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What changed in Enovix Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Enovix Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+479 added−481 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-25)

Top changes in Enovix Corp's 2025 10-K

479 paragraphs added · 481 removed · 335 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

76 edited+42 added−29 removed36 unchanged
Biggest changeProblem 1 — Formation expansion In a conventional graphite anode, lithium atoms slip into the vacant spaces between the graphite layers, forming LiC6, resulting in very little graphite anode swelling during cycling ( 6 Table of Contents If a silicon anode were used in a conventional battery architecture, the pressure of anode swelling would act on the large face of the battery, creating a force as large as 1.7 tons for a battery in a 50mm x 30mm x 3mm size battery.
Biggest changeWe believe our cell architecture uniquely solves these four technical problems to enable 100% active silicon anodes. Problem 1 — Formation expansion In a conventional Li-ion battery that uses a graphite anode, lithium atoms slip into the vacant spaces between the graphite layers during charging, resulting in very little graphite anode swelling during cycling.
We believe we will compete well on each of these factors based on advanced battery innovation to date and the ability to continue to design, develop and manufacture higher performing products for the customers served in our targeted markets.
We believe we will compete well with each of these factors based on advanced battery innovation to date and the ability to continue to design, develop and manufacture higher performing products for the customers served in our targeted markets.
Industry Background Battery Technology Innovation - Historical Overview Sony developed the first Li-ion battery for consumer electronics to power its newly invented handheld video recorder in 1991, which needed smaller and lighter batteries with more energy than those available at the time.
Industry Background Battery Technology Innovation - Historical Overview The first Li-ion battery for consumer electronics was developed by Sony to power its newly invented handheld video recorder in 1991, which needed smaller and lighter batteries with more energy than those available at the time.
A majority of our patents relate to battery architectures, secondary batteries, and related structures and materials. With respect to proprietary know-how that is not patentable and processes for which patents are difficult to enforce, we rely on trade secret protection and confidentiality agreements to safeguard our interests.
A majority of our patents relate to battery architecture, secondary batteries, and related structures and materials. With respect to proprietary know-how that is not patentable and processes for which patents are difficult to enforce, we rely on trade secret protection and confidentiality agreements to safeguard our interests.
IoT – The Internet-of-Things (“IoT”) market includes many types of devices powered by a Li-ion battery, including wearables, health/wellness devices, camera-based devices, power banks, location trackers, portable networking devices, augmented reality/virtual reality devices (“AR/VR”), and computing accessories, among others. Products in this market are often power budget constrained due to size.
IoT — The Internet-of-Things (“IoT”) market includes many types of devices powered by a Li-ion battery, including wearables, health/wellness devices, camera-based devices, power banks, location trackers, portable networking devices, augmented reality/virtual reality devices (“AR/VR”), and computing accessories, among others. Products in this market are often power budget constrained due to their relatively small size.
The CCPA provides for administrative fines of up to $7,500 per violation and allows private litigants affected by certain data breaches to recover significant statutory damages. 12 Table of Contents Foreign data privacy and security laws (including but not limited to the EU GDPR and UK GDPR) impose significant and complex compliance obligations on entities that are subject to those laws.
The CCPA provides for administrative fines of up to $7,500 per violation and allows private litigants affected by certain data breaches to recover significant statutory damages. Foreign data privacy and security laws (including but not limited to the EU GDPR and UK GDPR) impose significant and complex compliance obligations on entities that are subject to those laws.
Current R&D activities include the following: Energy Density and Capacity — Increase the energy density and capacity of batteries by increasing the percent by volume of active cathode material inside the core, minimizing packaging overhead, maximizing the voltage of the cell, using cathode materials with higher specific capacity, and scaling the size of the battery while maintaining battery safety.
Current R&D activities include the following: Volumetric Energy Density and Capacity — Increase the energy density and capacity of batteries by increasing the percentage by volume of active cathode material inside the core, minimizing packaging overhead, maximizing the voltage of the cell, using cathode materials with higher specific capacity, and scaling the size of the battery while maintaining battery safety.
By leveraging both material and design innovations, we aim to push the boundaries of Li-ion battery performance Continuous innovation will allow us to introduce higher-performing battery nodes over time, delivering meaningful performance gains for our customers ahead of market trends.
By leveraging both material and design innovations, we aim to push the boundaries of Li-ion battery performance. Continuous innovation will allow 9 Table of Contents us to introduce higher-performing battery nodes over time, delivering meaningful performance gains for our customers ahead of market trends.
Prospective competitors of ours include major manufacturers currently supplying the mobile device, IoT, defense, EV and battery energy storage systems (“BESS”) industries, and potential new entrants to the industry. Incumbent suppliers of Li-ion batteries include Amperex Technology Ltd., Panasonic Corporation, Samsung SDI, Contemporary Amperex Technology Co. Ltd. and LG-Energy Solution Ltd.
Prospective competitors of ours include major manufacturers currently supplying the mobile device, IoT, defense, EV and battery energy storage systems (“BESS”) industries, and potential new entrants to the industry. Incumbent suppliers of Li-ion batteries include Amperex Technology Limited, Panasonic Corporation, Samsung SDI Co., Ltd., Contemporary Amperex Technology Co., Limited, SK On Co., Ltd., BYD Company Limited, and LG-Energy Solution, Ltd.
Supply Chain Geodiversity — Our manufacturing footprint in Korea and Malaysia aligns with increasing customer demand for geodiversity and supply chain resilience. Research and Development Our global research and development (“R&D”) programs are focused on driving improvements in the performance and cost of our batteries and manufacturing equipment.
Supply Chain Geodiversity — Our manufacturing footprint in Korea and Malaysia aligns with increasing customer demand for geodiversity and supply chain resilience. Research and Development Our global R&D programs are focused on driving improvements in the performance and cost of our batteries and manufacturing equipment.
The principal purposes of our equity incentive plans are to attract, retain and motivate our people through the granting of equity-based compensation awards, in order to increase stockholder value and our success by motivating such individuals to perform to the best of their abilities and achieve Enovix’s objectives. As of December 29, 2024, we employed approximately 570 full-time employees.
The principal purposes of our equity incentive plans are to attract, retain and motivate our people through the granting of equity-based compensation awards, in order to increase stockholder value and our success by motivating such individuals to perform to the best of their abilities and achieve Enovix’s objectives. As of December 28, 2025, we employed approximately 664 full-time employees.
“Formation” is the term for the first charging of the battery, when lithium moves from the cathode, through the separator, to the anode. When fully charged, a silicon anode can more than double in thickness, resulting in significant swelling that can physically damage the battery, causing failure. • Formation efficiency.
“Formation” is the term for the first charging of the battery, when lithium moves from the cathode, through the separator, to the anode. When fully charged, a silicon electrode can grow by more than 60% in thickness, resulting in significant swelling that can physically damage the battery, causing failure. • Formation efficiency.
In the third quarter of 2024, we formally opened Fab2 in Penang, Malaysia and began operating our Agility line at this site. We subsequently commenced shipping EX-1M battery cells to customers from the fully operational 10 Table of Contents Agility line in Malaysia.
In the third quarter of 2024, we formally opened Fab2 in Penang, Malaysia and began operating our Agility line at this site. We subsequently commenced shipping battery cells to customers from the fully operational Agility line in Malaysia.
Warren Avenue, Fremont, CA 94538. Available Information We file or furnish periodic reports and amendments thereto, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, proxy statements and other information with the Securities and Exchange Commission (“SEC”).
Available Information We file or furnish periodic reports and amendments thereto, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, proxy statements and other information with the Securities and Exchange Commission (“SEC”).
There are also several emerging companies investing in developing improvements to conventional Li-ion batteries or new technologies for Li-ion batteries, including silicon anodes and solid-state architectures. Some of these companies have developed relationships with incumbent battery suppliers, automotive OEMs and consumer electronics brands.
There are also several emerging companies investing in developing improvements to conventional Li-ion batteries or new technologies for Li-ion batteries, including silicon anodes and solid-state architecture. Some of these companies have developed relationships with incumbent battery suppliers, automotive OEMs and consumer electronics brands. These emerging companies are also exploring new chemistries for electrodes, electrolytes and additives.
This basic construct of the Li-ion battery has remained unchanged for nearly 30 years. 5 Table of Contents Battery Technology Innovation - Our Approach Historically, advancements in battery performance have been primarily driven by improvements in materials and manufacturing capability.
This basic construct of the Li-ion battery has remained unchanged for over 30 years. 6 Table of Contents Battery Technology Innovation - Our Approach Historically, advancements in battery performance have been primarily driven by improvements in materials and manufacturing processes.
Problems 3 & 4 — Swelling and Cycle Life When conventional Li-ion batteries with graphite anodes are cycled (charged and discharged), they exhibit a modest amount of cyclic swelling ( Our unique structural constraint system applies a uniform engineered pressure on the silicon particles within the anode, limiting their fracture and maintaining electrical contact between them for an extended number of cycles.
Problems 3 & 4 — Swelling and Cycle Life When conventional Li-ion batteries with graphite anodes are cycled (charged and discharged), they exhibit a modest amount of cyclic swelling ( Our structural constraint system is designed to address this issue by applying uniform engineered pressure on the silicon particles within the anode, limiting their fracture and maintaining electrical contact between them for an extended number of cycles.
Following the opening of Fab2 in Malaysia, our corporate functions, and certain sales, operations and engineering activities, are located at our U.S. headquarters, while our manufacturing and research and development activities are conducted primarily in Malaysia, Korea and India. As of December 29, 2024, we operate in one segment.
Following the opening of Fab2, our corporate functions, and certain sales, operations and engineering activities, and research and development activities are located at our U.S. headquarters. Our global manufacturing and research and development activities are conducted primarily in Malaysia, South Korea and India. As of December 28, 2025, we operate in one segment.
These developments further complicate compliance efforts and increase legal risk and compliance costs for us and the third parties upon whom we rely.
These developments further 13 Table of Contents complicate compliance efforts and increase legal risk and compliance costs for us and the third parties upon whom we rely.
The trainings are done online and in person, in brown bag formats and in more formal settings. Building a company where everyone feels that they belong is a priority at Enovix. Our Core Values are reinforced in new hire training, employee engagement activities and everyday interactions. Corporate Information Our principal executive offices are located at 3501 W.
The trainings are done online and in person, in brown bag formats and in more formal settings. Building a company where everyone feels that they belong is a priority at Enovix. Our Core Values are reinforced in new hire training, employee engagement activities and everyday interactions.
Specifically, our cell architecture is well-suited to accommodate the use of a silicon anode and therefore capitalize on the higher energy density it provides, as described below. Silicon has long been heralded as the next important anode material.
As a result, we believe our cell architecture is well-suited to accommodate the use of a silicon anode and therefore capitalize on the higher energy density it provides, as described further below. Uniquely Enabling Silicon Anodes Silicon has long been heralded as the next important anode material.
These losses proportionately reduce the capacity of the battery by removing lithium. During formation of a conventional Li-ion battery with a graphite anode, approximately 5% of the lithium from a lithium cobalt oxide cathode will get permanently trapped in the graphite anode, never to return to the cathode.
During formation of a conventional Li-ion battery with a graphite anode, approximately 5% of the lithium from a lithium cobalt oxide cathode will get permanently trapped in the graphite anode, never to return to the cathode.
Rather than focusing solely on the materials inside the battery, we began development of a novel 3D physical battery design, one that could both improve the packing efficiency of the active materials in the battery, as well as accommodate the use of a 100% active silicon anode.
Therefore, rather than focusing solely on the materials inside the battery, we have developed a novel 3D physical battery design that can both improve the packing efficiency of the active materials in the battery, as well as accommodate the use of a 100% active silicon anode.
Energy requirements continue to become more demanding as original equipment manufacturers (“OEMs”) seek to launch heavy workload applications such as 4K and 7 Table of Contents 8K video upload/download, multi-player gaming, enhanced camera capabilities and on-device AI.
Energy requirements continue to become more demanding as OEMs seek to launch heavy workload applications such as 4K and 8K video upload/download, multi-player gaming, enhanced camera capabilities and on-device AI.
In 2023, we selected a site for Fab2 in Penang, Malaysia at the Penang Science Park. In the third quarter of 2023 we initiated a plan to locate all manufacturing operations in Asia to be closer to customers and suppliers, and transition Fab1 to focus on new product development.
In the third quarter of 2023 we initiated a plan to locate all manufacturing operations in Asia to be closer to customers and suppliers, and transition Fab1 to focus on new product development.
As of December 29, 2024, we had approximately 65 issued U.S. patents, approximately 145 issued foreign patents, approximately 29 public and pending U.S. patent applications and approximately 132 public and pending foreign patent applications. We continually assess the need for patent protection for those aspects of our technology that we believe provide significant competitive advantages.
As of December 28, 2025, we had approximately: 75 issued U.S. patents, 153 issued foreign patents, 37 public and pending U.S. patent applications and 148 public and pending foreign patent applications. We continually assess the need for patent protection for those aspects of our technology that we believe provide significant competitive advantages.
One of Routejade’s key strengths is its in-house pack assembly, serving over 50 global end-user customers with a wide range of customized solutions to meet diverse market demands.
One of our key strengths in this area is our ability to conduct pack assembly in-house, serving global end-user customers with a wide range of customized solutions to meet diverse market demands.
Changes in export controls, tax policy or trade regulations, the disallowance of tax deductions on imported merchandise, or the imposition of new tariffs on imported products, could have an adverse effect on our business and results of operations.
Changes in export controls, tax policy or trade regulations, the disallowance of tax deductions on imported merchandise, or the imposition of new tariffs on imported products, could have an adverse effect on our business and results of operations. Privacy and Security Laws In the ordinary course of our business, we may process personal or sensitive data.
We seek second sources for materials that are high cost or where a risk to supply has been identified. On long-lead items we intend to keep safety stock on hand to mitigate interruptions to supply. Intellectual Property We operate in an industry in which innovation, investment in new ideas and protection of our intellectual property rights are critical for success.
On long-lead items, we intend to keep safety stock on hand to mitigate interruptions to supply. Intellectual Property We operate in an industry in which innovation, investment in new ideas and protection of our intellectual property rights are critical for success.
We have established a learning platform with both internal and external content to provide employees with on demand technical training programs and programs focused on developing soft skills. Our broader training program 13 Table of Contents covers leadership topics, safety and compliance, processes and systems.
We have engaged with top universities in Malaysia and in South Korea to build out a talent pipeline. We have established a learning platform with both internal and external content to provide employees with on demand technical training programs and programs focused on developing soft skills. Our broader training program covers leadership topics, safety and compliance, processes and systems.
We believe that our ability to compete against this set of competitors will be driven by a number of factors, including product performance, cost, reliability, product roadmap, customer relationships and ability to scale manufacturing.
Factors within our control include driving competitive pricing, cost, energy density, safety and cycle life. 12 Table of Contents We believe that our ability to compete against this set of competitors will be driven by a number of factors, including product performance, cost, reliability, product roadmap, customer relationships and ability to scale manufacturing.
Architecture Enables Safety Innovation — Our architecture enables multiple parallel cell-to-busbar connections, which allow us in certain applications to apply a resistor at the busbar junction that can be utilized to regulate current flux in the 9 Table of Contents event of an internal short.
Architecture Enables Safety Innovation — Our architecture enables multiple parallel cell-to-busbar connections, which allow us in certain applications to apply a resistor at the busbar junction that can be utilized to regulate current flux in the event of an internal short. Our BrakeFlow TM system is designed to limit a shorted area from overheating and inhibits thermal runaway.
When first charged, a silicon anode can absorb and permanently trap as much as roughly 40% to 50% of the original lithium in the battery, reducing the battery’s capacity by about 50% to 60%. • Cycle swelling.
