0001104659-20-123352 8-K 3 20201110 2.02 9.01 20201110 20201110 NETLIST INC 0001282631 3674 954812784 DE 0102 8-K 34 001-33170 201299717 175 TECHNOLOGY DRIVE, SUITE 150 IRVINE CA 92618 949-435-0025 175 TECHNOLOGY DRIVE, SUITE 150 IRVINE CA 92618 8-K 1 tm2035490-1_8k.htm FORM 8-K






Washington, D.C. 20549






Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


November 10, 2020

Date of Report (Date of earliest event reported):







(Exact name of registrant as specified in its charter)


(State or other jurisdiction of
File Number)
(IRS Employer
Identification Number)


175 Technology Drive, Suite 150

Irvine, California 92618
(Address of principal executive offices)


(949) 435-0025

(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act: None


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company o


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o







Item 2.02. Results of Operations and Financial Condition.


On November 10, 2020, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s financial results for the third quarter ended September 26, 2020. A copy of the press release is attached hereto as Exhibit 99.1.


The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.


Item 9.01. Financial Statements and Exhibits.


(d)       Exhibits.


Number   Description
99.1   Press Release of Netlist, Inc., dated November 10, 2020.







Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date:  November 10, 2020 By: /s/ Gail M. Sasaki
    Gail M. Sasaki
    Vice President and Chief Financial Officer





EX-99.1 2 tm2035490d1_ex99-1.htm EXHIBIT 99.1


Exhibit 99.1





IRVINE, CALIFORNIA, November 10, 2020 - Netlist, Inc. (OTCQB: NLST) today reported financial results for the third quarter ended September 26, 2020.


Net sales for the third quarter ended September 26, 2020 were $10.2 million, compared to net sales of $6.1 million for the quarter ended September 28, 2019. Gross profit for the quarter ended September 26, 2020 was $1.3 million, or 13.1% of net sales, compared to a gross profit of $0.5 million, or 7.4% of net sales, for the quarter ended September 28, 2019.


Net loss for the third quarter ended September 26, 2020 was ($2.1) million, or a loss per share of ($0.01), compared to a net loss in the prior year period of ($3.1) million, or a loss per share of ($0.02). These results include stock-based compensation expense of $0.2 million for both of the quarters ended September 26, 2020 and September 28, 2019.


As of September 26, 2020, cash, cash equivalents and restricted cash was $17.5 million, total assets were $28.3 million, working capital was $13.6 million, total debt and accrued interest, net of debt discount, was $20.2 million, and stockholders’ deficit was ($1.2) million.


“We delivered another quarter of positive financial performance with revenue increasing nearly 70% and bottom line improvement of 30% over the year ago period. These gains came from expanded gross margins on higher revenue along with proactive expense management,” said Netlist’s Chief Executive Officer, C.K. Hong. “We also remain active with our intellectual property licensing and enforcement efforts and look forward to resuming the case against Google, and the Markman Hearing in the SK hynix case early next year.”


Conference Call Information


C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, November 10, 2020 at 12:00 p.m. Eastern Time to review Netlist’s results for the third quarter ended September 26, 2020. The live webcast and archived replay of the call can be accessed for 90 days in the Investors section of Netlist’s website at www.netlist.com.


About Netlist


Netlist provides high-performance SSDs and modular memory subsystems to enterprise customers in diverse industries. The Company's NVMe™ SSD portfolio provides industry-leading performance offered in multiple capacities and form factors. HybriDIMM™, Netlist's next-generation storage class memory product, addresses the growing need for real-time analytics in Big Data applications, in-memory databases, high-performance computing and advanced data storage solutions. Netlist also manufactures a line of specialty and legacy memory products to storage customers, appliance customers, system builders and cloud and datacenter customers. Netlist holds a portfolio of patents in the areas of server memory, hybrid memory, storage class memory, rank multiplication and load reduction. To learn more, visit www.netlist.com.





