Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in the condensed consolidated financial statements prepared in accordance with U.S. 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 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. The adjustments are of a normal recurring nature except as otherwise noted. 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 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 ​ The condensed consolidated financial statements include the accounts of Netlist, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. ​ Fiscal Year ​ Our fiscal year is the 52 - or 53 -week period that ends on the Saturday nearest to December 31. Our fiscal year 2025 will include 52 weeks and ends on December 27, 2025. Each quarter of fiscal year 2025 will be comprised of 13 weeks. Unless otherwise stated, references to particular years, quarters, months and periods refer to our fiscal years ended in December and the associated quarters, months and periods of those fiscal years. ​ Use of Estimates ​ The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. 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 are not 7 Table of Contents 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. ​ Liquidity ​ 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”), 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. Mr. Hong purchased $ 3.0 million of shares and accompanying June 2025 Warrants in the June 2025 Offering. The June 2025 Offering closed on June 25, 2025. The net proceeds to us from the June 2025 Offering were approximately $ 11.3 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. Hong. ​ 8 Table of Contents 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 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. 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 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 9 Table of Contents 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 ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ ​ 2025 ​ 2024 ​ 2025 ​ 2024 Expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Employee Compensation (1) ​ $ 1,903 ​ $ 2,533 ​ $ 4,063 ​ $ 5,080 Stock Based Compensation ​ ​ 1,013 ​ ​ 1,128 ​ ​ 1,984 ​ ​ 2,502 Program Expenses (2) ​ ​ 535 ​ ​ 1,035 ​ ​ 1,116 ​ ​ 1,983 Professional Fees (3) ​ ​ 3,528 ​ ​ 10,315 ​ ​ 10,141 ​ ​ 22,704 ​ (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. ​ ​ 10 Table of Contents Note 2—Supplemental Financial Information ​ Inventories ​ Inventories consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 28, ​ December 28, ​ 2025 2024 Raw materials ​ $ 281 ​ $ 379 Work in process ​ ​ 142 ​ ​ 54 Finished goods ​ ​ 8,358 ​ ​ 2,311 ​ ​ $ 8,781 ​ $ 2,744 ​ Cash Flow Information ​ The following table shows supplemental disclosures of cash flow information and non-cash financing activities (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ ​ 2025 2024 Supplemental disclosure of cash flow information: ​ ​ ​ ​ ​ ​ Cash paid during the year for: ​ ​ ​ ​ ​ ​ Interest ​ $ 20 ​ $ 56 Income taxes ​ $ — ​ $ 1 Supplemental disclosure of non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Debt financing of insurance ​ $ 537 ​ $ 500 ​ Loss Per Share ​ The following table shows the computation of basic and diluted loss per share of common stock (in thousands, except per share data): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ ​ 2025 2024 2025 2024 Numerator: Net loss ​ $ ( 6,078 ) ​ $ ( 14,778 ) ​ $ ( 15,565 ) ​ $ ( 31,746 ) Denominator: Weighted-average basic shares outstanding - basic and diluted ​ ​ 275,751 ​ ​ 256,571 ​ ​ 274,065 ​ ​ 255,751 Net loss per share - basic and diluted ​ $ ( 0.02 ) ​ $ ( 0.06 ) ​ $ ( 0.06 ) ​ $ ( 0.12 ) ​ The table below shows potentially dilutive weighted average common share equivalents, consisting of shares issuable upon the exercise of outstanding stock options and warrants using the treasury stock method and the shares vesting of issuable upon the restricted stock units (“RSUs”). These potential weighted average common share equivalents have been excluded from the diluted net loss per share calculations above as their effect would be anti-dilutive (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ ​ 2025 2024 2025 2024 Weighted average common share equivalents ​ ​ 587 ​ ​ 1,736 ​ ​ 580 ​ ​ 1,922 ​ 11 Table of Contents Disaggregation of Net Sales ​ The following table shows disaggregated net sales by major source (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ 2025 ​ 2024 2025 ​ 2024 Resales of third-party products ​ $ 40,218 ​ $ 33,330 ​ $ 67,866 ​ $ 64,604 Sale of our modular memory subsystems ​ ​ 1,488 ​ ​ 3,505 ​ ​ 2,815 ​ ​ 8,038 Total net sales ​ $ 41,706 ​ $ 36,835 ​ $ 70,681 ​ $ 72,642 ​ Net product sales by country presented below are based on the billing location of the customer (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ 2025 2024 2025 2024 United States ​ $ 1,888 ​ $ 5,740 ​ $ 3,828 ​ $ 14,623 People's Republic of China (1) ​ ​ 38,848 ​ ​ 29,959 ​ ​ 65,017 ​ ​ 56,213 Other countries ​ ​ 970 ​ ​ 1,136 ​ ​ 1,836 ​ ​ 1,806 Total net sales ​ $ 41,706 ​ $ 36,835 ​ $ 70,681 ​ $ 72,642 ​ (1) People’s Republic of China (“PRC”) includes Hong Kong and Taiwan. ​ The PRC accounted for more than 10 % of our net product sales for 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. ​ Major Customers, Suppliers and Products ​ Our net product sales have historically been concentrated in a small number of customers. The following table sets forth the percentage of net product sales made to customers that each comprise 10% or more of total product sales: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ ​ 2025 ​ 2024 ​ 2025 ​ 2024 Customer A ​ 34 % ​ 45 % ​ 26 % ​ 36 % Customer B ​ 13 % ​ 25 % ​ * ​ 15 % Customer C ​ 16 % ​ * ​ 10 % ​ * Customer D ​ * ​ * ​ 10 % ​ * ​ * Less than 10% of net sales during the period. ​ 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 our operating results. We mitigate risks associated with foreign and domestic receivables by purchasing comprehensive credit insurance. 12 Table of Contents ​ 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 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. The following table shows the percentage of purchases made from supplier(s) that each comprise 10% or more of total purchases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ ​ 2025 ​ 2024 ​ 2025 ​ 2024 Supplier A ​ 93 % ​ 91 % ​ 92 % ​ 89 % ​ 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 SVB, which provides for a revolving line of credit up to $ 10.0 million. The borrowing base is limited to 85 % of eligible accounts receivable, subject to certain adjustments. Borrowings accrue interest on advance at a per annum rate equal to the greater of 8.50 % and the Wall Street Journal prime rate. The maturity date is November 7, 2025. ​ As of June 28, 2025, 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 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 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. ​ 13 Table of Contents Note 4—Debt ​ Our debt consisted of the following (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 28, ​ December 28, ​ 2025 2024 Notes payable ​ $ 179 ​ $ — Less: amounts due within one year ​ ​ ( 179 ) ​ ​ — Long-term debt ​ $ — ​ $ — ​ Insurance Policy Finance Agreement ​ 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. 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 ​ We have operating and finance leases primarily associated with office and manufacturing facilities and certain equipment. The determination of which discount rate to use when measuring the lease obligation was deemed a significant judgment. ​ Lease cost and supplemental condensed consolidated cash flow information related to operating and finance leases were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ 2025 2024 2025 2024 Lease cost: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating lease cost ​ $ 154 ​ $ 174 ​ $ 310 ​ $ 365 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 174 ​ $ 189 ​ $ 349 ​ $ 395 ​ 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. ​ 14 Table of Contents Supplemental condensed consolidated balance sheet information related to leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 28, ​ December 28, ​ ​ 2025 ​ 2024 Operating Leases ​ ​ ​ ​ ​ ​ Operating lease right-of-use assets ​ $ 823 ​ $ 1,101 Other current liabilities ​ $ 628 ​ $ 640 Operating lease liabilities ​ ​ 337 ​ ​ 641 Total operating lease liabilities ​ $ 965 ​ $ 1,281 ​ ​ ​ ​ ​ ​ ​ Finance Leases ​ ​ ​ ​ ​ ​ Property and equipment, at cost ​ $ 488 ​ $ 488 Accumulated depreciation ​ ​ ( 341 ) ​ ​ ( 302 ) Property and equipment, net ​ $ 147 ​ $ 186 Other current liabilities ​ $ 4 ​ $ 4 Other liabilities ​ ​ 1 ​ ​ 3 Total finance lease liabilities ​ $ 5 ​ $ 7 ​ The following table includes supplemental information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 28, ​ December 28, ​ ​ 2025 ​ 2024 Weighted Average Remaining Lease Term (in years) ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 1.5 ​ ​ 2.0 Finance leases ​ ​ 1.1 ​ ​ 1.6 ​ ​ ​ ​ ​ ​ ​ Weighted Average