When first charged, a silicon anode can absorb and permanently trap a portion of the original lithium in the battery, reducing the battery’s overall capacity. • Cycle swelling.
Benefits of Our Advanced Li-ion Battery Mobile — The Li-ion battery also provided the increase in energy density needed for cell phones to evolve from their original “brick-size” into today’s sleek, sophisticated smartphone.
Key Markets that Can Benefit From Our Advanced Li-ion Battery Mobile — The Li-ion battery was a key factor in the evolution of cell phones in that it provided the increase in energy density needed for cell phones to advance from their original “brick-size” into today’s sleek, sophisticated smartphone.
Safety — Improve battery safety by developing techniques to regulate current flux in the event of a battery short and limit overheating to inhibit thermal runaway. Anodes and Cathodes — Develop batteries with next-generation anodes and cathodes that increase energy density. Cost and Throughput — Develop toolsets and processes to produce batteries with lower cost and higher manufacturing throughput.
Fast Charge — Enable battery charging at a higher rate for reduced charge time, while minimizing heating. Safety — Improve battery safety by developing techniques to regulate current flux in the event of a battery short and limit overheating to inhibit thermal runaway. Anodes and Cathodes — Develop batteries with next-generation anodes and cathodes that increase energy density.
Rather than interleaving and winding long anode, cathode and separator strips into a roll, our founders proposed an architecture in which many short anodes and cathodes were stacked side by side, with a separator between each anode-cathode pair.
In other words, rather than interleaving and winding long anode, cathode and separator strips into a roll, our founders proposed an architecture in which many short anodes and cathodes were stacked side by side, with a separator between each anode-cathode pair. This design improves packing efficiency and enables greater control over mechanical forces within the cell during charging and discharging.
The program is designed, and periodically evaluated, to ensure we continue to motivate, strengthen and empower our workforce. Employee Engagement and Training We are engaged in community building by collaborating with local non-profit organizations in both the U.S. and Asia. We regularly engage with our employees via quarterly All Hands meetings, employee engagement surveys and through team building events.
Our benefits program includes an employee stock purchase plan, paid time off, team building events and talent development opportunities. The program is designed, and periodically evaluated, to ensure we continue to motivate, strengthen and empower our workforce. Employee Engagement and Training We are engaged in community building by collaborating with local non-profit organizations in both the U.S. and Asia.
A silicon anode, by contrast, can have a formation efficiency of roughly 50% to 60%, meaning that about 40% to 50% of the lithium is trapped in the silicon anode during formation and is no longer available for repeated cycling, reducing the battery’s capacity in half. Our cell architecture uniquely enables a practical solution to this problem.
A silicon anode, by contrast, can have a formation efficiency of roughly 85%, meaning that about 15% of the lithium is trapped in the silicon anode during formation and is no longer available for repeated cycling, reducing the battery’s capacity by approximately 10%.
In 2020, we started procuring equipment for our first production line (“Fab1”) at our headquarters in Silicon Valley. We recognized our first production revenue in the second quarter of 2022 from Fab1. In 2023, we identified a facility in Malaysia (“Fab2”) for high-volume production and acquired Routejade, Inc. (“Routejade”), a battery manufacturer in South Korea.
Then in 2020, we began procuring equipment for our first production line (“Fab1”) at our headquarters in Silicon Valley and we recognized our first production revenue in the second quarter of 2022 from Fab1. 5 Table of Contents We expanded our manufacturing capability further in 2023 by identifying and building a facility for high-volume production in Malaysia (“Fab2”) and acquiring Routejade, Inc.
Replacing internal combustion engine vehicles with EVs can reduce emissions that contribute to smog and climate change, but mass adoption of EVs hinges on lower cost vehicles and faster charging times that resemble the gas station experience of filling up quickly. The orientation of the electrodes in our battery allows for significantly higher thermal conductivity, enabling a faster-charging EV battery.
Electric Vehicles — Replacing internal combustion engine vehicles with electric vehicles (“EVs”) can reduce emissions that contribute to air pollution, but mass adoption of EVs hinges on lower cost vehicles and faster charging times that resemble the gas station experience of filling up quickly.
In our manufacturing process, we add an incremental lithium source during packaging which is then diffused into the cell during the formation process. Our Products Our product strategy is built on close collaboration with customers to understand their specific performance requirements such as energy density, cycle life, charge rate, and battery size.
Our Products Our product strategy is built on close collaboration with customers to understand their specific performance requirements such as energy density, cycle life, charge rate, and battery size.
In October 2024, we commenced shipping battery cells from the Agility line and as of the end of 2024, we had completed Site Acceptance Testing (“SAT”) for the Agility and HVM lines.
We now have three manufacturing lines at Fab2: the R&D focused pilot production line, the Agility line and the High-Volume Manufacturing (“HVM”) line. In October 2024, we commenced shipping battery cells from the Agility line and by the end of 2024, we had completed Site Acceptance Testing (“SAT”) for the Agility and HVM lines.
Moreover, the constraint system keeps the anode and cathode materials under constant compression, maintaining excellent particle-to-particle connection. Problem 2 — Formation Efficiency The first time a Li-ion battery is charged or formed, some of the lithium is permanently trapped in undesired side-reactions and surface layers on the anode and cathode particles.
Problem 2 — Formation Efficiency The first time a Li-ion battery is charged or formed, some of the lithium is permanently trapped in undesired side-reactions and surface layers on the anode and cathode particles. These losses proportionately reduce the storage capacity of the battery by removing lithium.
Enovix Roll-to-Stack Cell Assembly — We have designed proprietary tools, produced for us by precision automated equipment suppliers, which incorporate patented methods and processes to achieve precise laser patterning and high-speed roll-to-stack cell assembly. Instead of cutting or punching, electrodes and separators are laser patterned and stacked.
We have designed proprietary tools, produced for us by precision automated equipment suppliers, which incorporate patented methods and processes to achieve precise laser patterning and high-speed “Roll-to-Stack” cell assembly. Instead of cutting or punching electrodes and separators into sheets, an in-line laser is designed to precisely pattern these materials and feed them directly into a high-speed stacking tool.
These efforts have led to significant increases in metrics such as energy density over time, but as the industry moves toward next generation materials, such as silicon anodes, limitations in traditional cell design hinder progress.
While these efforts have led to significant increases in metrics such as energy density over time, the underlying architecture of conventional lithium-ion cells has remained largely unchanged. As the industry moves toward next generation materials, such as silicon anodes, limitations in traditional cell designs increasingly hinder further performance gains.
A silicon anode will swell and shrink when the battery is charged and discharged, respectively, causing damage to both the package and the silicon particles in the anode, which can crack, and further trap lithium on the fresh silicon surfaces exposed by the crack. • Cycle life.
A silicon anode will swell and shrink when the battery is charged and discharged, respectively, causing damage to both the package and the anode electrode, which can progressively increase in thickness, reduce in density, and lose contact to individual particles. • Cycle life.
In 2023, we shifted from a horizontal business strategy, which focused on serving hundreds of customers with standard-sized batteries, to a vertical business strategy targeting a smaller group of large customers that require custom cells. We believe this transition provides the most efficient path to scale while optimizing battery performance for our target applications, including smartphones, computing, and IoT.
In 2023, we shifted from a horizontal business strategy, which focused on serving hundreds of customers with standard-sized batteries, to a vertical business strategy targeting a smaller group of large customers that require custom cells.
Enovix was established in 2006 based on the fundamental premise that improving battery performance would require a reinvention of the battery’s architecture. Our architecture allows us to use 100% active silicon and no graphite in the battery’s anode, which is the negative electrode that stores lithium ions when a battery is charged.
From inception, we have focused on developing a battery architecture that allows the use of 100% active silicon and no graphite in the battery’s anode, which is the negative electrode that stores lithium ions when a battery is charged.
Our cell assembly process has an added step called “pre-lithiation,” in which a thin lithium source is placed on top of the cell, within the package. By electrochemically coupling this lithium source to the electrodes, additional lithium can be dosed into the cell, replenishing the lithium lost during formation.
Our cell architecture and assembly process are designed to address this problem through an added step called “pre-lithiation,” in which an additional thin lithium source is placed on top of the cell, within the package.
Approximately 18% of our employees are located in the United States, and 82% of our employees are located in Asia Pacific, which includes South Korea, Malaysia, India and China. Culture and Benefits Our people are our greatest asset. We strive to live up to our Core Values every day: integrity, respect, innovation, resilience, excellence and customer focus.
Approximately 12% of our employees are located in the United States, and 88% of our employees are located in Asia Pacific, which includes South Korea, Malaysia, India and China. Culture and Benefits Our people are our greatest asset.
Users are now demanding higher performance from their portable PCs to accommodate everything from gaming to enterprise applications such as video conferencing. Ultimately users want “always on, all day” battery life, like that which they experience with their smartphones. Increased energy density is needed for this task, along with enabling more power-hungry features and AI.
Computing — The Li-ion battery can also be credited for helping to usher in an era of portable PC computing. Users are now demanding higher performance from their portable PCs to accommodate everything from gaming to enterprise applications such as video conferencing. Ultimately users want “always on, all day” battery life, like that which they experience with their smartphones.
In August 2024, we officially opened our Fab2 production facility, located at the Penang Science Park in Malaysia. We have three manufacturing lines at Fab2, including the R&D focused pilot production line, the Agility line and the High-Volume (“HVM”) line.
In 2024, we relocated our Fab1 R&D pilot line equipment from our Silicon Valley headquarters and officially opened our Fab2 production facility at the Penang Science Park in Malaysia.
Our proprietary cell architecture enables use of silicon instead of graphite as the cycling material to achieve 100% active silicon anode that increases energy density and battery capacity. Proprietary Manufacturing Process — In order to commercialize our unique architecture, we invented a customized manufacturing process that is not available “off-the-shelf” to conventional battery cell OEMs.
Our architecture allows us to capitalize on innovation in the Li-ion materials supply chain while maintaining our advantage with a 100% active silicon anode. Proprietary Manufacturing Process — In order to commercialize our unique architecture, we invented a customized manufacturing process that is not available “off-the-shelf” to conventional battery cell OEMs.
The FLPB and ASDB series utilize encapsulation technology—FLPB providing structural safety and ASDB maximizing design flexibility for compact devices—both primarily used in wearables and medical applications. The SLPB series features high C-Rate Z-Folding batteries optimized for high-power applications in the medical, industrial, aviation, and defense markets.
The three main product categories produced out of this facility consist of: (i) the Power Disk (“PD”) series made up of rechargeable coin cells commonly used in healthcare and IoT applications (ii) the Flexible Lithium-ion Polymer Battery (“FLPB”) and Asymmetric Designed Battery (“ASDB”), series utilize encapsulation technology — FLPB providing structural safety and ASDB maximizing design flexibility for compact devices—both primarily used in wearables and medical applications, and (iii) the Superior Lithium-ion Polymer Battery (“SLPB”) series, which features high C-Rate Z-Folding batteries optimized for high-power applications in the medical, industrial, aviation, and defense markets.
An in-line laser precisely patterns the electrodes and separators, which are then fed directly to a high-speed stacking tool. Battery Packaging and Formation — Our battery uses the same battery packaging and formation process as a conventional Li-ion battery with the exception of the pre-lithiation process noted above.
Battery Packaging and Formation — Our battery uses the same battery packaging and formation process as a conventional Li-ion battery with the exception of the pre-lithiation process noted above. In our manufacturing process, we add an incremental lithium source during packaging which is then diffused into the cell during the formation process.
We directly engage with OEMs to fine-tune our battery technology for maximum performance within the constraints of their devices. To achieve this, we develop battery "nodes" that share a common set of active materials and mechanical design, enabling us to produce batteries in various sizes.
To achieve this, we develop battery "nodes" that share a common set of active materials and mechanical design, enabling us to produce batteries in various sizes. Our technology roadmap is built around a structured progression of these nodes, with each new generation delivering substantial improvement in energy density.
This will help mitigate technology and production risks as we look to commercialize our product for the EV market. Home Grown IP — Unlike many advanced battery startups, which have licensed core technology from government or academic research laboratories, we have developed and own all our intellectual property. We received our first patents in 2011.
Applications cover a range of portable electronic products, including wearables, mobile handsets and laptop computers. 10 Table of Contents Home Grown IP — Unlike many advanced battery startups, which have licensed core technology from government or academic research laboratories, we have developed and own all our intellectual property. We received our first patents in 2011.
Cycle swelling is thus kept under 2%, outperforming even conventional graphite anodes. Our cells that have been cycled over 500 times show minimal expansion by contrast. By addressing swelling, our cell architecture with its constraint system is designed to enable silicon anodes to achieve a minimum of 500 complete charge/discharge cycles to 80% remaining capacity.
Cycle swelling is thus kept to a relatively low percentage as compared to graphite / silicon blended electrodes and even 100% graphite anodes. By addressing swelling, the constraint system in our cell architecture is designed to enable silicon anodes to achieve a minimum of 1,000 complete charge/discharge cycles to 80% remaining capacity.
The battery industry has historically struggled to incorporate more than a small amount of silicon in the anode because silicon can swell and crack in conventional architectures, impacting safety and performance. By contrast, our architecture is designed to accommodate silicon’s swelling and apply stack pressure that alleviates the cracking problem.
Silicon can theoretically store more than twice as much lithium as graphite, but the battery industry has historically struggled to incorporate more than a small amount of silicon in the anode because it can swell and crack in conventional battery architectures, impacting safety, cycle life and overall performance.
Our BrakeFlow TM system is designed to limit a shorted area from overheating and inhibits thermal runaway. Architecture Enables Fast Charge — We demonstrated a 0-80% state-of-charge in 5.2 minutes and a 0-98% state-of-charge in just under 10 minutes on 0.27Ah test cells.
Architecture Enables Fast Charge — We demonstrated a 0-80% state-of-charge in 5.2 minutes and a 0-98% state-of-charge in just under 10 minutes on 0.27Ah test cells. This fast charging is enabled by the fact that heat only has to travel a small distance from the center of our electrodes to the stainless steel constraint on the exterior.
These activities help advance employees’ cultural awareness and social responsibility and promote employee wellness and safety, as well as facilitate a collaborative and transparent working environment. We have engaged with top universities in Malaysia to build out a talent pipeline.
We regularly engage with our employees via quarterly All Hands meetings, employee engagement surveys and through team-building events. These activities help advance employees’ cultural awareness and social responsibility and promote employee wellness and safety, as well as facilitate a collaborative and transparent working environment.
Because these anode faces are small in area, this same 1,500 psi pressure, therefore, creates a force of only 210 pounds in the same size battery. To manage this force, we invented a very thin (50-micron) stainless steel constraint system to surround the battery. This constraint system limits the battery from swelling and growing in size.
To manage this force, we invented a stainless steel constraint system to surround the battery. We believe this constraint system limits the battery from swelling and growing in size.
We have devoted significant funds and resources to develop our battery’s architecture and the unique patterning and stacking assembly process for manufacturing our cells. This was done in conjunction with partnership and investment from several strategic partners in the solar and semiconductor industries. Since 2018, we have sampled batteries to customers that have validated the performance of our products.
We have devoted significant funds, time and resources to develop our proprietary architecture and the unique patterning and stacking assembly process for manufacturing our cells. This development was supported by partnerships and investments from several strategic participants in the solar and semiconductor industries, whose experience in precision manufacturing and scalable production informed our approach.
We then use our own proprietary tools on steps such as cell assembly where we laser pattern and stack the electrodes and then apply a stainless steel constraint. Standard Li-ion battery production involves: 1) electrode fabrication, 2) cell assembly and 3) battery packaging and formation.
