Netlist, Inc. — Earnings Release 2025

Aug 7, 2025

{0}------------------------------------------------

Netlist Reports Second Quarter 2025 Results

IRVINE, CALIFORNIA, August 7, 2025 - Netlist, Inc. (OTCQB: NLST) today reported financial results for the second quarter ended June 28, 2025.

Recent Highlights:

• Revenue for the second quarter of 2025 increased by 44%, or \$12.7 million, compared to the first quarter of 2025.
• Operating expenses for the second quarter of 2025 decreased by 31% or \$3.4 million, compared to the first quarter of 2025, and by 52% or \$8.2 million year over year.

"Second quarter revenue improvement was driven by healthy demand for DDR5 memory modules for AI and data centers," said Chief Executive Officer, C.K. Hong. "We continue to advance legal efforts to protect our intellectual property, filing multiple legal actions against Samsung and Micron for infringement of our new HBM and DDR5 patents. During the quarter, we also secured an order finalizing the district court's \$445 million damages award against Micron."

Net sales for the second quarter ended June 28, 2025 were \$41.7 million, compared to net sales of \$36.8 million for the second quarter ended June 29, 2024. Gross profit for the second quarter ended June 28, 2025 was \$1.4 million, compared to a gross profit of \$0.8 million for the second quarter ended June 29, 2024.

Net sales for the six months ended June 28, 2025 were \$70.7 million, compared to net sales of \$72.6 million for the six months ended June 29, 2024. Gross profit for the six months ended June 28, 2025 was \$2.7 million, compared to a gross profit of \$1.5 million for the six months ended June 29, 2024.

Net loss for the second quarter ended June 28, 2025 was (\$6.1) million, or (\$0.02) per share, compared to a net loss of (\$14.8) million in the same prior year period, or (\$0.06) per share. These results include stock-based compensation expense of \$1.0 million and \$1.1 million for the quarters ended June 28, 2025 and June 29, 2024, respectively.

Net loss for the six months ended June 28, 2025 was (\$15.6) million, or (\$0.06) per share, compared to a net loss in the same prior year period of (\$31.7) million, or (\$0.12) per share. These results include stockbased compensation expense of \$2.0 million and \$2.5 million for the six months ended June 28, 2025 and June 29, 2024, respectively.

As of June 28, 2025, cash, cash equivalents and restricted cash were \$29.0 million, total assets were \$41.4 million, working capital deficit was (\$8.2) million, and stockholders' deficit was (\$7.0) million.

Conference Call Information

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, August 7, 2025 at 12:00 p.m. Eastern Time to review Netlist's results for the second quarter ended June 28, 2025. The live webcast and archived replay of the call can be accessed for 90 days in the Investors section of Netlist's website at www.netlist.com.

About Netlist

Netlist is a leading innovator in advanced memory and storage solutions. With a rich portfolio of patented technologies, Netlist's inventions are foundational to the advancement of AI which is revolutionizing computing. To learn more about Netlist, please visit www.netlist.com.

{1}------------------------------------------------

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release include, without limitation, statements about Netlist's ability to execute on its strategic initiatives, the results of pending litigations and Netlist's ability to successfully defend its intellectual property. Forward-looking statements are statements other than historical facts and often address future events or Netlist's future performance and reflect management's present expectations 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, uncertainties and other factors include, among others: risks that Samsung will appeal the final judgment by the trial court for the Samsung litigation (appeals in general could cause a lengthy delay in Netlist's ability to collect damage awards, could overturn the verdicts or reduce the damages awards); risks that Netlist will suffer adverse outcomes in its litigation with Samsung, Micron or Google or in its various other active proceedings to defend the validity of its patents; risks related to Netlist's plans for its intellectual property, including its strategies for monetizing, licensing, expanding, and defending its patent portfolio; risks associated with patent infringement litigation initiated by Netlist, or by others against Netlist, as well as the costs and unpredictability of any such litigation; risks associated with Netlist's product sales, including the market and demand for products sold by Netlist and its ability to successfully develop and launch new products that are attractive to the market; the success of product, joint development and licensing partnerships; the competitive landscape of Netlist's industry; and general economic, political and market conditions, including the ongoing conflicts between Russia and Ukraine and Israel and Palestine, factory slowdowns and/or shutdowns, and changes in international tariff policies. All forwardlooking 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 and other risks and uncertainties are described in Netlist's Annual Report on Form 10-K for the fiscal year ended December 28, 2024 filed with the SEC on March 28, 2025, and the other filings it makes with the U.S. Securities and Exchange Commission from time to time, including any subsequently filed quarterly and current reports. In particular, you are encouraged to review the Company's Quarterly Report on Form 10-Q for the quarter ended June 28, 2025 that will be filed with the SEC for any revisions or updates to the information in this release. In light of these risks, uncertainties and other factors, these forward-looking statements should not be relied on as predictions of future events. These forward-looking statements represent Netlist's assumptions, expectations and beliefs only as of the date they are made, and except as required by law, Netlist undertakes no obligation to revise or update any forward-looking statements for any reason.

Investor Relations Contacts:

Mike Smargiassi The Plunkett Group NLST@theplunkettgroup.com (212) 739-6729

Gail M. Sasaki Netlist, Inc., Chief Financial Officer gsasaki@netlist.com (949) 435-0025

{2}------------------------------------------------

NETLIST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)

400570	June 28, 2025		December 28, 2024
ASSETS
Current assets: Cash and cash equivalents	\$	18,438	\$	22,507
Restricted cash		10,600		12,100
Accounts receivable, net		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' DEFICI	Г
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
Long-term 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		_		_
Common stock		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

{3}------------------------------------------------

NETLIST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)

		Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Net sales	\$	41,706	\$	36,835	\$	70,681	\$	72,642
Cost of sales (1)		40,314		36,062		67,989		71,154
Gross profit		1,392		773		2,692		1,488
Operating expenses:								•
Research and development (1)		833		2,369		1,726		4,810
Intellectual property legal fees		3,480		10,514		10,507		23,054
Selling, general and administrative (1)		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 common 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
(1) Amounts include stock-based compensation exp	ense as	follows:
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 stock-based compensation	\$	1,013	\$	1,128	\$	1,984	\$	2,502