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Summary of Significant Accounting Policies | 6 Months Ended
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Jun. 27, 2026
Summary of Significant Accounting Policies |
Summary of Significant Accounting Policies | 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 27, 2025, included in our Annual Report on Form 10-K filed with the SEC on March 19, 2026. ​ 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 27, 2026 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 2026 will include 53 weeks and ends on January 2, 2027. All quarters, except the fourth quarter of fiscal year 2026, will be comprised of 13 weeks. The fourth quarter of fiscal year 2026 will be comprised of 14 weeks. Unless otherwise stated, references to particular years, quarters, months and periods refer to our fiscal years ended in January or 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 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 income of $10.0 million for the six months ended June 27, 2026 and net loss of $15.6 million for the six months ended June 28, 2025. As of June 27, 2026, cash, cash equivalents and restricted cash were $40.7 million, total assets were $73.3 million, working capital was $22.1 million, and stockholders’ equity was $23.2 million. We believe our existing balance of cash and cash equivalents (including restricted cash balances), along with cash receipts from revenues, payments pursuant to the Samsung License Agreement (as defined below) (see Note 9), potential borrowing availability, if any, under the 2023 SVB Credit Agreement (as defined below) (see Note 3), proceeds raised from the June 2025 Offering (as defined below) and October 2025 Offering (as defined below) (see Note 6), funds raised through the March 2025 Purchase Agreement (as defined below) (see Note 6), proceeds received from warrant exercises, and other future debt and 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 from the date these condensed consolidated financial statements are issued. This belief reflects our current assessment of known trends and uncertainties that could affect near-term liquidity, including the timing of cash effects from customer advance payments, fluctuations in borrowing base availability and letters of credit usage and market conditions that affect our ability to utilize the March 2025 Purchase Agreement. For the long term (i.e., beyond the next 12 months), based on our current plans and assumptions, we believe our sources of liquidity and access to capital will be adequate to meet our cash requirements as they come due, and we are not currently aware of material cash requirements beyond 12 months other than those described in the Notes to Condensed Consolidated Financial Statements. We anticipate receiving the upfront payment of $200 million pursuant to the Samsung License Agreement in August 2026. ​ Recently Issued Accounting Standards ​ In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which updates expense disclosure requirements on an annual and interim basis. This ASU is effective for the annual periods beginning after December 15, 2026, and the interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of adopting this ASU. ​ 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 27, | ​ | June 28, | ​ | June 27, | ​ | June 28,
​ | ​ | 2026 | ​ | 2025 | ​ | 2026 | ​ | 2025
Expense: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Employee Compensation (1) | ​ | $ | 2,429 | ​ | $ | 1,903 | ​ | $ | 4,517 | ​ | $ | 4,063
Stock-Based Compensation | ​ | ​ | 809 | ​ | ​ | 1,013 | ​ | ​ | 1,765 | ​ | ​ | 1,984
Program Expenses (2) | ​ | ​ | 822 | ​ | ​ | 535 | ​ | ​ | 1,308 | ​ | ​ | 1,116
Professional Fees (3) | ​ | ​ | 16,412 | ​ | ​ | 3,528 | ​ | ​ | 25,612 | ​ | ​ | 10,141
​
| (1) | The amounts consisted of employee compensation related to both cost of goods sold (“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.

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