We use conventional Li-ion battery cell manufacturing techniques for key steps such as electrode coating, cell packaging, testing and aging, while incorporating our own proprietary tools and processes in critical stages of cell assembly. Standard Li-ion battery production involves: 1) electrode fabrication, 2) cell assembly and 3) battery packaging and formation.
Mechanical Design — Improve energy density, cycle life, safety, manufacturability and yield. EV Batteries — Develop batteries targeted to the unique requirements of the EV industry. Manufacturing and Supply Chain We historically manufactured batteries at our Fab1 manufacturing facility at our headquarters in Fremont, California.
Cost and Throughput — Develop toolsets and processes to produce batteries with lower cost and higher manufacturing throughput. Employ Design for Manufacturability (DFM) methodology to improve yield, cost, and throughput. Mechanical Design — Improve energy density, cycle life, safety, manufacturability and yield. EV Batteries — Develop batteries targeted to the unique requirements of the EV industry.
In addition, we completed SAT for our second generation (“Gen2”) HVM line in late December 2024 and began sampling EX-2M battery cells to smartphone customers. We source materials for our batteries from third party suppliers globally. We have executed master supply agreements with many of our suppliers and have qualified second sources for certain of our battery materials.
We source materials for our batteries from third party suppliers globally. We have executed master supply agreements with many of our suppliers and have qualified second sources for certain of our battery materials. We seek second sources for materials that are high cost or where a risk to supply has been identified.
In 2023, we acquired Routejade, a leading battery manufacturer in South Korea that supplies batteries for wearables, medical devices, headsets, activity trackers, and industrial equipment. Routejade's patented encapsulation technology provides for design flexibility and structural safety, enabling high-energy-density Li-ion batteries primarily for IoT and wearable applications.
Our patented encapsulation technology provides for design flexibility and structural safety, enabling high-energy-density Li-ion batteries primarily for IoT and wearable applications. We also now produce high-power batteries in our South Korean facility using Z-Folding technology, serving customers in the medical, industrial, aviation, and defense sectors.
We could not be where we are today without the dedication of our workforce, and we prioritize pathways for career development, employee feedback and competitive compensation and benefits packages. Our benefits program includes an employee stock purchase plan, paid time off, team building events and talent development opportunities.
Our Core Values are also displayed in conference rooms at Enovix offices globally and are reinforced in new hire training and rewards and recognition programs. We could not be where we are today without the dedication of our workforce, and we prioritize pathways for career development, employee feedback and competitive compensation and benefits packages.
These emerging companies are also exploring new chemistries for electrodes, electrolytes and additives. 11 Table of Contents Our ability to compete successfully will rely on factors both within and outside our control, including broader economic and industry trends. Factors within our control include driving competitive pricing, cost, energy density, safety and cycle life.
Our ability to compete successfully will rely on factors both within and outside our control, including broader economic and industry trends.
Just as it was 30 years ago, a significant increase in battery energy density will enable OEMs to continue improving user experience, functionality and battery life while keeping devices sizes small enough to fit in a pocket. Computing — The Li-ion battery can also be credited for helping to usher in an era of portable PC computing.
Providing a significant increase in battery energy density enables smartphone OEMs to continue improving user experience and functionality without negatively impacting battery life, all while keeping devices small enough to fit in a pocket.
Sony’s battery division adapted its existing magnetic recording tape production equipment to make batteries: 1) to mix chemical anode and cathode slurries, 2) to coat them onto metal foil current collectors, 3) to “calender” (flatten) the surface, 4) to slit the coated metal foil into electrode sheets and 5) to roll them up for packaging in cylindrical metal cans.
Electrode Fabrication — Electrodes for conventional Li-ion batteries are produced by: 1) mixing anode and cathode materials into slurries, 2) coating them onto metal foil current collectors, 3) “calendering” (i.e. flattening) the coated foil, 4) slitting it into electrode sheets, and 5) rolling them up for packaging in cylindrical metal cans.
This fast charging is enabled by the fact that heat only has to travel a small distance from the center of our electrodes to the stainless steel constraint on the exterior. Customer Tested in Multiple Form Factors — We have sampled pilot-production cells in several different sizes as part of product development programs.
Customer Tested in Multiple Form Factors — We have sampled cells in several different sizes as part of product development programs.
Cycle Life and Temperature — Improve the cycle life and high and low temperature performance of batteries by developing new electrolyte chemistries. Fast Charge — Enable battery charging at a higher rate for reduced charge time, while minimizing heating.
Gravimetric Energy Density — Increase the energy while reducing the relative weight for drone applications using the SLPB platform. Cycle Life and Temperature — Improve the cycle life and high and low temperature performance of batteries by developing new electrodes, electrolyte chemistries, and cell designs.
While there have been process improvements over the years, electrodes for conventional Li-ion batteries are still fabricated using this standard method developed almost 30 years ago. In 2023, we acquired Routejade to bring this electrode fabrication capability in-house.
This standard method has largely remained the same since it was developed over 30 years ago. In 2023, we acquired Routejade to bring this electrode fabrication capability in-house. Cell Assembly — Traditional Li-ion cells are assembled using “Jelly Roll” or “Cut-and-Stack ” configurations, depending on the intended use and size requirements.
Item 1. Business Company Overview Enovix Corporation (the “Company,” “we,” “us,” “our” and “Enovix”) is on a mission to deliver high-performance batteries that unlock the full potential of technology products.
Item 1. Business Company Overview Enovix Corporation (the “Company,” “we,” “us,” “our” and “Enovix”) is a global high-performance battery company focused on designing, developing, manufacturing, and commercializing advanced Lithium-ion, or Li-ion, batteries, including proprietary silicon-anode architectures, for smartphones, smart eyewear, defense, industrial and emerging edge-AI applications.
The acquisition of Routejade allowed us to vertically integrate electrode coating and battery pack manufacturing and expand our battery offerings to include conventional graphite battery technology to service the IoT, industrial and defense markets. Between May and July of 2024, we relocated our Fab1 R&D pilot line equipment to Fab2 in Malaysia.
(“Routejade”), a battery manufacturer in South Korea. The Routejade acquisition enabled us to vertically integrate electrode coating and battery pack manufacturing and expand our product offerings to include lithium-ion battery technologies, including silicon-doped graphite solutions, for defense and industrial applications.
Removed
We do this by designing, developing, manufacturing, and commercializing next generation Lithium-ion, or Li-ion, battery cells that significantly increase the amount of energy density and storage capacity relative to conventional battery cells. Our battery’s mechanical design, or “architecture,” allows us to use high performance chemistries while enabling safety and charge time advantages.
Added
Our proprietary silicon-anode battery architecture enables higher energy density and performance relative to conventional battery cells, particularly in space-constrained devices. Our battery’s mechanical design, or “architecture,” allows us to use high performance chemistries while maintaining safety and reliability, supporting commercialization opportunities across various consumer and industrial markets.
Removed
Enhanced batteries for the mobile, IoT and defense sectors enable the development of devices that can accommodate user preferences for more advanced features and a slimmer design. Electric Vehicles (“EVs”) that use advanced batteries charge faster with lower system costs.
Added
Battery performance has become a critical constraint for modern electronic devices as they continue to incorporate slimmer designs with greater functionality, longer runtime, and higher power needs.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur business depends on the continued supply of certain materials for our products and we expect to incur significant costs related to procuring materials required to manufacture and assemble our batteries. The cost of our batteries depends in part upon the prices and availability of raw materials such as lithium, silicon, graphite, nickel, cobalt, copper and/or other metals.
Biggest changeIncreases in raw material costs and supply disruptions resulting from global market and geopolitical conditions could increase our product costs and adversely affect our business and results of operations. Our manufacturing processes depend on raw materials such as lithium, silicon, graphite, nickel, cobalt, copper and other metals, the prices and availability of which are subject to significant volatility and uncertainty.
Further, the integration work may result in the delay in the scaling up of production or result in additional costs to our battery cells, particularly if we encounter issues with performance or if we are unable to customize products for certain of our customers.
Further, integration work may result in the delay in the scaling up of production or result in additional costs to our battery cells, particularly if we encounter issues with performance or if we are unable to customize products for certain of our customers.
If we incur more debt, it will result in increased fixed obligations and could also subject us to covenants or other restrictions that would impede our ability to flexibly operate our business. Fluctuations in foreign currency exchange rates or interest rates have had, and could continue to have, an adverse impact on our financial condition and results of operations.
If we incur more debt, it will result in increased fixed obligations and could also subject us to covenants or other restrictions that would impede our ability to flexibly operate our business. Fluctuations in foreign currency exchange rates and interest rates have had, and could continue to have, an adverse impact on our financial condition and results of operations.
We develop lithium-ion battery cells for industrial and consumer equipment and intend to supply these lithium-ion battery cells for industrial and consumer applications. Historically, lithium-ion batteries in laptops and cellphones have been reported to catch fire or vent smoke and flames, and more recently, news reports have indicated that several EVs that use high-power lithium-ion batteries have caught on fire.
We develop lithium-ion battery cells for industrial and consumer equipment and intend to supply these lithium-ion battery cells for industrial and consumer applications. Historically, lithium-ion batteries in laptops and cellphones have been reported to catch fire or vent smoke and flames, and more recently, news reports have indicated that several EVs that use high-power lithium-ion batteries caught on fire.
While it is difficult to anticipate the impact of any of the foregoing on the Company, such conflicts, and any similar future conflicts, including as a result of rising tensions between China and Taiwan, and actions taken in response to the conflict, could increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition and results of operations.
While it is difficult to anticipate the impact of any of the foregoing on the Company, such conflicts, and any similar future conflicts, including as a result of rising tensions between China and Taiwan, and actions taken in response to any conflict, could increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition and results of operations.
Further, should we have to replace our single supplier, or renegotiate the terms of our current supplier agreement, we may be unable to establish or obtain competitively favorable terms, which would also negatively impact our revenues and profit margin under our defense customer contracts.
Should we have to replace our single supplier, or renegotiate the terms of our current supplier agreement, we may be unable to establish or obtain competitively favorable terms, which would also negatively impact our revenues and profit margin under our defense customer contracts.
We will require significant capital to develop and grow our business and expect to incur significant expenses, including those relating to raw material procurement, leases, sales and distribution as we build our brand and market our batteries, and general and administrative costs as we scale our operations.
We require significant capital to develop and grow our business and expect to incur significant expenses, including those relating to raw material procurement, leases, sales and distribution as we build our brand and market our batteries, and general and administrative costs as we scale our operations.
If the Nasdaq Global Select Market delists our securities from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock; • a limited amount of analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
If the Nasdaq Global Select Market delists our securities from trading on its exchange for failure to meet the listing standards, we and our stockholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; 38 Table of Contents • a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our common stock; • a limited amount of analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
Producing lithium-ion batteries that meet the requirements for wide adoption by industrial and consumer applications is a difficult undertaking. We are still in the early stage of commercialization and face significant challenges achieving the long-term energy density targets for our products and producing our products in commercial volumes.
Producing lithium-ion batteries that meet the requirements for wide adoption by industrial and consumer applications is a difficult undertaking. We are still in the early stages of commercialization and face significant challenges achieving the long-term energy density targets for our products and producing our products in commercial volumes.
We intend to improve productivity and reduce the costs of our production lines relative to the first line we built. In addition, we are planning continuous productivity improvements going forward. If we are unable to achieve these targeted rates or productivity improvements, our business will be adversely impacted.
We intend to improve productivity and reduce the costs of our production lines compared to the first line we built. In addition, we are planning continuous productivity improvements going forward. If we are unable to achieve these targeted rates or productivity improvements, our business will be adversely impacted.
For example, we rely on a single supplier for components to manufacture products for our defense customers and any disruption in the supply of components would negatively impact our ability to perform under such contracts and significantly negatively impact our revenues and profit margin.
In addition, we rely on a single supplier for components to manufacture products for our defense customers and any disruption in the supply of components would negatively impact our ability to perform under such contracts and significantly negatively impact our revenues and profit margin.
If one of our products were to cause personal injury or property damage, including as a result of product malfunctions, defects or improper installation leading to a fire or other hazardous condition, we may become subject to product liability claims, even those without merit, which could harm our business, prospects, 38 Table of Contents operating results and financial condition.
If one of our products were to cause personal injury or property damage, including as a result of product malfunctions, defects or improper installation leading to a fire or other hazardous condition, we may become subject to product liability claims, even those without merit, which could harm our business, prospects, operating results and financial condition.
If we are not able to maintain the requirements of Section 404(a) in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, 27 Table of Contents which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our securities.
If we are not able to maintain the requirements of Section 404(a) in a timely manner or with adequate compliance, we may not be able to assess whether our internal controls over financial reporting are effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our securities.
For example, we may issue debt or equity securities under our shelf registration statement filed with the SEC in August 2023, including in an at-the-market (“ATM”) offering under our ATM facility, or we may issue debt or equity securities in private transactions.
We may issue debt or equity securities under our shelf registration statement filed with the SEC in August 2023, including in an at-the-market (“ATM”) offering under our ATM facility, or we may issue debt or equity securities in private transactions.
If our securities are not listed on, or for any reason become delisted from, the Nasdaq Global Select Market and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities 36 Table of Contents exchange, the liquidity and price of our securities will be adversely affected.
If our securities are not listed on, or for any reason become delisted from, the Nasdaq Global Select Market and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of our securities will be adversely affected.
The trading price of our common stock is subject to wide fluctuations in response to various factors, many of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade at prices significantly below the price you paid.
The trading price of our common stock is subject to wide fluctuations in response to various factors, many of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our 36 Table of Contents securities and our securities may trade at prices significantly below the price you paid.
While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring such a claim arising under the Securities Act against us or our directors, officers or other employees in a venue other than in U.S. federal district courts.
While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring such a claim arising 39 Table of Contents under the Securities Act against us or our directors, officers or other employees in a venue other than in U.S. federal district courts.
All of these factors can add further risk to business conducted with these potential customers. We may not be able to accurately estimate the future supply and demand for our batteries, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue.
All of these factors can add further risk to business conducted with these potential customers. 22 Table of Contents We may not be able to accurately estimate the future supply and demand for our batteries, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue.
Due to the concurrent jurisdiction for federal and 37 Table of Contents state courts created by Section 22 of the Securities Act over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, there is uncertainty as to whether a court would enforce the exclusive form provision.
Due to the concurrent jurisdiction for federal and state courts created by Section 22 of the Securities Act over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, there is uncertainty as to whether a court would enforce the exclusive form provision.
Although we have limited experience with acquisitions, we may in the future undertake acquisitions of other companies, products or technologies for the ongoing development and expansion of our operations. We may be unable to identify suitable acquisition candidates and/or complete acquisitions on favorable terms, if at all.
Although we have limited experience with acquisitions, we may in the future undertake acquisitions of other companies, products or technologies for the ongoing development and expansion of our operations. We may be unable to identify suitable acquisition candidates and/or 24 Table of Contents complete acquisitions on favorable terms, if at all.
This reclassification could be required even if no noteholders or holders of Affiliate Notes convert their Convertible Senior Notes or Affiliate Notes, respectively, following the satisfaction of those conditions and could materially reduce our reported working capital. The capped call transactions may affect the value of the Convertible Senior Notes and our common stock.
This reclassification could be required even if no noteholders or holders of Affiliate Notes convert their Convertible Senior Notes or Affiliate Notes, respectively, following the satisfaction of those conditions and could materially reduce our reported working capital. 32 Table of Contents The capped call transactions may affect the value of the Convertible Senior Notes and our common stock.
We have previously, and may in the future, pay cash, incur debt or issue equity securities to pay for any such acquisition, any of which could negatively affect our financial condition or the value of our capital stock. The sale of our 23 Table of Contents equity to finance any such acquisitions could result in dilution to our stockholders.