Discount Rate ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 5.6 % ​ ​ 5.7 % Finance leases ​ ​ 5.5 % ​ ​ 5.5 % ​ Maturities of lease liabilities as of June 28, 2025, were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ Finance Fiscal Year ​ Leases ​ Leases 2025 ​ $ 347 ​ $ 2 2026 ​ ​ 639 ​ ​ 3 2027 ​ ​ 23 ​ ​ — Total lease payments ​ ​ 1,009 ​ ​ 5 Less: imputed interest ​ ​ ( 44 ) ​ ​ — Total ​ $ 965 ​ $ 5 ​ ​ ​ ​ Note 6—Commitments and Contingencies ​ Contingent Legal Expenses ​ 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. ​ ​ 15 Table of Contents 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. We own numerous patents and continue to seek to grow and strengthen our patent portfolio, which covers various aspects of our innovations and includes various claim scopes. We plan to pursue avenues to monetize our intellectual property portfolio, in which we would generate revenue by selling or licensing our technology, and we intend to vigorously enforce our patent rights against alleged infringers of such rights. We dedicate substantial resources to protecting and enforcing our intellectual property rights, including with patent infringement proceedings we file against third parties and defense of our patents against challenges made by way of reexamination and review proceedings at the U.S. 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. ​ Any litigation, regardless of its outcome, is inherently uncertain, involves a significant dedication of resources, including time and capital, and diverts management’s attention from our other activities. As a result, any current or future claims, allegations, or challenges by or against third parties, whether eventually decided in our favor or settled, could materially adversely affect our business, financial condition and results of operations. Additionally, the outcome of pending or future litigation and/or related patent reviews and reexaminations, as well as any delay in their resolution, could affect our ability to continue to sell our 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. ​ Samsung Litigation ​ On May 28, 2020, Netlist filed a complaint against Samsung Electronics Co., Ltd. (“SECL”) in the U.S. District Court for the Central District of California (“CDCA”) ( Netlist Inc. vs. Samsung Electronics Co., Ltd ., Case No. 8:20-cv-00993) for SECL’s breach of the Joint Development and License Agreement (“JDLA”) between the parties. Netlist amended its complaint to seek a declaratory judgment that it properly terminated the JDLA in light of SECL’s material breaches thereof. On October 14, 2021, the Court granted summary judgment in favor of Netlist on SECL’s breach and Netlist’s termination of the JDLA. The case proceeded to trial on the issue of damages on December 1, 2021, and the jury reached a verdict for SECL on December 3, 2021. The Court entered final judgment on February 15, 2022, and both parties appealed to the U.S. Court of Appeals for the Ninth Circuit. The Ninth Circuit affirmed-in-part and reversed-in-part the judgment of the District Court, and remanded the case to the District Court, which reopened the case on November 13, 2023. The case proceeded to trial on May 14, 2024, and the jury reached a verdict for Netlist on May 17, 2024. On December 26, 2024, the Court granted SECL’s motion for a new trial, holding that one juror’s voir dire responses support a finding of implied juror bias which deprived both parties of their right to a fair trial. A new trial was held from March 18 to March 21, 2025. On March 24, 2025, the jury returned a verdict for Netlist. On April 7, 2025, the Court entered final judgment in favor of Netlist on its claims that 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. (“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. et. al. v. Netlist, Inc., Case No. 1:21-cv-01453), seeking a declaration that Samsung does not infringe the following Netlist patents: U.S. Patent Nos. 7,619,912; 9,858,218; 10,217,523; and 10,474,595 (respectively, the “’912, ’218, ’523, and ’595 Patents”). Samsung filed amended complaints to add other Netlist patents: U.S. Patent Nos. 10,860,506; 10,949,339; 11,016,918; and 11,232,054 (respectively, the “’506, ’339, ’918, and ’054 Patents”). Netlist filed a motion to dismiss, and on August 1, 16 Table of Contents 2022, the Court granted this motion in part, declining to exercise jurisdiction over the ’912, ’506, ’339, ’918, and ’054 Patents. On September 12, 2022, Netlist filed a crossclaim against Google LLC and Alphabet, Inc. (collectively, “Google”) and