Safe Harbor Statement


This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical facts and often address future events or Netlist's future performance. Forward-looking statements contained in this news release include statements about Netlist's ability to execute on its strategic initiatives. All forward-looking statements reflect management's present expectations regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements. These risks, uncertainties and other factors include, among others: risks related to Netlist's plans for its intellectual property, including its strategies for monetizing, licensing, expanding, and defending its patent portfolio; risks associated with patent infringement litigation initiated by Netlist, such as its ongoing proceedings against SK hynix Inc., or by others against Netlist, as well as the costs and unpredictability of any such litigation; risks associated with Netlist's product sales, including the market and demand for products sold by Netlist and its ability to successfully develop and launch new products that are attractive to the market; the success of product, joint development and licensing partnerships; the competitive landscape of Netlist's industry; and general economic, political and market conditions, including quarantines, factory slowdowns or shutdowns, and travel restrictions resulting from the COVID-19 pandemic. All forward-looking statements reflect management's present assumptions, expectations and beliefs regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements. These and other risks and uncertainties are described in Netlist's annual report on Form 10-K for its most recently completed fiscal year filed on March 10, 2020, and the other filings it makes with the U.S. Securities and Exchange Commission from time to time, including any subsequently filed quarterly and current reports. In light of these risks, uncertainties and other factors, these forward-looking statements should not be relied on as predictions of future events. These forward-looking statements represent Netlist's assumptions, expectations and beliefs only as of the date they are made, and except as required by law, Netlist undertakes no obligation to revise or update any forward-looking statements for any reason.

(Tables Follow)


For more information, please contact:


The Plunkett Group Netlist, Inc.
Mike Smargiassi Gail M. Sasaki
NLST@theplunkettgroup.com Chief Financial Officer
(212) 739-6729 (949) 435-0025





Netlist, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)


   September 26,   December 28, 
   2020   2019 
Current assets:          
Cash and cash equivalents  $14,287   $8,966 
Restricted cash   3,200    2,750 
Accounts receivable, net   4,203    3,672 
Inventories   4,521    3,496 
Prepaid expenses and other current assets   297    627 
Total current assets   26,508    19,511 
Property and equipment, net   199    286 
Operating lease right-of-use assets   218    968 
Other assets   1,377    1,376 
Total assets  $28,302   $22,141 
Current liabilities:          
Accounts payable  $8,053   $9,134 
Revolving line of credit   3,388    2,990 
Accrued payroll and related liabilities   665    740 
Accrued expenses and other current liabilities   454    793 
Current portion of long-term debt and note payable   389    412 
Total current liabilities   12,949    14,069 
Long-term debt   16,426    15,793 
Operating lease liabilities       498 
Other liabilities   111    144 
Total liabilities   29,486    30,504 
Commitments and contingencies          
Stockholders' deficit:          
Preferred stock        
Common stock   195    169 
Additional paid-in capital   191,741    179,086 
Accumulated deficit   (193,120)   (187,618)
Total stockholders' deficit   (1,184)   (8,363)
Total liabilities and stockholders' deficit  $28,302   $22,141 





Netlist, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share amounts)


   Three Months Ended   Nine Months Ended 
   September 26,   September 28,   September 26,   September 28, 
   2020   2019   2020   2019 
Net sales  $10,212   $6,116   $35,749   $16,733 
Cost of sales(1)   8,875    5,666    30,477    15,600 
Gross profit   1,337    450    5,272    1,133 
Operating expenses:                    
Research and development(1)   731    583    2,083    1,738 
Intellectual property legal fees   784    979    2,257    3,567 
Selling, general and administrative(1)   1,816    1,747    5,994    5,724 
Total operating expenses   3,331    3,309    10,334    11,029 
Operating loss   (1,994)   (2,859)   (5,062)   (9,896)
Other expense, net:                    
Interest expense, net   (139)   (245)   (437)   (775)
Other income (expense), net   3    (4)   (2)   (5)
Total other expense, net   (136)   (249)   (439)   (780)
Loss before provision for income taxes   (2,130)   (3,108)   (5,501)   (10,676)
Provision for income taxes           1    1 
Net loss  $(2,130)  $(3,108)  $(5,502)  $(10,677)
Net loss per common share:                    
Basic and diluted  $(0.01)  $(0.02)  $(0.03)  $(0.07)
Weighted-average common shares outstanding:                    
Basic and diluted   192,257    148,058    179,154    142,624 
(1)  Amounts include stock-based compensation expense as follows:                    
Cost of sales  $1   $6   $8   $20 
Research and development   63    67    154    163 
Selling, general and administrative   148    170    420    599 
Total stock-based compensation  $212   $243   $582   $782 



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