We have previously, and may in the future, pay cash, incur debt or issue equity securities to pay for any such acquisition, any of which could negatively affect our financial condition or the value of our capital stock. The sale of our equity to finance any such acquisitions could result in dilution to our stockholders.
Department of the Treasury issues regulations that narrow the application of this provision to a smaller subset of our research and development expenses or the provision is deferred, modified, or repealed by Congress, it could harm our future operating results by effectively increasing our future tax obligations.
Unless the U.S. Department of the Treasury issues regulations that narrow the application of this provision to a smaller subset of our research and development expenses or the provision is deferred, modified, or repealed by Congress, it could harm our future operating results by effectively increasing our future tax obligations.
Moreover, the expiration, termination, or renegotiation of contracts, whether from the integration of these customers as a result of the acquisition or otherwise, could lead to uncertainty and volatility in our revenue stream. Lack of diversification increases our susceptibility to adverse events affecting our key customers.
Lack of diversification increases our susceptibility to adverse events affecting our key customers. For example, the expiration, termination, or renegotiation of contracts, whether from the integration of these customers as a result of the acquisition or otherwise, could lead to uncertainty and volatility in our revenue stream.
For example, the indenture governing the Convertible Senior Notes will require us to repurchase the Convertible Senior Notes for cash upon the occurrence of a fundamental change and, in certain circumstances, to increase the conversion rate for a holder that converts its notes in connection with a make-whole fundamental change.
For example, the indenture governing the Convertible Senior Notes will require us to 31 Table of Contents repurchase the Convertible Senior Notes for cash upon the occurrence of a fundamental change and, in certain circumstances, to increase the conversion rate for a holder that converts its notes in connection with a make-whole fundamental change.
We cannot assure you that any backup systems will be adequate to protect us from the effects of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events.
We cannot assure you that any backup systems will be adequate to protect us from the effects of fire, floods, typhoons, earthquakes, 42 Table of Contents power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events.
We cannot be certain that additional capital will be available on attractive terms, if at all, when needed, which could be dilutive to stockholders, and our financial condition, results of operations, business and prospects could be materially and adversely affected.
We cannot be certain that additional capital will be available on attractive 30 Table of Contents terms, if at all, when needed, which could be dilutive to stockholders, and our financial condition, results of operations, business and prospects could be materially and adversely affected.
A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future. 35 Table of Contents Furthermore, short sellers may engage in manipulative activity intended to drive down the market price of target company stock.
A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future. Furthermore, short sellers may engage in manipulative activity intended to drive down the market price of target company stock.
If we fail to achieve some or all of the expected benefits of any restructuring plans, including the 2024 Restructuring Plan, which may be impacted by factors outside of our control, our business, operating results, and financial condition could be adversely affected.
If we fail to achieve some or all of the expected benefits of any restructuring plans, which may be impacted by factors outside of our control, our business, operating results, and financial condition could be adversely affected.
To be safely transported (by air, sea, rail or roadways), they must meet various international, national, state and local authorities, including, for example, the provisions laid out in United Nations standard UN 38.3. This standard applies to batteries transported either on their own or installed in a device.
To be safely transported (by air, sea, rail or roadways), they must meet various international, national, state and local authorities, including, for example, the provisions laid out in United Nations standard UN 38.3. This standard applies to batteries 35 Table of Contents transported either on their own or installed in a device.
(“RSVAC”), RSVAC issued and sold 6,000,000 private placement warrants (the “Private Placement Warrants”) to Rodgers Capital, LLC, which entity subsequently distributed the Private Placement Warrants to its Series B Unit holders. Each Private Placement Warrant is exercisable for one share of common stock at an exercise price of $11.50 per share.
(“RSVAC”), RSVAC issued and sold 6,000,000 private placement warrants (the “Private Placement Warrants”) to Rodgers Capital, LLC, which entity subsequently distributed the Private Placement Warrants to its Series B Unit holders. Each Private Placement Warrant is exercisable for one share of common stock at an exercise price of $10.66 per share.
We may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in substantial increase in our revenue, which would further increase our losses. If we are unable to develop our business and effectively commercialize our products as anticipated, we may not be able to generate revenue or achieve profitability.
We may find that these efforts are more expensive than we currently anticipate or that these efforts may not result in substantial increase in our revenue, which would further increase our losses. 23 Table of Contents If we are unable to develop our business and effectively commercialize our products as anticipated, we may not be able to generate revenue or achieve profitability.
Our long-term financial model assumes we expand both on our own and by partnering with other battery companies. Should we not be able to achieve these partnering goals we would have to expand purely on our own. This would require additional capital and could impact how fast we can ramp revenue and achieve profitability.
Our long-term financial model assumptions include both expanding on our own and by partnering with other battery companies. Should we not be able to achieve these partnering goals, we would have to expand purely on our own. This would require additional capital and could impact how fast we can ramp revenue and achieve profitability.
If any of the analysts who currently cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our securities would likely decline.
If any of the analysts who currently cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our 37 Table of Contents competitors, the price of our securities would likely decline.
Further, if we are unable to improve our energy density at a rate faster than the industry, our competitive advantage will erode. In addition, if we fail to produce batteries in large scale volume production at reduced unit cost, it may negatively impact our competitive advantage in the industry.
Further, if we are unable to improve our energy density at a rate faster than the industry, our competitive 26 Table of Contents advantage will erode. In addition, if we fail to produce batteries in large scale volume production at reduced unit cost, it may negatively impact our competitive advantage in the industry.
In addition, even if we are able to achieve volume production for the existing uses of our batteries, we may face challenges relating to the scaling up of production for new uses of our batteries, including in the EV market. Our large-scale Gen2 manufacturing lines require large-scale machinery.
In addition, even if we are able to achieve volume production for the existing uses of our batteries, we may face challenges relating to the scaling up of production for new uses of our batteries, including in the EV market and the market for AI-powered devices. Our large-scale Gen2 manufacturing lines require large-scale machinery.
Instead, an entity would account for convertible debt or convertible preferred stock 30 Table of Contents securities as a single unit of account, unless the conversion feature requires bifurcation and recognition as derivatives.
Instead, an entity would account for convertible debt or convertible preferred stock securities as a single unit of account, unless the conversion feature requires bifurcation and recognition as derivatives.
In addition, if we are unable to deliver our engineering services on a timely basis, 22 Table of Contents we may be unable to attract and engage new or existing customers for engineering service contracts and we may not be able to generate revenue or attain profitability.
In addition, if we are unable to deliver our engineering services on a timely basis, we may be unable to attract and engage new or existing customers for engineering service contracts and we may not be able to generate revenue or attain profitability.
As discussed in the consolidated financial statements, in Part II, Item 8 of this Annual Report on Form 10-K, we are not profitable and have incurred losses in each year since our inception.
As discussed elsewhere in these risk factors and in the consolidated financial statements, in Part II, Item 8 of this Annual Report on Form 10-K, we are not profitable and have incurred losses in each year since our inception.
If an Option Counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transaction with such Option 31 Table of Contents Counterparty.
If an Option Counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the capped call transaction with such Option Counterparty.
If these lower costs 25 Table of Contents materialize and enable competitive products to be sold into our markets at prices that, if applied to us, would cause us to become unprofitable, our ability to continue operating could be threatened.
If these lower costs materialize and enable competitive products to be sold into our markets at prices that, if applied to us, would cause us to become unprofitable, our ability to continue operating could be threatened.
We may not be able to fully realize the anticipated profits or other benefits of any particular transaction in the timeframe we expect or at all due to competition, market trends, additional costs or investments, the actions of advisors, suppliers or other third parties, or other factors.
We may not be able to fully realize the anticipated profits or other benefits of any particular transaction in the timeframe we expect or at all due to competition, market trends, additional costs or investments, the actions of advisors, suppliers or other third parties, or other factors. Future acquisitions may result in significant costs and expenses.
For example, the Crowdstrike-Microsoft outage in July 2024 caused temporary 39 Table of Contents disruptions to our systems and servers at our U.S., Malaysia and India locations.
For example, the Crowdstrike-Microsoft outage in July 2024 caused temporary disruptions to our systems and servers at our U.S., Malaysia and India locations.
There is no guarantee that our efforts to protect our computer systems will be effective. In addition, existing intellectual property laws and contractual remedies may afford less protection than needed to safeguard our intellectual property portfolio. Patent, copyright, trademark and trade secret laws vary significantly throughout the world.
There is no guarantee that our efforts to protect our computer systems will be effective. In addition, existing intellectual property laws and contractual remedies may afford less protection than needed to safeguard our intellectual property portfol io. 33 Table of Contents Patent, copyright, trademark and trade secret laws vary significantly throughout the world.
The amount of capital that we will be required to raise, and our ability to raise substantial additional capital, will depend on many factors, including, but not limited to: • our ability and the cost to develop our new and complex manufacturing process that will produce lithium-ion batteries in a cost-effective manner; • our ability to continue to build-out and scale our Malaysia manufacturing facility in a timely and cost-effective manner; • our ability to locate and acquire new, larger manufacturing facilities on commercially reasonable terms; • our ability to build out our new, larger manufacturing facilities in a cost-effective manner; 28 Table of Contents • the cost of preparing to manufacture lithium-ion batteries on a larger scale; • the costs of commercialization activities including product sales, marketing, manufacturing and distribution; • our ability to hire additional personnel; • the demand for our lithium-ion batteries and the prices for which we will be able to sell our lithium-ion batteries; • the emergence of competing technologies or other adverse market developments; and • volatility in the equity markets, including as a result of rising interest rates, inflation or war or other armed conflict, such as Russia’s invasion of Ukraine.
The amount of capital that we will be required to raise, and our ability to raise substantial additional capital, will depend on many factors, including, but not limited to: • our ability and the cost to develop our new and complex manufacturing process that will produce lithium-ion batteries in a cost-effective manner; • our ability to continue to scale our Malaysia manufacturing facility in a timely and cost-effective manner; • our ability to locate and acquire new, larger manufacturing facilities on commercially reasonable terms; • our ability to build out our new, larger manufacturing facilities in a cost-effective manner; • the cost of preparing to manufacture lithium-ion batteries on a larger scale; • the costs of commercialization activities including product sales, marketing, manufacturing and distribution; • our ability to hire additional personnel; • the demand for our lithium-ion batteries and the prices for which we will be able to sell our lithium-ion batteries, including as may be affected by the recent imposition of new and increased tariffs and global trade disruptions; • the emergence of competing technologies or other adverse market developments; and • volatility in the equity markets, including as a result of global trade disruptions, the imposition of new and increased tariffs, rising interest rates, inflation or war or other armed conflict.
Our insurance coverage may not be adequate to protect us from all business risks. We may be subject, in the ordinary course of business, to losses resulting from products liability, accidents, acts of God and other claims against us, for which we may have no insurance coverage.
We may be subject, in the ordinary course of business, to losses resulting from products liability, accidents, acts of God and other claims against us, for which we may have no insurance coverage.
We have acquired and may continue to acquire other businesses, which could require significant management attention, disrupt our business, and dilute stockholder value. In October 2023, we acquired Routejade, a manufacturer of lithium-ion batteries in South Korea.
We have acquired and may continue to acquire other businesses, which could require significant management attention, disrupt our business, and dilute stockholder value . In October 2023, we acquired Routejade, a manufacturer of lithium-ion batteries in South Korea, and in April 2025, acquired a second manufacturing facility in South Korea from SolarEdge.
The unavailability of any equipment component could result in delays in constructing the manufacturing equipment, idle manufacturing facilities, product design changes and loss of access to important technology and tools for producing and supporting our lithium-ion batteries production, as well as impact our capacity.
The unavailability of key components or equipment could result in delays in constructing manufacturing equipment, idle manufacturing facilities, product design changes and loss of access to important technology and tools for producing and supporting our lithium-ion batteries production, as well as reduced manufacturing capacity.
Under current U.S. federal income tax law, U.S. federal NOLs generated in taxable years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such U.S. federal NOLs is limited to 80 percent of taxable income.
The same is true of other unused tax attributes, such as tax credits. Under current U.S. federal income tax law, U.S. federal NOLs generated in taxable years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such U.S. federal NOLs is limited to 80 percent of taxable income.
The accounting method for reflecting the Convertible Senior Notes, including our Affiliate Notes (each as defined in Note 9 “Borrowings” in the notes to our consolidated financial statements in Part II, Item 8 of this Report) on our consolidated balance sheet, accruing interest expense for the Convertible Senior Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.
The accounting method for reflecting the Convertible Senior Notes, including our Affiliate Notes (each as defined in Note 9 “Borrowings” of our Consolidated Financial Statements in this Annual Report, accruing interest expense for the Convertible Senior Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.
Non-compliance with anti-corruption, anti-bribery, anti-money laundering, import and export control, or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, financial condition and reputation.
Non-compliance with anti-corruption, anti-bribery, anti-money laundering, import and export control, or financial and economic sanctions laws could subject us to whistleblower complaints, adverse media coverage, investigations, and severe administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, results of operations, financial condition and reputation. 44 Table of Contents Our insurance coverage may not be adequate to protect us from all business risks.
Our cost reduction road map is based on extensive discussions with vendors, customers, industry analysts and independent research; however, an assumed cost reduction over time may be inaccurate if our forecasted demand does not materialize as planned. These estimates may prove inaccurate, which would adversely affect the expected profitability margins for our batteries.
Our cost reduction initiatives are based on a variety of factors, including extensive discussions with vendors, customers, industry analysts and independent research; however, an assumed cost reduction over time may be inaccurate if our forecasted demand does not materialize as planned. These estimates may prove inaccurate, which would adversely affect the expected profitability margins for our batteries.
To meet our projected future demand, we need to increase our manufacturing throughput and yield metrics. We expect that meeting our goals to improve throughput and yield will be a multi-quarter or potentially longer endeavor. We have in the past, and may in the future, experience delays in meeting these goals.
We expect that meeting our goals to improve throughput and yield will be a multi-quarter or potentially longer endeavor. We have in the past, and may in the future, experience delays in meeting these goals.
Any such negative outcome could result in payments of substantial monetary damages, which would negatively impact our business and stock price, and to the extent such damages are paid in stock rather than cash, would result in dilution to our current stockholders. The results of lawsuits and claims cannot be predicted with certainty.
Any such negative outcome could result in payments of substantial monetary damages, which would negatively impact our business and stock price, and to the extent such damages are paid in stock rather than cash, would result in dilution to our current stockholders.
While we have retained industry experts and designed our factories with appropriate safety precautions to address the fire risk of manufacturing batteries and to minimize the impact of any such event, if these precautions are inadequate or an event larger than expected, we could have significant equipment or facility damage that would impact our ability to deliver product and require additional cash to recover.
While we have retained industry experts and designed our factories with appropriate safety precautions to address the fire risk of manufacturing batteries and to minimize the impact of any such event, if these precautions are inadequate or an event larger than expected, such occurrences could result in significant equipment, product or facility damage that could lead to manufacturing delays, adversely affect the timing of deliveries to customers and require additional cash to recover.
Our long-term target economics at scale assume we are able to obtain certain pricing levels for our batteries. If these assumptions are incorrect and/or customer demand is lower than expected, we may fail to achieve our target revenue and profitability goals.
Our long-term target economics at scale assume we are able to obtain certain pricing levels for our batteries. If these assumptions are incorrect and/or customer demand is lower than expected, we may fail to achieve our target revenue and profitability goals and our results of operations and financial condition could be materially adversely affected.
Our cell architecture is different than other batteries and may behave differently in certain customer use applications that we have not evaluated. This could limit our ability to deliver to certain applications, including, but not limited to action cameras, portable gaming and smartwatches designed for children.