counterclaims against 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 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. Patent Nos. 8,787,060 and 9,318,160 (respectively, the “’060 and ’160 Patents”). On April 14, 2023, this case proceeded to a jury trial on the ’339, ’918, ’054, ’060, and ’160 Patents. On April 21, 2023, the jury returned a verdict finding that Samsung willfully infringed all five patents and awarded $ 303 million in damages to Netlist. The collectability of the damages award may be affected by the outcomes of pending appeals of final written decisions in the respective Inter Partes Reviews of the five patents (see below). On August 11, 2023, the Court entered final judgment. On August 9, 2024, Samsung filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit (“CAFC”), case no. 2024-2203. On January 6, 2025, Samsung filed a motion to stay this appeal pending the resolution of the above CDCA case. On February 18, 2025, the CAFC denied this motion without prejudice. The appeal is pending. ​ On August 1, 2022, Netlist filed a complaint against Samsung in EDTX (Case No. 2:22-cv-00293), for infringement of the ’912 Patent. Netlist later amended its complaint to additionally assert infringement of U.S. Patent Nos. 11,093,417; 9,858,215; and 10,268,608 (respectively, the “’417, ’215, and ’608 Patents”). On November 12, 2024, this case proceeded to a jury trial on the ’912, ’417, and ’608 Patents. On November 22, 2024, the jury returned a verdict finding that Samsung willfully infringed all three patents and awarded $ 118 million in damages to Netlist. The collectability of the damages award may be affected by the outcomes of pending appeals of final written decisions in the respective Inter Partes Reviews of the three patents (see below) On December 2, 2024, the Court entered final judgment. On December 4, 2024, Netlist filed a motion for a preliminary injunction and a subsequent permanent injunction. On December 30, Samsung filed a combined post-trial motion for judgment as a matter of law and for a new trial, and a motion to amend the judgment and to stay this case pending the resolution of the above CDCA case. On January 31, 2025, the Court denied Netlist’s motion for a preliminary injunction and a subsequent permanent injunction. ​ On October 9, 2023, Samsung filed a declaratory judgement action against Netlist in the DDE (Case No. 1:23-cv-01122-RGA), seeking a declaration that Samsung does not infringe Netlist’s U.S. Patent No. 11,386,024 (the “’024 Patent”). On November 6, 2023, Netlist moved to dismiss for lack of subject matter jurisdiction and failure to state a claim. On March 4, 2025, the Court denied this motion. On June 13, 2025, Netlist filed a motion to stay this action pending the resolution of the 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. Patent No. 11,880,319 (the “’319 Patent”). On July 15, 2024, Netlist moved to dismiss for lack of subject matter jurisdiction and failure to state a claim, which the Court denied as moot in view of Samsung’s First Amended Complaint filed on August 5, 2024. On August 21, 2024, Netlist moved to dismiss the First Amended Complaint for lack of subject matter jurisdiction and failure to state a claim. On March 4, 2025, the Court denied this motion. On June 13, 17 Table of Contents 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 ​ On April 28, 2021, Netlist filed complaints against Micron Semiconductor Products, Inc., Micron Technology, Inc., and Micron Technology Texas, LLC (collectively, “Micron”) in the Western District of Texas (“WDTX”) (Case Nos. 6:21-cv-00430 and 6:21-cv-00431), for infringement of U.S. Patent Nos. 8,301,833; 9,824,035; 10,268,608; and 10,489,314 (respectively, the “’833, ’035, ’608, and ’314 Patents”), seeking damages, a finding of willful infringement and enhanced damages pursuant to 35 U.S.C. § 284, and an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285. On February 14, 2022, the Court granted Micron’s motion to transfer venue for convenience to another court within WDTX, and the transferred cases were assigned new case nos. 1:22-cv-00134 and 1:22-cv-00136. On May 11, 2022, the Court granted motions to stay the two cases pending the respective Inter Partes Reviews of the ’833, ’035, ’608, and ’314 Patents. ​ On June 10, 2022, Netlist filed a complaint against Micron in EDTX (Case No. 2:22-cv-00203), for infringement of the ’506, ’339, ’918, ’054, ’060 and ’160 Patents, seeking damages, a finding of willful infringement and enhanced damages pursuant to 35 U.S.C. § 