EVERSPIN TECHNOLOGIES INC. Material Event - Investor Briefing

This briefing provides a clear, jargon-free summary of a significant development for Everspin Technologies, offering the essential facts you need to know.

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1. The Core Event: Patent Infringement Lawsuit & ITC Complaint

Everspin Technologies faces legal action from Avalanche Technology, Inc. Avalanche claims Everspin's Spin-transfer Torque Magnetoresistive Random Access Memory (ST-MRAM) products infringe on four of Avalanche's U.S. patents. This dual legal challenge unfolds on two fronts:

• A lawsuit filed in the U.S. District Court for the District of Delaware, seeking damages and a court order to stop Everspin from using the technology.
• A complaint lodged with the U.S. International Trade Commission (ITC), which could trigger an investigation and potentially ban the import of the accused ST-MRAM products into the U.S.

2. Timeline of Events

Everspin received official notification of these legal actions on January 28, 2026. The company subsequently reported this material event to the SEC on February 2, 2026.

3. Understanding the Claims and Their Significance

Avalanche Technology alleges Everspin's ST-MRAM products use their patented intellectual property without authorization. In the high-tech memory industry, patents are vital for protecting innovation and market position.

Why this matters: ST-MRAM is a cutting-edge, non-volatile memory technology. It represents a significant and growing portion of Everspin's product portfolio and revenue stream. While the company didn't specify the exact percentage of revenue from ST-MRAM in their filing, it is clearly a core growth driver for the company. Losing the ability to sell these products or being forced to pay substantial royalties could severely impact Everspin's financial performance and future strategy.

It's important to note that this dispute only targets Everspin's ST-MRAM products. Their other product lines, such as Toggle MRAM and Sensor devices, are not involved in these legal proceedings, offering some product diversification.

4. Potential Impact on Everspin and its Stakeholders

This legal challenge introduces considerable risk and uncertainty:

• For Everspin (the Company):
  • Financial Strain: Patent litigation is expensive, with legal fees often reaching millions of dollars. Beyond legal costs, potential damages could be substantial, affecting Everspin's cash reserves, profitability, and overall financial health. At this preliminary stage, the company cannot estimate the potential financial impact of this litigation, including legal costs, potential damages, or the effect on future revenues and profitability.
  • Operational Disruption: Management will likely divert its focus to defending these cases, potentially delaying other strategic initiatives, product development, or market expansion efforts.
  • Product Availability: An adverse ruling, particularly from the ITC, could lead to an injunction or import ban, preventing Everspin from selling its ST-MRAM products in the U.S. market.
• For Customers: Those relying on Everspin's ST-MRAM products might face uncertainty regarding future supply, pricing, or the long-term availability of these critical components.
• For Investors: This news introduces a significant new risk factor. The stock price could experience increased volatility as the market reacts to legal developments. A negative outcome could materially impact Everspin's valuation, earnings per share, and long-term growth prospects. Investors should consider Everspin's current cash position and overall financial resilience to withstand a prolonged and costly legal battle.

5. The Path Forward and Everspin's Defense

Everspin believes it has strong arguments against Avalanche's claims and intends to vigorously defend itself. This signals a commitment to a robust legal defense.

The legal process will unfold on two fronts:

• U.S. District Court: This civil lawsuit could take months to several years to resolve, involving discovery, expert testimony, and potentially a trial. Outcomes could include monetary damages, a permanent injunction, or a finding of non-infringement.
• U.S. International Trade Commission (ITC): The ITC will first decide whether to launch an investigation. If it does, and subsequently finds infringement, it has the power to issue an exclusion order, effectively banning the import of infringing products into the U.S. This process is typically faster than district court litigation, often concluding within 12-18 months.

Everspin's strategy will likely involve challenging the validity of Avalanche's patents, demonstrating non-infringement, or exploring other legal avenues such as settlement or cross-licensing agreements.

6. Key Considerations for Investors

This patent infringement lawsuit and ITC complaint represent a material risk for Everspin Technologies. While the company expresses confidence in its defense, patent litigation is inherently unpredictable.

Investors should:

• Monitor Legal Developments: Keep a close watch on court filings, ITC updates, and any official statements from Everspin regarding the progress of these cases.
• Assess Financial Impact: Consider how potential legal costs, damages, or restrictions on ST-MRAM sales could affect Everspin's future earnings, cash flow, and overall financial stability. Review the company's upcoming quarterly reports for management commentary on the financial implications.
• Evaluate Strategic Implications: Consider how this legal challenge might influence Everspin's long-term product roadmap, competitive positioning, and ability to execute its growth strategy in the MRAM market.
• Understand Risk vs. Reward: Factor this significant uncertainty into your overall assessment of Everspin's investment profile.