Our cell architecture is different than other batteries and may behave differently in certain customer use applications that we have not evaluated. This could limit our ability to deliver to certain applications, including, but not limited to smartphones, IoT, smart eyewear, action cameras, portable gaming and smartwatches, and other AI-powered devices.
For example, in addition to turnover of key executive positions in 2023, our Chief Financial Officer stepped down in December 2024 and we created a new role and appointed a Chief Accounting Officer at the end of December 2024.
For example, in addition to turnover of key executive positions in 2023, our Chief Financial Officer stepped down in December 2024, we created a new role and appointed a Chief Accounting Officer at the end of December 2024, appointed a new Chief Financial Officer in April 2025 and our Chief Operating Officer announced his retirement, effective February 2026.
This exclusive-forum provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction, or the Securities Act.
This exclusive-forum provision would not apply to suits brought to enforce a duty or liability created by the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) or any other claim for which the federal courts have exclusive jurisdiction, or the Securities Act of 1933, as amended (the “Securities Act”).
In the past, we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting, all of which have since been remediated. We did not identify any material weakness for the fiscal years 2023 and 2024.
In the past, we and our independent registered public accounting firm identified two material weaknesses in our internal control over financial reporting, all of which have since been remediated. We did not identify any material weakness in the periods covered by this report.
Many U.S. states do not conform to current U.S. federal income tax law regarding NOLs carried forward and deductibility, and generally have more restrictive rules which limit the use of NOLs for state income tax purposes.
Many U.S. states do not conform to current U.S. federal income tax law regarding NOLs carried forward and deductibility, and generally have more restrictive rules which limit the use of NOLs for state income tax purposes. In addition, there may be periods during which states suspend or otherwise limit the use of NOLs for state income tax purposes.
For example, one of our equipment suppliers went into receivership in the first half of 2024. To the extent our equipment suppliers experience business continuity challenges in the future, it may disrupt our production timelines, negatively impact our ability to successfully configure the equipment to run at its target performance and limit our ability to operate such equipment.
To the extent our equipment suppliers experience business continuity challenges in the future, it may disrupt our production timelines, negatively impact our ability to successfully configure the equipment to run at its target performance and limit our ability to operate such equipment.
The Routejade acquisition resulted in, and future acquisitions may result in, significant costs and expenses. Further, if we fail to identify significant issues with any acquisition target during the due diligence process, we may be liable for significant and unforeseen liabilities.
Further, if we fail to identify significant issues with any acquisition target during the due diligence process, we may be liable for significant and unforeseen liabilities.
If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, the market price of our common stock could decline. We have a total of 191,273,833 shares of common stock outstanding as of February 19, 2025.
If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, the market price of our common stock could decline. We have a total of 217,224,442 shares of common stock outstanding as of February 20, 2026.
We face risks associated with customer concentration, which could adversely affect our financial condition, results of operations, and business prospects. As a result of our Routejade acquisition in October 2023, our current revenue stream is derived largely from a limited number of key customers, including defense contractors.
We face risks associated with customer concentration, which could adversely affect our financial condition, results of operations, and business prospects. Our current revenue stream is derived largely from a limited number of key customers, particularly those in the defense sector.
This could increase our inventory costs and limit sales of our batteries in some markets. 33 Table of Contents We are subject to substantial regulation, and unfavorable changes to, or our failure to comply with, these regulations could substantially harm our business and operating results.
This could increase our inventory costs and limit sales of our batteries in some markets. We are subject to substantial regulation, and unfavorable changes to, or our failure to comply with, these regulations could substantially harm our business and operating results. Our batteries are subject to substantial regulation under international, federal, state and local laws, including export control laws.
In such cases, we may seek indemnification from our licensors under our license contracts with them. However, our rights to indemnification may be unavailable or insufficient to cover our costs and losses, depending on our use of the technology, whether we choose to retain control over conduct of the litigation and other factors.
However, our rights to indemnification may be unavailable or insufficient to cover our costs and losses, depending on our use of the technology, whether we choose to retain control over conduct of the litigation and other factors.
Since new battery technologies have not been widely adopted by customers in the battery market, it may be difficult for us to overcome customer risk 19 Table of Contents objections. If unanticipated product safety problems arise, it may raise warranty costs and adversely affect revenue and profit.
Since new battery technologies have not been widely adopted by customers in the battery market, it may be difficult for us to overcome customer risk objections. If unanticipated product safety problems arise, it may raise warranty costs and adversely affect revenue and profit. Our sales to defense customers often involve standard form contracts, which may not be subject to negotiation.
Further, if other battery manufacturers experience fire hazards that result in personal injury or death, it may lead to unfavorable conditions for the battery manufacturing industry as a whole. Lithium-ion battery modules in the marketplace have been observed to catch fire or vent smoke and flame, and such events have raised concerns over the use of such batteries.
Further, if other battery manufacturers experience fire hazards that result in personal injury or death, it may lead to public perception challenges and unfavorable conditions for all industry participants, regardless of their individual safety records. 25 Table of Contents Lithium-ion battery modules in the marketplace have been observed to catch fire or vent smoke and flame, and such events have raised concerns over the use of such batteries.
We have limited experience with this customer design process and limited capacity at Fab2. If we are unsuccessful in meeting customer specifications and/or providing anticipated post-delivery product support services, we may be unable to effectively manage our business, including to develop products for multiple customers’ design specifications in a timely manner, which could harm our financial condition and operating results.
If we are unsuccessful in meeting customer specifications, scaling our manufacturing capabilities and/or providing anticipated post-delivery product support services, we may be unable to effectively manage and grow our business, including developing products for multiple customers’ design specifications in a timely manner, which could harm our business, prospects, financial condition and operating results.
We incurred n et loss attributable to Enovix of approximately $222.2 million and $214.1 million, respectively, for the fiscal years ended December 29, 2024 and December 31, 2023 and had an accumulated deficit of approximately $821.1 million as of December 29, 2024 .
We incurred n et loss attributable to Enovix of approximately $156.7 million and $222.2 million, respectively, for the fiscal years ended December 28, 2025 and December 29, 2024 and had an accumulated deficit of approximately $977.8 million as of December 28, 2025 .
In addition, there may be periods during which states suspend or otherwise limit the use of NOLs for state income tax purposes. 41 Table of Contents In addition, under Sections 382 and 383 of the Code and corresponding provisions under state law, a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset future taxable income and taxes.
In addition, under Sections 382 and 383 of the Code and corresponding provisions under state law, a corporation that undergoes an “ownership change” is subject to limitations on its ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset future taxable income and taxes.
Our actual or perceived failure to comply with such obligations could harm our reputation and expose us to increased liability and other adverse business consequences. We collect, store, use, transfer and share (collectively, “process”) personal data and other sensitive information. Our data processing activities may subject us to various laws and contractual requirements.
We are subject to stringent and evolving U.S. and foreign laws and other obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations could harm our reputation and expose us to increased liability and other adverse business consequences. We collect, store, use, transfer and share (collectively, “process”) personal data and other sensitive information.
If the actions taken by these governments are not successful, the return of adverse economic conditions may negatively impact the demand for our lithium-ion battery cells and may negatively impact our ability to raise capital, if needed, on a timely basis and on acceptable terms or at all.
Extended periods of high inflation or adverse economic conditions may negatively impact the demand for our lithium-ion battery cells and may negatively impact our ability to raise capital, if needed, on a timely basis and on acceptable terms or at all.
In addition, some of our supply agreements require us to fund some or all of the cost of a recall and replacement of end products affected by our batteries. We have a concentration of customer accounts in the defense sector and dependence on these customer accounts may create a risk to our financial stability.
In addition, some of our supply agreements require us to fund some or all of the cost of a recall and replacement of end products affected by our batteries. We have significant customer concentration in key market sectors and dependence on these customers creates a risk to our business and financial condition.
In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following: • cease selling, incorporating or using products that incorporate the challenged intellectual property; • pay substantial damages; • obtain a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all; or • redesign our batteries. 32 Table of Contents In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology, our business, prospects, operating results and financial condition could be materially adversely affected.
In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following: • cease selling, incorporating or using products that incorporate the challenged intellectual property; • pay substantial damages; • obtain a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all; or • redesign our batteries.
We anticipate these losses will increase as we continue our manufacturing scale up, add additional manufacturing capacity, continue commercialization and continue to operate as a public company and comply with legal, accounting and other regulatory requirements. We currently expect to continue to incur losses in fiscal year 2025 until we achieve scale in the near future.
We anticipate these losses will continue and likely increase as we continue our manufacturing scale up, add additional manufacturing capacity, continue commercialization and continue to operate as a public company and comply with legal, accounting and other regulatory requirements.
We are subject to a variety of laws and regulations related to the safety and transportation of our batteries. Our failure to comply with these laws and regulations may have a material adverse effect on our business and results of operations.
Our failure to comply with these laws and regulations may have a material adverse effect on our business and results of operations.
The battery market in which we compete continues to evolve and is highly competitive. Our current competitors have, and future competitors may have, greater resources than we do and may also be able to devote greater resources to the development of their current and future technologies.
Our current competitors have, and future competitors may have, greater resources than we do and may also be able to devote greater resources to the development of their current and future technologies.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (collectively, “CCPA”) applies to personal data of California residents and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights. 40 Table of Contents Outside the U.S., the U.K. and EU General Data Protection Regulation (“GDPR”) applies to some of our operations in Europe.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (collectively, “CCPA”) applies to personal data of California residents and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

13 edited+5 added−4 removed8 unchanged
Biggest changeRisk Factors in this Annual Report on Form 10-K, including “Our batteries and our website, systems and data we maintain may be subject to intentional disruption, other security incidents or alleged violations of laws, regulations or other obligations relating to data handling that could result in liability and adversely impact our reputation and future sales.” Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function.
Biggest changeRisk Factors in this Annual Report on Form 10-K. Governance Our Board oversees the Company’s cybersecurity risk management as part of its overall risk oversight function.
We use a number of processes to identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and the Company’s risk profile using various methods including, for example via manual and automated tools, which are internally prepared and also through external third-party vendors, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and actors, conducting routine scans of the threat environments, evaluating our and our industry’s risk profile, performing annual assessments and penetration testing, evaluating the threats reported to us, coordinating with law enforcement concerning threats, conducting internal and external audits, conducting threat assessments for internal and external threats, reviewing third party threat assessments, conducting vulnerability assessments to identify vulnerabilities, using of external intelligence 43 Table of Contents feeds, conducting third-party- red/blue team testing and tabletop incident response exercises.
We use a number of processes to identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and the Company’s risk profile using various methods including, for example via manual and automated tools, which are internally prepared and also through external third-party vendors, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and actors, conducting routine scans of the threat environments, evaluating our and our industry’s risk profile, performing annual assessments and penetration testing, evaluating the threats reported to us, coordinating with law enforcement concerning threats, conducting internal and external audits, conducting threat assessments for internal and external threats, reviewing third party threat assessments, conducting vulnerability assessments to identify vulnerabilities, using of external intelligence feeds, conducting third-party- red/blue team testing and tabletop incident response exercises.
We use third-party service providers to perform a variety of functions throughout our business, such as application providers, hosting companies and supply chain resources. We have a vendor management program to manage cybersecurity risks associated with our use of these providers.
We use third-party service providers to perform a variety of functions throughout our business, such as application providers, hosting companies and supply chain resources. We have a vendor management program to manage 45 Table of Contents cybersecurity risks associated with our use of these providers.
Our CISO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant stakeholders at our US headquarters, and each of our international subsidiary locations.
Our CISO is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant stakeholders at our US 46 Table of Contents headquarters, and each of our international subsidiary locations.
Our CISO is also responsible for approving budgets, 44 Table of Contents helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. The CISO works in conjunction with our Nominating and Governance Committee Chair and committee members.
Our CISO is also responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. The CISO works in conjunction with our Nominating and Governance Committee Chair and committee members.
Our board, through our Nominating and Governance committee, together with our company executives through our Information Security committee, and our IT and security management teams in conjunction with third party service providers who specialize in cybersecurity, help identify, assess and manage the Company’s cybersecurity threats and risks.
Our board of directors (the “Board”), through its Cybersecurity Committee, together with our company executives through our Information Security Steering Committee, and our IT and security management teams in conjunction with third-party service providers who specialize in cybersecurity, help identify, assess and manage the Company’s cybersecurity threats and risks.
Our cybersecurity risk assessment and management processes are maintained by certain Company management, including the members of our Information Security Steering Committee, which meets quarterly to review cybersecurity matters.
The Board also receives periodic briefings to enhance its understanding of cybersecurity developments. Our cybersecurity risk assessment and management processes are maintained by certain Company management, including the members of our Information Security Steering Committee, which meets quarterly to review cybersecurity matters.
Our cybersecurity incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our CISO and our Nominating and Governance Committee Chair and members. These officials work with the Company’s incident response team to help the Company mitigate and remediate any cybersecurity incidents of which they are notified.
Our cybersecurity incident prevention, detection, response and vulnerability management processes are designed to escalate certain cybersecurity incidents to appropriate members of management, including our CISO, and to the Cybersecurity committee, depending on the circumstances. These officials work with our incident response team to help mitigate and remediate cybersecurity incidents.
In addition, the Company’s incident response and vulnerability management processes include reporting to the Nominating and Governance Committee of the board of directors for certain cybersecurity incidents.
In addition, the Company’s incident response and vulnerability management processes include reporting to the Cybersecurity committee and, as appropriate, the Board.
Our Vice President, Global Information Technology serves as our CIO, and has over 25 years of information technology and cybersecurity risk management experience, including at other public companies.
Our CISO has extensive experience and knowledge in cybersecurity with years of experience in leading security teams, developing security strategies, and managing risk across various industries. Our Vice President, Global Information Technology serves as our CIO, and has over 25 years of information technology and cybersecurity risk management experience, including at other public companies.
The board of directors’ Nominating and Governance committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. Our Nominating and Governance committee consists of members with years of experience in cybersecurity oversight.
Prior to that, our Nominating and Governance committee was responsible for overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats. The Cybersecurity committee consists of three members with years of experience in cybersecurity oversight. The committee meets at least two times each year and more frequently as needed.
For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A.
However, cybersecurity threats are continually evolving, and there can be no assurance that future incidents will not materially affect the Company’s business, results of operations, or financial condition. For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part I, Item 1A.
Our Information Security Steering Committee is comprised of our Chief Information Security Officer (“CISO”), CEO, Chief Financial Officer, Chief Accounting Officer, COO, Chief Legal Officer, Vice President of Human Resources and Vice President of Global Information Technology.
Our Information Security Steering Committee is comprised of our CISO, CEO, Chief Financial Officer, Chief Accounting Officer, COO, Chief Legal Officer, Vice President of Human Resources and Vice President of Global Information Technology. At the management level, our CISO, who reports to our CIO, is responsible for overseeing the assessment and management of our material risks from cybersecurity threats.
Removed
We have a quarterly review of cybersecurity by our Nominating and Governance committee and our internal Information Security committee.
Added
The Cybersecurity Committee and the Information Security Steering Committee each review cybersecurity matters on a regular basis.
Removed
At the management level, our CISO, who reports to our Chief Information Officer (“CIO”), is responsible for overseeing the assessment and management of our material risks from cyber security threats. Our CISO has extensive experience and knowledge in cybersecurity with years of experience in leading security teams, developing security strategies, and managing risk across various industries.
Added
As of the date of this report, we have not experienced a material cybersecurity incident, nor have we incurred any significant expenses or penalties to resolve or settle any security incident that has materially affected our business strategy, results of operations, or financial condition during the periods presented.