284, an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285, and equitable relief. On May 19, 2023, Micron filed a motion to stay this case pending the respective Inter Partes Reviews of the six asserted patents. On October 22, 2023, the magistrate judge issued a claim construction order, which the Court adopted on January 17, 2024. On January 3, 2024, the magistrate judge issued a recommendation to deny Micron’s motion to stay this case, which the Court adopted on January 31, 2024. On February 10, 2024, the Court vacated its prior order, staying this case pending the respective Inter Partes Reviews of the six asserted patents. ​ 18 Table of Contents On August 1, 2022, Netlist filed a complaint against Micron in EDTX (Case No. 2:22-cv-00294), for infringement of the ’912 Patent. Netlist later amended its complaint to additionally assert infringement of the ’417 and ’215 Patents. On May 20, 2024, this case proceeded to a jury trial on the ’912 and ’417 Patents. On May 23, 2024, the jury returned a verdict finding that Samsung willfully infringed both patents and awarded $ 445 million in damages to Netlist. The collectability of the damages award may be affected by the outcomes of pending appeals of final written decisions in the respective Inter Partes Reviews of the two patents (see below). On July 11, 2024, the Court entered final judgment. On August 7, 2024, Micron filed post-trial motions for judgment as a matter of law and for a new trial. On June 11, 2025, the Court denied Micron’s motions for judgment as a matter of law on willfulness, on non-infringement, and on damages as well as Micron’s motion for a new trial. On July 9, 2025, Micron filed a notice of appeal to the CAFC, case no. 2025-1936. The appeal is pending. ​ On December 11, 2023, Micron filed a complaint against Netlist in the District Court of the Fourth Judicial District of the State of Idaho, Ada County (“Idaho State Court”) (Case No. CV01-23-19920), alleging that Netlist violated Idaho Code § 48-1703 by making a bad faith assertion of infringement of the ’833 Patent in WDTX, seeking compensatory and exemplary damages pursuant to Code §§ 48-1706(b) and (d), and costs and fees, including reasonable attorneys’ fees, pursuant to Code § 48-1706(c). Netlist removed the case to the U.S. District Court for the District of Idaho, and Micron moved to remand the case to the Idaho State Court. On August 16, 2024, the District of Idaho remanded this case to the Idaho State Court. On August 20, 2024, Netlist appealed the remand to the CAFC, case no. 2024-2281, and moved the District of Idaho to stay the remand. On September 17, 2024, Micron moved to dismiss or transfer the appeal to the U.S. Court of Appeals for the Ninth Circuit, which the CAFC denied on December 19, 2024. On September 18, 2024, Netlist moved to dismiss the Idaho State Court case for lack of personal jurisdiction and failure to state a claim, which the Idaho State Court denied on December 5, 2024. On June 12, 2025, the CAFC denied Netlist’s motion to stay the remand pending the appeal; the appeal remains pending. 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. 2:23-cv-00628), seeking a declaration that Netlist had not asserted patent infringement in bad faith against Micron in the prior EDTX patent infringement cases. On January 19, 2024, Micron moved to dismiss this case for lack of subject matter jurisdiction. On February 7, 2024, Netlist filed a First Amended Complaint. On July 19, 2024, the Court denied Micron’s motion to dismiss as moot. On December 5, 2024, Netlist moved for a protective order to preclude Micron from seeking discovery into Netlist’s subjective intent in filing the prior EDTX patent infringement cases. On December 13, 2024, Micron moved to stay this case on abstention grounds. On March 27, 2025, the Court stayed this case pending the conclusion of the CAFC appeals of the Inter Partes Review (“IPR”) decisions on the Netlist patents asserted against Micron in the prior EDTX patent infringement cases. ​ On January 16, 2024, Micron filed a complaint against Netlist in Idaho State Court (Case No. CV01-24-01032), alleging that Netlist violated Idaho Code § 48-1703 by making a bad faith assertion of infringement of the ’918 and ’054 Patents in the EDTX, seeking compensatory and exemplary damages pursuant to Code §§ 48-1706(b) and (d), and costs and fees, including reasonable attorneys’ fees, pursuant to Code § 48-1706(c). Netlist removed the case to the U.S. District Court for the District of Idaho, and Micron moved to remand the case to the Idaho State Court. On August 13, 