Note 8—Stock-Based Awards

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On September 9, 2025, our stockholders approved the Netlist, Inc. 2025 Equity Incentive Plan (the “2025 Plan”) at our 2025 Annual Meeting of Stockholders, pursuant to which (i) 2,500,000 shares of our common stock were reserved for issuance pursuant to the 2025 Plan and (ii) up to 4,721,706 shares of common stock may be added to the 2025 Plan attributable to awards granted under the Amended and Restated 2006 Equity Incentive Plan (the “Amended 2006 Plan”) that are forfeited, expire or are cancelled without delivery of shares of common stock or which result in the forfeiture of shares of common stock back to the Company on or after September 9, 2025. The Amended 2006 Plan was terminated on September 9, 2025. As of September 26, 2026, we had 15,000 shares of our common stock reserved for future issuance under the 2025 Plan and no shares of our common stock reserved for future issuance under the Amended 2006 Plan. Stock options granted under the 2025 Plan and 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. The majority of RSUs granted to our employees and consultants generally vest in equal installments annually and fully vest over a four-year term from the grant date.

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On July 1, 2026, we adopted the Netlist, Inc. 2026 Performance Equity Plan (the “2026 Plan”). Pursuant to the terms of the 2026 Plan, we may, under the direction of the Board, make grants of stock options, restricted and unrestricted stock awards and other stock-based awards to employees (including current and future executives), consultants and directors. The 2026 Plan was approved by the Board without stockholder approval. On July 16, 2026, the Board granted Chun K. Hong, our President, Chief Executive Officer and Chairperson of our Board, restricted stock units to be settled in 33,600,000 shares of our common stock pursuant to the 2026 Plan. The restricted stock units will vest in accordance with performance milestones and time-based vesting schedules as described below. No shares of common stock are available for future issuance pursuant to the 2026 Plan.

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Stock Options

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The following table summarizes the activity related to stock options during the nine months ended September 26, 2026:

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Restricted and Performance Stock Units

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The following table summarizes the activity related to RSUs and PSUs during the nine months ended September 26, 2026:

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Chief Executive Officer Performance Equity Award

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The RSUs granted to Mr. Hong on July 16, 2026 under the 2026 Plan (the "Award") consisted of 4,000,000 time-based RSUs and 29,600,000 performance-based RSUs, for a total of 33,600,000 RSUs. The Award is classified as equity. We may withhold shares of common stock to satisfy tax withholding obligations upon vesting. Performance-based RSUs that have not vested by July 16, 2031, or by July 16, 2034 for the tranche with a $30.00 stock price goal, are forfeited.

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The time-based RSUs vest in five equal annual installments beginning August 15, 2027.

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The performance-based RSUs consist of a listing tranche of 2,000,000 RSUs, which vests 180 days after we close an equity financing of at least $50.0 million in gross proceeds while our common stock is listed on a national securities exchange, and four share price and revenue tranches totaling 27,600,000 RSUs, each of which vests when (i) the average closing price of our common stock over 90 consecutive trading days meets the applicable stock price goal, (ii) our revenue for the trailing four fiscal quarters reaches $400.0 million and (iii) the applicable minimum service period from August 15, 2026 has elapsed, subject to certification by the compensation committee.

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The share price and revenue tranches are as follows:

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Unvested RSUs generally are forfeited upon termination of Mr. Hong's service, subject to specified acceleration or continued-eligibility provisions for death, disability, qualifying termination and change of control. Upon death or disability, time-based RSUs scheduled to vest during the following twelve months accelerate and the performance-based RSUs are evaluated as if service continued for one additional year. The listing tranche may vest following a qualifying termination after the equity financing closes. Upon a change of control, certain performance-based RSUs may vest based on satisfaction of the applicable stock price, revenue and financing conditions, while other unvested performance-based RSUs are cancelled. Time-based RSUs may accelerate following a qualifying termination within twelve months after a change of control.

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The grant-date fair value of the time-based RSUs and listing tranche was determined using the closing price of our common stock on the grant date of $2.75 per share. The grant-date fair values of the share price and revenue tranches were estimated using a Monte Carlo simulation model that incorporates the applicable market conditions. Significant valuation assumptions include expected stock price volatility, the risk-free interest rate, expected dividend yield and the applicable performance periods, as summarized below:

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The aggregate grant-date fair value of the Award was $77.4 million, or $2.30 per RSU.

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Stock-based compensation cost for the Award is measured at grant-date fair value and recognized over the requisite service periods of the applicable awards, net of estimated forfeitures. The time-based RSUs are recognized over the applicable service periods associated with their annual vesting installments. The requisite service periods for the share price and revenue tranches range from approximately 1.6 to 4.1 years, reflecting the applicable minimum service periods and the derived service periods estimated using the Monte Carlo simulation. The stock price goals are market conditions reflected in grant-date fair value; failure to achieve a stock price goal, by itself, does not result in reversal of compensation expense if the applicable requisite service has been rendered and other performance conditions are satisfied. We recognize expense for the share price and revenue tranches when achievement of their revenue performance condition is probable. We determined that the revenue goal was probable at the grant date and are recognizing expense for these tranches over their respective requisite service periods. During the three and nine months ended September 26, 2026, we recognized $5.9 million of stock-based compensation expense related to the Award. No RSUs under the Award vested or were forfeited during the period, and the Award is included in the RSU activity table above.

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We reassess the probability of satisfying each applicable performance condition at each reporting date. Changes in our assessments may result in a cumulative adjustment to compensation expense in the period of the change, with any remaining expense recognized over the applicable remaining requisite service period.

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Stock-Based Compensation

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The following table summarizes the stock-based compensation expense by line item in the condensed consolidated statements of operations (in thousands):

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As of September 26, 2026, we had approximately $80.8 million, net of estimated forfeitures, of unearned stock-based compensation, which we expect to recognize over a weighted-average period of approximately 2.7 years related to all nonvested equity stock grants.