Removed
The Nominating and Governance Committee receives periodic reports from our CISO and Information Security Steering Committee concerning the Company’s significant cybersecurity threats and risks and the processes the Company has implemented to address them.
Added
In May 2025, the Board established a standing Cybersecurity Committee to provide dedicated oversight of the Company’s enterprise security posture, including safeguards for its people, facilities, information systems and data, and to oversee management’s programs addressing physical and cybersecurity, privacy and data governance, regulatory compliance, and related risks.
Removed
The Nominating and Governance Committee also has access to the various historical reports, summaries and presentations prepared by the Information Security Steering Committee related to cybersecurity threats, risk and mitigation.
Added
The committee’s responsibilities include, among others: • reviewing our enterprise cybersecurity strategy and framework; • assessing cybersecurity threats and risks, including risks associated with our products and services and third-party service providers; • reviewing significant cybersecurity incidents and management’s response thereto; • evaluating the effectiveness of our cybersecurity risk management and data security programs; and • overseeing our incident response and business continuity preparedness.
Added
The Cybersecurity committee receives regular reports and updates from the Company’s Chief Information Security Officer (“CISO”), Chief Information Officer (“CIO”), and other members of management regarding cybersecurity risks, mitigation efforts, and emerging threat trends. Following each meeting, the Chair of the Cybersecurity committee reports to the full Board on matters addressed by the committee.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−1 removed0 unchanged
Biggest changePrincipal Operations Location Approximately Square Footage Held Headquarters and Center for Innovation United States 68,500 Leased Manufacturing Facility Malaysia 257,500 Leased Manufacturing Facilities South Korea 127,500 Owned R&D Center India 18,000 Leased 45 Table of Contents
Biggest changeItem 2. Properties Our corporate headquarters are located in Fremont, California. The following is a summary of our principal facilities as of December 28, 2025. Principal Operations Location Approximate Square Footage Held Headquarters and Center for Innovation United States 68,600 Leased Manufacturing Facility Malaysia 278,900 Leased Manufacturing Facilities South Korea 467,400 Owned R&D Center India 18,000 Leased
Removed
Item 2. Properties Our corporate headquarters are located in Fremont, California. The following is a summary of our principal facilities as of December 29, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+3 added−0 removed4 unchanged
Biggest change(a) (b) (c) (d) Fiscal periods Total Number of Shares Purchased (1) Average Price Paid Per Share Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs September 30 - October 27, 2024 — $ — — — October 28 - November 24, 2024 2,611 0.06 — — November 25 - December 29, 2024 — — — — Total 2,611 $ 0.06 — — (1) We repurchased 2,611 of shares from former employees for the early exercised stock options, which were unvested on the termination date, at the exercise price.
Biggest change(a) (b) (c) (d) Fiscal periods Total Number of Shares Purchased (1) Average Price Paid Per Share Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (in thousands) September 29 - October 26, 2025 — $ — — $ 1,615 October 27 - November 23, 2025 — — — 1,615 November 24 - December 28, 2025 — — — 1,615 Total — — (1) We did not have any repurchases of shares from former employees related to the early exercised stock options, which were unvested on the termination date, at the exercise price.
Dividends We have not declared or paid any dividends on our Common Stock and we currently do not anticipate to pay any cash dividends in the foreseeable future.
Dividends We have not declared or paid any cash dividends on our common stock and we currently do not anticipate to pay any cash dividends in the foreseeable future.
Purchases of Equity Securities by the Issuer and Affiliated purchasers During the fiscal quarter ended December 29, 2024, we repurchased unvested shares of our Common Stock that had been issued upon early exercise of stock options. Upon termination of employment of a person holding unvested shares, we are entitled to repurchase the unvested shares.
Purchases of Equity Securities by the Issuer and Affiliated purchasers During the fiscal quarter ended December 28, 2025, we repurchased unvested shares of our common stock that had been issued upon early exercise of stock options. Upon termination of employment of a person holding unvested shares, we are entitled to repurchase the unvested shares.
This graph assumes an initial investment of $100.00 in our common stock and in each index (assuming the reinvestment of all dividends, as applicable) at the market close on July 14, 2021 (the date of our common stock began trading on the Nasdaq Global Select Market under the symbol “ENVX” after the Business Combination), through December 27, 2024 (the last trading date before our fiscal year ended on December 29, 2024).
This graph assumes an initial investment of $100.00 in our common stock and in each index (assuming the reinvestment of all dividends, as applicable) at the market close on July 14, 2021 (the date of our common stock began trading on the Nasdaq Global Select Market under the symbol “ENVX” after the Business Combination), through December 26, 2025 (the last trading date before our fiscal year ended on December 28, 2025).
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Common Stock is listed on The Nasdaq Global Select Market under the symbol “ENVX.” As of February 19, 2025, there were 56 holders of record of our Common Stock shares.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on The Nasdaq Global Select Market under the symbol “ENVX.” As of February 20, 2026, there were 50 holders of record of our common stock shares.
Restricted Stock Units Withholding We withhold Common Stock shares with value equivalent to cover employees' tax withholding obligations for certain employees upon the vesting of restricted stock units. During the fiscal year 2024, we withheld 664,634 shares for a total value of $7.1 million for our employees' tax obligations.
Restricted Stock Units Withholding We withhold common stock shares with value equivalent to cover employees' tax withholding obligations for certain employees upon the vesting of restricted stock units. During the fiscal year 2025, we withheld 667,106 shares for a total value of $6.5 million for our employees' tax obligations.
Additionally, there were four holders of record of 5,500,000 Private Placement Warrants (as defined in Note 4 “Fair Value Measurement” of the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K) , each exercisable for one share of our Common Stock at a price of $11.50 per share.
Additionally, there were six holders of record of 5,500,000 Private Placement Warrants (as defined in Note 4 “Fair Value Measurement” of our Consolidated Financial Statements in this Annual Report), each exercisable for one share of our common stock at a price of $10.66 per share.
(2) We did not have any announced plan or programs to repurchase our Common Stock during the fiscal year 2024. 47 Table of Contents Performance Graph The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Nasdaq Composite Index and the Russell 2000 Index over the same period.
We may modify, suspend or discontinue the Repurchase Plan at any time and we are not obligated to repurchase any specific number of shares of common stock. 48 Table of Contents Performance Graph The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Nasdaq Composite Index and the Russell 2000 Index over the same period.
Added
(2) On June 30, 2025, our Board of Directors approved a stock repurchase plan authorizing up to $60.0 million in common stock repurchases (the “Repurchase Plan”) which expires on December 31, 2026. Prior to the adoption of the Repurchase Plan, we did not have a repurchase plan in place.
Added
During the third quarter of 2025, we repurchased 5,437,556 shares of our common stock for $58.4 million pursuant to the Repurchase Plan. The costs for these common stock repurchases are recorded in Treasury Stock, at Cost, on our Consolidated Balance Sheet.
Added
As of December 28, 2025, we had $1.6 million available for future repurchases of common stock available under the Repurchase Plan. We may make repurchases from time to time through open market purchases or through privately negotiated transactions. Pursuant to the Repurchase Plan, the timing and number of shares of common stock repurchased will be determined at our discretion.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFiscal Years Ended December 29, 2024 December 31, 2023 Change ($) % Change Revenue $ 23,074 $ 7,644 $ 15,430 N/M Cost of revenue 25,119 63,061 (37,942) (60) % Gross margin (2,045) (55,417) 53,372 (96) % Operating expenses: Research and development 124,506 88,392 36,114 41 % Selling, general and administrative 74,311 79,014 (4,703) (6) % Impairment of equipment — 4,411 (4,411) N/M Restructuring cost 41,807 3,021 38,786 N/M Total operating expenses 240,624 174,838 65,786 38 % Loss from operations (242,669) (230,255) (12,414) 5 % Other income (expense): Change in fair value of common stock warrants 12,244 6,180 6,064 98 % Interest income 12,332 14,070 (1,738) (12) % Interest expense (6,787) (4,456) (2,331) 52 % Other income (expense), net 954 (304) 1,258 N/M Total other expense, net 18,743 15,490 3,253 21 % Loss before income tax benefit (223,926) (214,765) (9,161) 4 % Income tax benefit (1,392) (633) (759) N/M Net loss $ (222,534) $ (214,132) $ (8,402) 4 % N/M – Not meaningful Revenue Revenue for fiscal years 2024 and 2023 was $23.1 million and $7.6 million, respectively.
Biggest changeFiscal Years Ended December 28, 2025 December 29, 2024 Change ($) % Change Revenue $ 31,821 $ 23,074 $ 8,747 38 % Cost of revenue 25,716 25,119 597 2 % Gross profit (loss) 6,105 (2,045) 8,150 (399) % Operating expenses: Research and development 110,331 124,506 (14,175) (11) % Selling, general and administrative 73,028 74,311 (1,283) (2) % Restructuring cost — 41,807 (41,807) (100) % Total operating expenses 183,359 240,624 (57,265) (24) % Loss from operations (177,254) (242,669) 65,415 (27) % Other income (expense): Change in fair value of common stock warrants 21,832 12,244 9,588 78 % Gain on bargain purchase of assets 4,761 — 4,761 N/M Interest income 12,998 12,332 666 5 % Interest expense (21,597) (6,787) (14,810) 218 % Other income (expense), net 1,341 954 387 41 % Total other income (expense), net 19,335 18,743 592 3 % Loss before income tax benefit (157,919) (223,926) 66,007 (29) % Income tax benefit (1,312) (1,392) 80 (6) % Net loss $ (156,607) $ (222,534) $ 65,927 (30) % Net loss attributable to non-controlling interests 134 (293) 427 (146) % Net loss attributable to Enovix $ (156,741) $ (222,241) $ 65,500 (30) % N/M - not meaningful Revenue Revenue for fiscal years 2025 and 2024 were $31.8 million and $23.1 million, respectively.
We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates.
We base these estimates on historical experience and other various assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates.
Since our acquisition of Routejade and our establishment of operations in Malaysia and India in the fiscal year 2023, we became subject to taxation based on the foreign statutory rates in the countries. 53 Table of Contents Results of Operations Comparison of Fiscal Year 2024 to Prior Fiscal Year 2023 The following table sets forth our consolidated operating results for the periods presented below (in thousands, except percentages).
Since our acquisition of Routejade and our establishment of operations in Malaysia and India in the fiscal year 2023, we became subject to taxation based on the foreign statutory rates in the countries. 53 Table of Contents Results of Operations Comparison of Fiscal Year 2025 to Prior Fiscal Year 2024 The following table sets forth our consolidated operating results for the periods presented below (in thousands, except percentages).
With no production in Fab1 and minimal production in Fab2 in fiscal year 2024, a majority of the factory expenses associated with Fab1 and Fab2 were classified as research and development expenses 54 Table of Contents instead of cost of revenues in fiscal year 2024.
With no production in Fab1 and minimal production in Fab2 in fiscal year 2025 and 2024, a majority of the factory expenses 54 Table of Contents associated with Fab1 and Fab2 were classified as research and development expenses instead of cost of revenues in fiscal year 2025 and 2024.
As we ramp up our engineering operations to complete the development of batteries and required process engineering to meet customer specifications, we anticipate that research and development expenses will continue to increase for the foreseeable future as we expand hiring of scientists, engineers and technicians and continue to invest in additional plant and equipment for product development, building prototypes and testing of batteries.
As we ramp up our engineering operations to complete the development of batteries and required process engineering to meet customer specifications, we anticipate that research and development expenses will continue to increase as we expand hiring of scientists, engineers and technicians and continue to invest in additional plant and equipment for product development, building prototypes and testing of batteries.
Based on the anticipated spending and timing of expenditures to support operational development and market expansion, we currently expect that our cash will be sufficient to meet our funding requirements over the next twelve months from the date this Annual Report on Form 10-K is filed.
Based on the anticipated spending and timing of expenditures to support operational development and market expansion, we currently expect that our cash will be sufficient to meet our funding requirements over the next twelve months from the date of this Annual Report on Form 10-K.
For certain customized products with customer acceptance criteria specified in the sales 51 Table of Contents agreement, the performance obligations are generally satisfied upon our customer’s acceptance. Payment terms can vary depending on the contract and it is generally required within 90 days or less from the delivery date or the acceptance date of our product.
For certain customized products with customer acceptance criteria specified in the sales agreement, the performance obligations are generally satisfied upon our customer’s acceptance. Payment terms can vary depending on the contract and it is generally required within 90 days or less from the delivery date or the acceptance date of our product.
Restructuring cost was the result of our restructuring plans in 2023 and 2024, which included workforce reductions, relocation of our Fab1 manufacturing operations from California to Malaysia and disposals of our long-lived assets located in Fremont that have no future or alternative use.
Restructuring cost was the result of our restructuring plans in 2023 and 2024, which included workforce reductions, relocation of our Fab1 manufacturing operations from California to Malaysia and disposals of our long-lived assets 52 Table of Contents located in Fremont that have no future or alternative use.
Research and development costs are expensed as incurred. To date, research and development expenses have consisted primarily of personnel-related expenses for scientists, experienced engineers and technicians as well as costs associated with the expansion and ramp up of our engineering and manufacturing facility, materials and supplies to support the product development and process engineering efforts.
To date, research and development expenses have consisted primarily of personnel-related expenses for scientists, experienced engineers and technicians as well as costs associated with the expansion and ramp up of our engineering and manufacturing facility, materials and supplies to support the product development and process engineering efforts.
Financing Activities Net cash provided by financing activities was $150.7 million for the fiscal year 2024, which primarily consisted of $107.2 million of proceeds, net of paid issuance costs, from issuance of common stock, $40.0 million of net proceeds from the issuance of our common stock under our ATM program, $4.8 million of proceeds from the exercise of stock options to purchase our common stock, $4.6 million of proceeds from the borrowings of short-term loans and $1.5 million of proceeds from our employee stock purchase plan (“ESPP”) to purchase our common stock, partially offset by $7.1 million of payroll tax payments for shares withheld upon vesting of restricted stock units.
Net cash provided by financing activities was $150.7 million for the fiscal year 2024, which primarily consisted of $107.2 million of proceeds, net of paid issuance costs, from issuance of common stock, $44.8 million of proceeds from the exercise of stock options to purchase our common stock, $4.6 million of proceeds from the borrowings of short-term loans and $1.5 million of proceeds from our employee stock purchase plan (“ESPP”) to purchase our common stock, partially offset by $7.1 million of payroll tax payments for shares withheld upon vesting of restricted stock units.
The 55 Table of Contents decrease in fair value of Private Placement Warrants was primarily due to a decrease in our common stock price during the current year.
The decrease in fair value of Private Placement Warrants was primarily due to a decrease in our common stock price during the current year.
The most 58 Table of Contents significant assumptions impacting the fair value of the Private Placement Warrants are the fair value of our common stock as of each re-measurement date and expected price volatility of our Common Stock, which included consideration of our historical observed volatility and other additional factors that were deemed relevant.
The most significant assumptions impacting the fair value of the Private Placement Warrants are the fair value of our common stock as of each re-measurement date and expected price volatility of our common stock, which includes consideration of our historical observed volatility and other additional factors that were deemed relevant.
Off-Balance Sheet Arrangements As of December 29, 2024 and December 31, 2023, we did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Off-Balance Sheet Arrangements As of December 28, 2025 and December 29, 2024, we did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Net cash used in operating activities consists of net loss of $214.1 million, adjusted for non-cash items and the effect of changes in working capital.
Net cash used in operating activities consists of net loss of $156.6 million, adjusted for non-cash items and the effect of changes in working capital.
Net cash used in investing activities, which were primarily related to equipment purchases, were $76.2 million and $61.8 million for the fiscal years 2024 and 2023, respectively. During the fiscal years 2024 and 2023, we purchased $31.8 million and $138.3 million of investments, respectively.