2024, the District of Idaho remanded this case to the Idaho State Court. On August 20, 2024, Netlist appealed the remand to the CAFC, case no. 2024-2282, and moved the District of Idaho to stay the remand. On September 10, 2024, the appeal was consolidated with the above-related appeal (Case No. 2024-2281). On September 17, 2024, Netlist moved to dismiss the Idaho State Court case for lack of personal jurisdiction and failure to state a claim, which the Idaho State Court denied on December 20, 2024. On June 27, 2025, the Idaho State Court granted Netlist’s motion to stay this case until the CAFC issues its opinion in the appeal of the IPR decisions involving the two patents. ​ On May 19, 2025, Netlist filed a complaint against Micron in the EDTX (Case No. 2:25-cv-00558) for infringement of ’087 Patent. On June 17, 2025, Micron moved to dismiss the complaint for improper venue. 19 Table of Contents 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 ​ On December 4, 2009, Netlist filed a complaint against Google, Inc. in the U.S. District Court for the Northern District of California (Case no. 3:09-cv-05718), for infringement of the ’912 Patent, seeking damages, a finding of willful infringement and enhanced damages pursuant to 35 U.S.C. § 284, an exceptional case finding and reasonable attorneys’ fees pursuant to 35 U.S.C. § 285, and a preliminary and permanent injunction. On October 17, 2022, the Court entered a stipulated order to stay this case until the resolution of the patent infringement suit against Samsung filed on August 1, 2022 in EDTX (Case No. 2:22-cv-00293), including any appeal thereof. ​ 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. 2023-2133). The CAFC heard oral arguments on March 4, 2025. On March 5, 2025, the CAFC affirmed the PTAB’s final written decision. ​ On October 15, 2021, SECL filed a Petition for IPR of the ’595 Patent (Case No. IPR2022-00064). On May 9, 2023, the PTAB issued a final written decision finding all challenged claims unpatentable. ​ On February 17, 2022, SECL filed a Petition for IPR of Claim 16 of the ’912 Patent (Case No. IPR2022-00615). On November 18, 2022, Micron also filed a Petition for IPR of Claim 16 of the ’912 Patent, IPR2023-00203. On April 17, 2024, the PTAB issued a final written decision in the two IPRs finding Claim 16 of the 20 Table of Contents ’912 Patent unpatentable. On September 10, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2024-2304). The appeal is pending. ​ On March 2, 2022, SECL filed a Petition for IPR of the ’339 Patent (Case No. IPR2022-00639). On November 18, 2022, Micron also filed a Petition for IPR of the ’339 Patent (Case No. IPR2023-00204). On October 18, 2023, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On April 11, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2024-1707). The appeal is pending. ​ On March 22, 2022, SECL filed a Petition for IPR of the ’506 Patent (Case No. IPR2022-00711). On November 18, 2022, Micron also filed a Petition for IPR of the ’506 Patent (Case No. IPR2023-00205). On October 17, 2023, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On February 21, 2024, Netlist filed a notice of appeal to the CAFC, case no. 2024-1521. The 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. 2024-1312). 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. 2024-1859). The appeal is pending. ​ On May 17, 2022, SECL filed a Petition for IPR of the ’054 Patent (Case No. IPR2022-00999). On January 6, 2023, Micron also filed a Petition for IPR of the ’054 Patent (Case No. IPR2023-00405). On December 5, 2023, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On May 20, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2024-1863). On June 3, 2024, this appeal was consolidated with the above appeal on the IPR of the ’918 Patent (Case No. 2024-1859). ​ On August 26, 2022, SECL filed a Petition for IPR of the ’160 Patent (Case No. IPR2022-01427). On May 8, 2023, Micron also filed a Petition for IPR of the ’160 Patent, case no. IPR2023-00883. On April 1, 2024, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On August 19, 2024, Netlist filed a notice of appeal to the CAFC, case no. 2024-2240. The appeal is pending. ​ On August 26, 2022, SECL filed a Petition for IPR of the ’060 Patent (Case No. IPR2022-01428). On May 8, 2023, Micron also filed a Petition for IPR of the ’060 Patent (Case No. IPR2023-00882). On April 1, 2024, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On August 19, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2024-2241). On September 6, this appeal