Net cash used in investing activities, which were primarily related to equipment purchases, were $18.2 million and $76.2 million for the fiscal years 2025 and 2024, respectively. During the fiscal years 2025 and 2024, we purchased $584.9 million and $31.8 million of investments, respectively.
Non-cash adjustments primarily include the change in fair value of common stock warrants of $6.2 million, stock-based compensation expense of $69.5 million, depreciation and amortization expense of $34.0 million and impairment of equipment of $4.4 million. Investing Activities Our cash flows used in investing activities to date have been primarily comprised of purchases of property and equipment.
Non-cash adjustments primarily include the change in fair value of common stock warrants of $12.2 million, stock-based compensation expense of $58.8 million, depreciation and amortization expense of $45.0 million and impairment of equipment of $38.3 million. Investing Activities Our cash flows used in investing activities to date have been primarily comprised of purchases of property and equipment.
Recent Accounting Pronouncements See section “Recently Adopted Accounting Pronouncements” of Note 2 “Summary of Significant Accounting Policies” within our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Recent Accounting Pronouncements See section “Recently Adopted Accounting Pronouncements” of Note 2 “Summary of Significant Accounting Policies” of our Consolidated Financial Statements included in this Annual Report.
We believe that application of the following accounting policies involves our subjective judgement, estimates and assumptions, which have had or are reasonable likely to have a material impact to our consolidated financial statements.
We believe that application of these critical accounting estimates involves our subjective judgments and assumptions, which have had, or are reasonably likely to have, a material impact on our consolidated financial statements.
Change in Fair Value of Common Stock Warrants For fiscal year 2024, the change in fair value of common stock warrants of $12.2 million was mainly attributable to a decrease in the fair value of the 5,500,000 Private Placement Warrants (as defined in Note 4 “Fair Value Measurement” of the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K).
Change in Fair Value of Common Stock Warrants For fiscal year 2025, the change in fair value of common stock warrants of $21.8 million was mainly attributable to a decrease in the fair value of the 5,500,000 Private Placement Warrants (as defined in Note 4 “Fair Value Measurement” of our Consolidated Financial Statements in this Annual Report).
Contractual Obligations and Commitments As of December 29, 2024, we had $172.5 million aggregate principal amount of 3.0% Convertible Senior Notes outstanding, which will mature on May 1, 2028 unless earlier converted, redeemed or repurchased.
Contractual Obligations and Commitments As of December 28, 2025, we had $172.5 million aggregate principal amount of our 2028 Convertible Senior Notes outstanding bearing interest at 3.0%, which will mature on May 1, 2028 unless earlier converted, redeemed or repurchased, and $360.0 million aggregate principal amount of our 2030 Convertible Senior Notes outstanding bearing interest at 4.75%, which will mature on September 15, 2030 unless earlier converted, redeemed or repurchased.
The change in the expected performance achievement percentage could have an impact on the stock-based compensation expense until the end of each performance periods. For further information, see Note 14 “Stock-based Compensation” to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Changes in the expected performance achievement percentage could have a significant impact on the stock-based compensation expense until the end of each performance periods. For further information, see Note 14 “Stock-based Compensation” of our Consolidated Financial Statements in this Annual Report.
We currently use cash to fund operations, meet working capital requirements and fund our capital expenditures. In fiscal year 2025, we expect that our spending in cost of revenues and operating expenses will continue to increase as we ramp up our Fab2 operations and build additional production lines.
Material Cash Requirements We currently use cash to fund operations, meet working capital requirements and fund our capital expenditures. In fiscal year 2026, we expect that our spending in cost of revenues and operating expenses will continue to increase as we ramp up our Fab2 operations. During the fiscal year 2025, we purchased $18.2 million in property and equipment.
We believe we will meet longer-term expected future cash requirements and obligations through a combination of available cash, cash equivalents and future debt financings, and access to other public or private equity offerings as well as potential strategic arrangements. We have made our estimates on historical experience and various other relevant factors and we believe that they are reasonable.
We believe we will meet longer-term expected future cash requirements and obligations through a combination of available cash, cash equivalents and future debt financings, and access to other public or private equity offerings as well as potential strategic arrangements.
For the fiscal year 2024, we purchased $76.2 million of property and equipment. We will continue to increase our property and equipment purchases in the near future to support the build-out of our manufacturing facilities and our battery manufacturing equipment. See more discussion on contractual obligations and commitments in the section below.
We will continue to increase our property and equipment purchases in the near future to acquire our battery manufacturing equipment and support the build-out of our manufacturing facilities. Please see our discussion of contractual obligations and commitments in the section below for further information.
We continue to increase hiring for employees in supporting the ramping up of commercial manufacturing. We expect our cash used in operating activities to increase significantly before we start to generate any material cash inflows from commercially manufacturing and selling our batteries. Net cash used in operating activities was $108.6 million for the fiscal year 2024.
We continue to ramp up our Fab2 operations. We expect our cash used in operating activities to increase significantly before we start to generate any material cash inflows from commercially manufacturing and selling our batteries. Net cash used in operating activities was $95.3 million for the fiscal year 2025.
Please see Note 9 “Borrowings” of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information. We lease our headquarters in Fremont, California, our Fab2 in Penang, Malaysia, and offices in India and China.
Please see Note 9 “Borrowings” of our Consolidated Financial Statements in this Annual Report for further information. We lease our headquarters in Fremont, California, our Fab2 in Penang, Malaysia, and offices in India and China. For the lease payment schedule, please see Note 7 “Leases,” of our Consolidated Financial Statements in this Annual Report for further information.
Since fiscal year 2022, we did not issue stock options. For the PRSUs, stock-based compensation cost is recognized based on the grant date fair value and the expected performance achievement percentage of meeting the performance milestones. At each reporting period, we assess and determine the expected performance achievement percentage.
Stock-Based Compensation We issue stock-based compensation to certain employees in the form of PRSUs. Stock-based compensation related to PRSUs is recognized based on the grant date fair value and the expected performance achievement percentage of meeting the performance milestones. At each reporting period, we assess and determine the expected performance achievement percentage.
Of the $15.4 million increase in revenue compared to fiscal year 2023, $6.4 million of that increase was derived from higher shipment volumes to a South Korea defense contractor, and the remaining increase was attributable to higher shipment volumes to consumer electronics customers.
Of the $8.7 million increase in revenue, $7.3 million of that increase was derived from higher shipment volumes to a South Korean defense contractor, and the remaining increase was attributable to higher shipment volumes to industrial and consumer electronics customers.
Key Trends, Opportunities and Uncertainties We generate revenue from the sale of (a) batteries and battery pack products (“Product Revenue”) and (b) engineering revenue contracts (“Service Revenue”) for the development of lithium-ion battery technology.
Key Trends, Opportunities and Uncertainties We generate revenue from the sale of batteries and battery pack products (“Product Revenue”).
Capitalization of certain costs are recognized as an asset if they relate directly to a customer contract, generate or enhance resources of the entity that will be used in satisfying future performance obligations, and are expected to be recovered. If these three criteria are not met, the costs are expensed in the period incurred.
When the estimated net realizable values are below the manufacturing costs, a charge to cost of revenue is recorded. Capitalization of certain costs are recognized as an asset if they relate directly to a customer contract, generate or enhance resources of the entity that will be used in satisfying future performance obligations, and are expected to be recovered.
Deferred costs are recognized as cost of revenue in the period when the related revenue is recognized.
If these three criteria are not met, the costs are expensed in the period incurred. Deferred costs are recognized as cost of revenue in the period when the related revenue is recognized.
Our inventory is stated at the lower of cost or net realizable value (“NRV”) on a first-in and first-out basis. Determining net realizable value of finished goods and work in process inventories involves projecting average selling prices. When the estimated net realizable values are below the manufacturing costs, a charge to cost of revenue is recorded.
We anticipate that cost of revenue will continue to increase as we optimize and expand our production line. Our inventory is stated at the lower of cost or net realizable value (“NRV”) on a first-in and first-out basis. Determining net realizable value of finished goods and work in process inventories involves projecting average selling prices.
Operating Expenses Research and Development Expenses Research and development expenses consist of engineering services, allocated facilities costs, depreciation, development expenses, materials, labor and stock-based compensation related primarily to our (i) technology development, (ii) design, construction, and testing of preproduction prototypes and models, and (iii) certain costs related to the design, construction and operation of our pilot plant that are not of a scale economically feasible to us for commercial production.
Operating Expenses Research and Development Expenses Research and development expenses consist of engineering services, allocated facilities costs, depreciation, development expenses, materials, labor and stock-based compensation related primarily to our (i) technology development, and (ii) design, construction, and testing of preproduction prototypes and models. Research and development costs are expensed as incurred.
Cost of Revenue Cost of revenue includes materials, labor, depreciation and amortization expense, freight costs and other direct costs related to manufacturing our products and service contracts. Labor consists of personnel-related expenses such as salaries and benefits, and stock-based compensation. We anticipate that cost of revenue will continue to increase as we optimize and bring-up our production line.
The amount of revenue recognized reflects the consideration for the product sold. Cost of Revenue Cost of revenue includes materials, labor, depreciation and amortization expense, freight costs and other direct costs related to manufacturing our products and service contracts. Labor consists of personnel-related expenses such as salaries, benefits, and stock-based compensation.
For fiscal year 2023, the change in fair value of common stock warrants of $6.2 million was attributable to a decrease in the fair value of the 6,000,000 Private Placement Warrants. The decrease in fair value of Private Placement Warrants was primarily due to a decrease in our common stock price during the year 2023.
The decrease in fair value of Private Placement Warrants was primarily due to a decrease in our common stock price during the year 2024. Interest Income Interest income for fiscal year 2025 was $13.0 million, compared to $12.3 million during fiscal year 2024.
Components of Results of Operations Revenue In June 2022, we began to generate revenue from our Fab1 in Fremont, California. In October 2023, we acquired Routejade, a manufacturer of electrode coating and battery pack for customers worldwide. We recognize revenue within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers.
In October 2023, we acquired Routejade, a manufacturer of electrode coating and battery packs for customers worldwide. We recognize revenue within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. Our revenue consists of product revenue, resulting from the sale of lithium-ion batteries and battery pack products (“Product Revenue”) to customers.
Restructuring Cost In May 2024, we initiated the 2024 Restructuring Plan (as defined in Note 15 “Restructuring Costs” of the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K) to relocate our Fab1 manufacturing operations in Fremont, California to Malaysia.
Restructuring Cost There were no restructuring costs recorded during fiscal year 2025, compared to $41.8 million of restructuring costs recorded during fiscal year 2024. In May 2024, we initiated the 2024 Restructuring Plan (as defined in Note 15 “Restructuring Costs” of our Consolidated Financial Statements in this Annual Report) to relocate our Fab1 manufacturing operations in Fremont, California to Malaysia.
Starting in the second quarter of 2023, we began to purchase short-term investments. We expect the costs to acquire property and equipment to increase in the future as we continue to build-out our Fab2 and develop our battery manufacturing production lines in Malaysia.
We expect the costs to acquire property and equipment to increase in the future as we continue to build-out our Fab2, evaluate additional or alternative manufacturing capacity options and develop our battery manufacturing production lines in Malaysia.
Non-cash adjustments primarily include a decrease in fair value of the Private Placement Warrants of $12.2 million, stock-based compensation expense of $58.8 million, depreciation and amortization expense of $45.0 million and impairment and loss on disposal of long-lived assets of $38.3 million. Net cash used in operating activities was $104.6 million for the fiscal year 2023.
Non-cash adjustments primarily include a decrease in fair value of the Private Placement Warrants of $21.8 million, stock-based compensation expense of $49.4 million, depreciation and amortization expense of $35.1 million and non-cash interest expense of $9.2 million. Net cash used in operating activities was $108.6 million for the fiscal year 2024.
The transition from Fab1 to Fab2 was a part of the 2023 and 2024 Restructuring Plans (as defined in Note 15 “Restructuring Costs” of the notes to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K).
The transition from Fab1 to Fab2 was a part of the 2023 and 2024 Restructuring Plans (as defined in Note 15 “Restructuring Costs” of our Consolidated Financial Statements included in this Annual Report). These restructuring plans also included U.S. workforce reductions in the fourth quarter of fiscal year 2023 and the second half of fiscal year 2024.
Other Income (Expense) Other income and expense primarily consists of dividend income, interest income, interest expense, foreign currency transaction gain or loss and fair value adjustments for outstanding common stock warrants.
Please refer to Note 15 “Restructuring Costs” of our Consolidated Financial Statements in this Annual Report for further details. Other Income (Expense) Other income and expense primarily consists of dividend income, interest income, interest expense, foreign currency transaction gain or loss and fair value adjustments for outstanding common stock warrants.
In addition, there was a decrease in the number of warrants outstanding at the end of fiscal year 2024 as there was a warrant exercise of 500,000 shares during the fiscal year 2024 .
In addition, there was a decrease in the number of warrants outstanding at the end of fiscal year 2024 as there was a warrant exercise of 500,000 shares during the fiscal year 2024. 55 Table of Contents For fiscal year 2024, the change in fair value of common stock warrants of $12.2 million was attributable to a decrease in the fair value of the 5,500,000 Private Placement Warrants.
Revenue in both years primarily resulted from the product shipments from our facility in South Korea, which was acquired in October 2023. Revenue for fiscal year 2023 included $7.3 million of revenue from the Routejade acquisition.
Revenue in both years primarily resulted from the product shipments from our facility in South Korea, which was acquired in October 2023. Revenue for fiscal year 2024 and 2025 revenue reflected product shipments to South Korea defense contractors and industrial and consumer electronics customers.
Fiscal Years 2024 2023 Change ($) Net cash used in operating activities $ (108,633) $ (104,636) $ (3,997) Net cash used in investing activities (1,379) (142,956) 141,577 Net cash provided by financing activities 150,749 159,585 (8,836) Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,169) 154 (1,323) Change in cash, cash equivalents, and restricted cash $ 39,568 $ (87,853) $ 127,421 Comparison of Fiscal Year 2024 to Prior Fiscal Year 2023 Operating Activities Our cash flows used in operating activities to date have been primarily comprised of operating expenses.
Fiscal Years 2025 2024 Change ($) Net cash used in operating activities $ (95,291) $ (108,633) $ 13,342 Net cash used in investing activities (538,269) (1,379) (536,890) Net cash provided by financing activities 467,384 150,749 316,635 Effect of exchange rate changes on cash, cash equivalents and restricted cash (536) (1,169) 633 Change in cash, cash equivalents, and restricted cash $ (166,712) $ 39,568 $ (206,280) Comparison of Fiscal Year 2025 to Prior Fiscal Year 2024 Operating Activities Our cash flows used in operating activities to date have been primarily comprised of operating expenses.
A summary of our significant accounting policies is included in Note 2 “Summary of Significant Accounting Policies” of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
A summary of our significant accounting policies is included in Note 2 “Summary of Significant Accounting Policies” of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. 58 Table of Contents Valuation of Private Placement Warrants In connection with the 2021 business combination with Rodgers Silicon Valley Acquisition Corp., we issued warrants in a private placement to the sponsor and members of Rodgers Capital LLC (the “Private Placement Warrants”).
Fiscal Year Our fiscal year is the 52 or 53-week period ending on the Sunday closest to December 31. Accordingly, we will have a 53-week fiscal year every five or six years and our fiscal year 2026 will consist of 53 weeks.
Accordingly, we will have a 53-week fiscal year every five or six years and our fiscal year 2026 will consist of 53 weeks. Our fiscal years 2025, 2024, and 2023 consisted of 52 weeks, which ended on December 28, 2025, December 29, 2024, and December 31, 2023, respectively. All period references are to these fiscal periods unless otherwise indicated.