was consolidated with the above appeal on the IPR of the ’160 Patent (Case No. 2024-2240). ​ On January 10, 2023, SECL filed a Petition for IPR of the ’215 Patent, case no. IPR2023-00455. On May 8, 2023, Micron also filed a Petition for IPR of the ’215 Patent (Case No. IPR 2023-01142). On July 30, 2024, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On December 10, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2025-1286). The appeal is pending. ​ On January 10, 2023, SECL filed a Petition for IPR of the ’417 Patent (Case No. IPR2023-00454). On May 8, 2023, Micron also filed a Petition for IPR of the ’417 Patent (Case No. IPR2023-01141). On July 30, 2024, the PTAB issued a final written decision in the two IPRs finding all challenged claims unpatentable. On December 10, 2024, Netlist filed a notice of appeal to the CAFC (Case No. 2025-1296). On January 15, 2025, this appeal was consolidated with the above appeal on the IPR of the ’215 Patent (Case No. 2025-1286). ​ 21 Table of Contents On April 27, 2023, SECL filed a Petition for IPR of the ’608 Patent (Case No. IPR2023-00847). On January 10, 2024, Micron also filed a Petition for IPR of the ’608 Patent (Case No. IPR2024-00370). On July 23, 2024, the PTAB denied institution of the IPR sought by Micron. On December 10, 2024, the PTAB issued a final written decision in the IPR brought by SECL finding no challenged claims unpatentable. On January 13, 2025, SECL filed a notice of appeal to the CAFC (Case No. 2025-1378). The 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 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. IPR2025-00002). On February 21, 2025, Netlist filed its preliminary response to the Petition. On May 15, 2025, the PTAB granted institution of the IPR. On May 29, 2025, Netlist requested director review of the institution decision, which was denied on July 17, 2025. On August 7, 2025, Netlist filed a statutory disclaimer and a request for adverse judgment. ​ 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 ​ In the ordinary course of our business, we have made certain indemnities, commitments and guarantees pursuant to which we may be required to make payments in relation to certain transactions. These may include, among others: (i) intellectual property indemnities to our customers and licensees in connection with the use, sale and/or license of our products; (ii) indemnities to vendors and service providers pertaining to claims based on our negligence or willful misconduct; (iii) indemnities involving the accuracy of representations and warranties in certain contracts; (iv) indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware; (v) indemnities pertaining to all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with transactions contemplated by applicable investment or loan documents, as applicable; and (vi) indemnities or 22 Table of Contents other claims related to certain real estate leases, under which we may be required to indemnify property owners for environmental and other liabilities or may face other claims arising from our use of the applicable premises. The duration of these indemnities, commitments and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation of the maximum potential for future payments we could be obligated to make. Historically, we have not been obligated to make significant payments as a result of these obligations, and no liabilities have been recorded for these indemnities, commitments and guarantees in the accompanying consolidated balance sheets. ​ Note 7—Stockholders’ Equity ​ Serial Preferred Stock ​ Our authorized capital stock includes 10,000,000 shares of serial preferred stock, with a par value of $ 0.001 per share. No shares of preferred stock were outstanding as of 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. In connection with the adoption of the Rights Agreement and pursuant to its terms, our board of directors authorized and declared a dividend of one right (each, a “Right”) for each outstanding share of our common stock to stockholders of record at the close of business on May 18, 2017 (the “Record Date”), and authorized the issuance of one Right for each share of our common stock issued by us (except as otherwise provided in the Rights Agreement) between the Record Date and the Distribution Date (as defined below). On April 17, 2024, we appointed Equiniti Trust Company, LLC (“Equiniti”) as our rights agent under the Rights Agreement pursuant to that certain Amendment No. 4 to Rights Agreement, dated as of April 17, 2024, by and between us and Equiniti (the “Fourth Amendment”). ​ Each Right entitles the registered holder, subject to the terms of the Rights Agreement, to purchase from us, when exercisable and subject to adjustment, one unit consisting of one one -thousandth of a share (a “Unit”) of our Series A Preferred Stock (the “Preferred Stock”), at a purchase price of $ 6.56 per Unit, subject to adjustment. Subject to the provisions of the Rights Agreement, including certain exceptions specified therein, a distribution date for the Rights (the “Distribution Date”) will occur upon the earlier of (i) 10 business days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired or otherwise obtained beneficial ownership of 15 % or more of the then-outstanding shares of our common stock, and (ii) 10 business days (or such later date as may be determined by our board of directors) following the commencement of a tender offer or exchange offer that would result in a person or group becoming an Acquiring Person. The Rights are not exercisable until the Distribution Date and, unless earlier redeemed or exchanged by us pursuant to the terms of the Rights Agreement, as amended, will expire on the close of business on April 17, 2027. ​ In connection with the adoption of the Rights Agreement, our board of directors approved a Certificate of Designation of the Series A Preferred Stock (the “Certificate of Designation”) designating 1,000,000 shares of our serial preferred stock as Series A Preferred Stock and setting forth the rights, preferences and limitations of the Preferred Stock. We filed the Certificate of Designation with the Secretary of State of the State of Delaware on April 17, 2017. 23 Table of Contents Common Stock ​ 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. Mr. Hong purchased $ 3.0 million of shares and accompanying June 2025 Warrants in the June 2025 Offering. The June 2025 Offering closed on June 25, 2025. The net proceeds to us from the June 2025 Offering were approximately $ 11.3 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 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. ​ 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 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 24 Table of Contents 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. 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 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. ​ Note 8—Stock-Based Awards ​ 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. RSUs granted for our employees and consultants generally vest in equal installments annually and fully vest over a four-year term from the grant date. ​ 25 Table of Contents Stock Options ​ The following table summarizes the activity related to stock options during the six months ended June 28, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ Number of ​ Average ​ ​ Shares ​ Exercise ​ ​ (in thousands) Price Outstanding as of December 28, 2024 ​ ​ 3,257 ​ $ 0.78 Granted ​ ​ — ​ ​ — Exercised ​ ​ ( 96 ) ​ ​ 0.53 Expired or forfeited ​ ​ ( 415 ) ​ ​ 1.14 Outstanding as of June 28, 2025 ​ ​ 2,746 ​ $ 0.73 ​ Restricted Stock Units ​ The following table summarizes the activity related to RSUs during the six months ended June 28, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ Average ​ ​ Number of ​ Grant-Date ​ ​ Shares ​ Fair Value ​ ​ (in thousands) ​ per Share Balance nonvested as of December 28, 2024 ​ ​ 3,682 ​ $ 2.49 Granted ​ ​ 635 ​ ​ 0.67 Vested ​ ​ ( 965 ) ​ ​ 2.96 Forfeited ​ ​ ( 266 ) ​ ​ 2.46 Balance nonvested as of June 28, 2025 ​ ​ 3,086 ​ $ 1.97 ​ Stock-Based Compensation ​ The following table summarizes the stock-based compensation expense by line item in the condensed consolidated statements of operations (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended Six Months Ended ​ ​ June 28, ​ June 29, ​ June 28, ​ June 29, ​ ​ 2025 ​ 2024 ​ 2025 ​ 2024 Cost of sales ​ $ 42 ​ $ 45 ​ $ 50 ​ $ 66 Research and development ​ ​ 137 ​ ​ 198 ​ ​ 345 ​ ​ 560 Selling, general and administrative ​ ​ 834 ​ ​ 885 ​ ​ 1,589 ​ ​ 1,876 Total ​ $ 1,013 ​ $ 1,128 ​ $ 1,984 ​ $ 2,502 ​ 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. ​ 26 Table of Contents Note 9—Warrants ​ Warrant activity for the six months ended June 28, 2025 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Number of ​ Average ​ ​ Shares ​ Exercise ​ (in thousands) Price Outstanding as of December 28, 2024 ​ ​ 38,384 ​ $ 1.78 Granted ​ ​ 34,286 ​ ​ 0.70 Exercised ​ ​ — ​ ​ — Expired ​ ​ ( 13,636 ) ​ ​ 1.10 Outstanding as of June 28, 2025 ​ ​ 59,034 ​ $ 1.31 ​ ​ ​ ​ ​ ​ 27 Table of Contents