Our Product Revenue is primarily generated from selling lithium-ion batteries or battery packs to commercial customers and defense contractors. Product Revenue is recognized once we have satisfied the performance obligations as defined in the sales agreement, which is generally satisfied upon transfer of control of goods. Control is transferred upon delivery for our products.
Product Revenue is recognized once we have satisfied the performance obligations 51 Table of Contents as defined in the sales agreement, which is generally satisfied upon transfer of control of goods. Control is transferred upon delivery of the product.
Accordingly, we expect our selling, general and administrative expenses to continue to increase in the near term and for the foreseeable future. 52 Table of Contents Impairment of Equipment and Restructuring Cost Impairment of equipment was a result of our disposal of machinery and equipment that were identified to have no future or alternative usage.
Impairment of Equipment and Restructuring Cost Impairment of equipment was a result of our disposal of machinery and equipment that were identified to have no future or alternative use.
Selling, General and Administrative Expenses Selling, general and administrative expenses for the fiscal year 2024 were $74.3 million, compared to $79.0 million for the fiscal year 2023.
There were no executive departure-related charges recorded in fiscal year 2025 comparable to those incurred in prior years. Selling, General and Administrative Expenses Selling, general and administrative expenses for the fiscal year 2025 were $73.0 million, compared to $74.3 million for the fiscal year 2024.
We expect to enter into other commitments to support our product development, the build-out of our manufacturing facilities, and our business development, which are generally cancellable upon notice. Additionally, from time to time, we enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice.
The Company is also evaluating facility purchase and alternative manufacturing site options to support long-term operational continuity and future growth. We expect to enter into other commitments to support our product development, the build-out of our manufacturing facilities, and our business development, which are generally cancellable upon notice.
Net cash provided by financing activities was $159.6 million for the fiscal year 2023, which primarily consisted of $172.5 million of gross proceeds from the Convertible Senior Notes, $11.9 million of proceeds from the exercise of stock options to purchase our common stock and $2.4 million of proceeds from our ESPP to purchase our common stock, 57 Table of Contents partially offset by $17.3 million of capped call transaction costs, $5.9 million of debt issuance costs, and $3.9 million of payroll tax payments for shares withheld upon vesting of restricted stock units.
These cash inflows were partially offset by $58.4 million of repurchases of our common stock, $45.3 million of payments for capped call 57 Table of Contents transactions, $11.2 million of debt issuance costs, and $6.5 million of payroll tax payments for shares withheld upon vesting of restricted stock units.
Accordingly, we recognized a full year of interest expense in the fiscal year 2024 as compared to approximately 8.5 months of interest expense recognized for the fiscal year 2023. Liquidity and Capital Resources We have incurred operating losses and negative cash flows from operations since inception through December 29, 2024 and expect to incur operating losses for the foreseeable future.
Liquidity and Capital Resources We have incurred operating losses and negative cash flows from operations since inception through December 28, 2025 and expect to incur operating losses for the foreseeable future. As of December 28, 2025, we had cash, cash equivalents, restricted cash, and investments of $620.8 million, working capital of $477.2 million and an accumulated deficit of $977.8 million.
Actual results may differ from our estimates, and we could utilize our available capital resources sooner than we expect. 56 Table of Contents Summary of Cash Flows The following table provides a summary of cash flow data for the periods presented below (in thousands).
Summary of Cash Flows The following table provides a summary of cash flow data for the periods presented below (in thousands).
As a result, we recorded pre-tax restructuring charges of $41.8 million for the fiscal year 2024, which consisted of non-cash charges of $38.2 million of loss on disposals of Fab1 long-lived assets located in Fremont, $1.2 million of stock-based compensation expense, cash charges of $1.6 million of severance and termination benefits and $0.8 million of other charges.
The restructuring charges recorded during fiscal year 2024 consisted primarily of non-cash charges related to the disposal of Fab1 long lived assets, stock-based compensation expense, and cash charges for severance, termination benefits and other exit-related costs.
In addition, we had $106.6 million and $67.2 million of investments mature during the fiscal years 2024 and 2023, respectively. In October 2023, we used cash, net of cash acquired, of $10.0 million and 5,923,521 shares of our common stock to purchase substantially all of the outstanding shares of Routejade.
In addition, we had $74.9 million and $106.6 million of investments mature during the fiscal years 2025 and 2024, respectively. In April 2025, we used cash, net of cash acquired, of $10.0 million to acquire battery cell manufacturing assets located in South Korea.
For contractual obligations, please See Note 10 “Commitments and Contingencies” of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information.
As of December 28, 2025, our commitments included approximately $5.3 million of our open purchase orders, including equipment purchase orders, and contractual obligations that occurred in the ordinary course of business. For contractual obligations, please See Note 10 “Commitments and Contingencies” of our Consolidated Financial Statements in this Annual Report for further information.
Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation. As of December 29, 2024, our commitments included approximately $17.4 million of our open purchase orders, including equipment purchase orders, and contractual obligations that occurred in the ordinary course of business.
Additionally, from time to time, we enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation.
The decrease of $4.7 million, or 6%, was primarily attributable to one-time severance, benefits and stock-based compensation expense of $17.9 million in connection with the departure of certain officers and executives in fiscal year 2023, a $5.9 million decrease in information technology, professional fees and facility costs, and $1.3 million of acquisition costs in connection with the Routejade Acquisition.
The decrease of $1.3 million, or 2%, was primarily attributable to a $9.4 million decrease in stock-based compensation expense, a $6.4 million decrease in salaries, payroll taxes and benefits resulting from reduced U.S. headcount, a $2.4 million decrease in professional fees, a $1.2 million decrease in facilities and equipment related costs, a $1.1 million decrease in insurance expense, and a $0.5 million decrease in depreciation expense related to the discontinuation of Fab1 operations.
In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. The fair value is determined based on the estimated discounted cash flows.
If the carrying value exceeds the undiscounted cash flows, the asset is considered impaired, and an impairment loss is recognized for the amount by which the carrying value exceeds the asset’s fair value.
Access to Capital Assuming we experience no significant delays in the production plan nor any deterioration in capital efficiency, we believe that our cash resources are sufficient to fund the manufacturing and production ramp of our Fab2 manufacturing facility in Malaysia for commercial launch.
Access to Capital Assuming we do not experience any significant delays in the research and development and manufacturing of our products or any deterioration in our capital efficiency, we believe we will meet our longer-term expected future cash requirements and obligations.
Our 49 Table of Contents performance and future success depend on several factors that present significant opportunities, but also pose risks and challenges as described in Part I, Item 1A of this Annual Report on Form 10-K.
Our performance and future success depend on several factors that present significant opportunities, but also pose risks and challenges as described in Part I, Item 1A of this Annual Report on Form 10-K. 50 Table of Contents Fiscal Year 2025 Highlights: During fiscal year 2025, we made significant progress across revenue growth, product development, manufacturing scale-up, and strategic financing initiatives and achieved our highest annual revenue and gross margins to date. • Revenue increased throughout the year to $31.8 million, representing 38% year-over-year growth, with defense shipments remaining our largest contributor and batteries for naval munitions being our top product in the fourth quarter of 2025. • We advanced manufacturing readiness and capacity expansion across our global footprint.
In addition, we anticipate our factory expenses will increase as we continue to hire additional personnel to support the Fab2 production lines and our Fab2 manufacturing facility. Research and Development Expenses Research and development expenses for the fiscal year 2024 were $124.5 million, compared to $88.4 million for the fiscal year 2023.
Research and Development Expenses Research and development expenses for the fiscal year 2025 were $110.3 million, compared to $124.5 million for the fiscal year 2024.
We also operate in the defense market with sales of conventional graphite battery products to defense customers. In addition to the smartphone, AR/VR, smart eyewear and defense industries, we are pursuing the deployment of our technology for the electric vehicle (“EV”) market. We currently lease our headquarters in Fremont, California.
In addition to the smartphone, smart eyewear and defense and industrial markets, we are pursuing deployment of our technology across other edge-AI applications, as well as computing and EVs, among others. We currently lease several facilities, including our headquarters in Fremont, California, and our manufacturing facility in Malaysia.
For the lease payment schedule, please see Note 7 “Leases,” of the notes to our consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K for further information.
Please see Note 9 “Borrowings” of our Consolidated Financial Statements in this Annual Report for further information. Additionally, during the third quarter of 2025, our Board of Directors authorized the Repurchase Plan.
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The management of Enovix Corporation are referred to as the “Company,” “we,” “us,” “our” and “Enovix.” Business Overview We design, develop and have started to commercially manufacture an advanced silicon-anode lithium-ion battery using our proprietary cell architecture that increases energy density and maintains high cycle life.
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The following MD&A describes the principal factors affecting our results of operations, financial resources, liquidity, contractual obligations and commitments, and critical accounting estimates during the fiscal year 2025, compared with the fiscal year 2024.
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This enables us to use silicon as the only active lithium cycling material in the anode whereas industry incumbents have historically combined only a modest amount of silicon with graphite. We have applied an equally innovative approach to develop proprietary roll-to-stack production tools for existing lithium-ion battery manufacturing lines and increase megawatt hour capacity.
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A detailed discussion of the fiscal year 2024 compared with the fiscal year 2023 is not included herein and can be found in the MD&A section in our 2024 Annual Report on Form 10-K, filed with the SEC on February 25, 2025, which is incorporated herein by reference.
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Our silicon anode battery architecture allows lithium-ion batteries to be produced smaller, cheaper and more efficiently at scale than current alternatives. With our acquisition of Routejade, Inc. (“Routejade”) in 2023, we also offer conventional lithium-ion batteries, which expands our suite of battery offerings to our customers.
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Business Overview We design, develop and manufacture advanced lithium-ion batteries, including our proprietary silicon-anode architecture that enables higher energy density and performance relative to conventional battery cells, particularly in space-constrained devices such as smartphones, smart eyewear and next generation AI-enabled devices.
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To date, we have concentrated our operational effort on researching, developing and commercializing the cutting-edge technology behind our silicon-anode lithium-ion battery. We have agreements to provide engineering and proof of concept samples to several market leading smartphone customers, and have advanced relationships with customers in the augmented reality/virtual reality (“AR/VR”) industry and smart eyewear market.
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We have expanded our suite of battery offerings through acquisitions and now also manufacture conventional lithium-ion batteries, primarily serving customers in the defense and industrial sectors. To date, we have concentrated our operational efforts on researching, developing and commercializing the next generation technology behind our silicon-anode lithium-ion battery cell architecture.
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We commenced commercial manufacturing operations and recognized our first product revenue in the second quarter of 2022 from our first production line (“Fab1”). In 2023, we identified a facility in Malaysia (“Fab2”) for high-volume production.
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Most recently, we launched the AI-1 TM product platform, our Artificial Intelligence Class TM batteries for the next generation of mobile smartphones, smart eyewear and other AI-enabled devices that require significantly higher total energy storage and power to perform AI functions locally.
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We relocated our Fab1 production line to Fab2 in the second quarter of 2024 and officially opened our Fab2 production facility in Malaysia in August 2024. In October 2024, we commenced shipping battery cells from our first production line, the“Agility line” at Fab2.
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We also serve customers in defense and industrial markets through our conventional and silicon-doped graphite battery products across a range of battery sizes and configurations optimized for high discharge rate applications, such as drones, subsea systems, and munitions defense systems.
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As of the end of 2024, we had completed Site Acceptance Testing (“SAT”) for our Agility and High-Volume Manufacturing (“HVM”) lines and delivered samples of our smartphone batteries, EX-1M and EX-2M, to customers. We currently expect to commence mass production at Fab2 in late 2025.
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Drones represent another priority area of focus, as we believe our products provide a strong competitive advantage for serving customers that are increasingly prioritizing higher energy density, extended flight time, and supply-chain diversification.
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Our fiscal years 2024, 2023, and 2022 consisted of 52 weeks, which ended on December 29, 2024, December 31, 2023, and January 1, 2023, respectively. All period references are to the fiscal periods unless otherwise indicated. Routejade Acquisition On October 31, 2023, we completed our acquisition of Routejade, Inc. (“Routejade”), an established battery manufacturer in South Korea.
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Our manufacturing operations are conducted in Malaysia and South Korea, supporting both our next-generation silicon-anode platform and our conventional lithium-ion battery products. We have transitioned our prior U.S. pilot manufacturing activities to Malaysia and continue to focus on manufacturing execution, operational efficiency, and capacity planning to support commercialization efforts.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe do not believe that an immediate 10% increase or decrease in interest rates would have a material effect on the fair value of our cash equivalents.
Biggest changeOur short-term and long-term investments consist of highly liquid fixed-income securities and we do not enter into investments for trading or speculative purposes. Due to the nature of these instruments, we do not believe that an immediate 10% increase or decrease in interest rates would have a material effect on the fair value of our investment portfolio.
Our operations outside of the U.S. are subject to risks typical of operations outside of the U.S. including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility. Our operating results in the international subsidiaries for fiscal year 2024 was not material.
Our operations outside of the U.S. are subject to risks typical of operations outside of the U.S. including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions, and foreign exchange rate volatility. Our operating results in the international subsidiaries for fiscal year 2025 was not material.
Foreign Currency Risk In fiscal year 2024, we conducted operations in the U.S. and Asia. The majority of our expenses, and capital purchasing activities are transacted in U.S. dollars in fiscal year 2024.
Foreign Currency Risk In fiscal year 2025, we conducted operations in the U.S. and Asia. The majority of our expenses, and capital purchasing activities are transacted in U.S. dollars in fiscal year 2025.
If a hypothetical 10% adverse change in foreign currency exchange rate was applied to our monetary assets and liabilities on December 29, 2024, the effect of such change would not be material to our consolidated financial condition or our results of operations.
If a hypothetical 10% adverse change in foreign currency exchange rate was applied to our monetary assets and liabilities on December 28, 2025, the effect of such change would not be material to our consolidated financial condition or our results of operations.
As of December 29, 2024, we had $172.5 million of Convertible Senior Notes with an annual interest rate of 3.0%, which accounted for approximately 94% of our total debt before debt issuance costs, and the other borrowings are mostly with fixed interest rates.
As of December 28, 2025, we had $172.5 million of 2028 Convertible Senior Notes with an annual interest rate of 3.0% and $360.0 million of 2030 Convertible Senior Notes with an annual interest rate of 4.75%, which accounted for approximately 98% of our total debt before debt issuance costs, and the other borrowings are mostly with fixed interest rates.
Quantitative and Qualitative Disclosures About Market Risk We are exposed to a variety of market and other risks, including the effects of changes in interest rates, and foreign currency risk, as well as risks to the availability of funding sources, hazard events, and specific asset risks. 59 Table of Contents Interest Rate Risk The market risk inherent in our financial instruments and financial position represents the potential loss arising from adverse changes in interest rates.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to a variety of market and other risks, including the effects of changes in interest rates, and foreign currency risk, as well as risks to the availability of funding sources, hazard events, and specific asset risks.
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As of December 29, 2024, we had cash, cash equivalents and restricted cash totaling $274.7 million. Our cash, cash equivalents, and restricted cash are held in cash deposits, money market funds and interest bearing account.
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Interest Rate Risk The market risk inherent in our financial instruments and financial position represents the potential loss arising from adverse changes in interest rates. As of December 28, 2025, we had cash, cash equivalents, restricted cash, and short-term investments and long-term investments totaling $620.8 million.
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Our cash, cash equivalents, restricted cash, and investments are held in cash deposits, U.S. government agency securities, U.S. Treasuries, money market mutual funds, and corporate notes and debt securities. The primary objectives of our investment activities are the preservation of capital and the fulfillment of liquidity needs.

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