0001104659-19-044919 8-K 2 20190808 2.02 9.01 20190808 20190808 NETLIST INC 0001282631 3674 954812784 DE 1228 8-K 34 001-33170 191010208 175 TECHNOLOGY DRIVE, SUITE 150 IRVINE CA 92618 949-435-0025 175 TECHNOLOGY DRIVE, SUITE 150 IRVINE CA 92618 8-K 1 a19-16715_18k.htm 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 

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

 

Date of Report (Date of Earliest Event Reported): August 8, 2019

 

NETLIST, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware
(State or Other Jurisdiction of
Incorporation)

 

001-33170
(Commission
File Number)

 

95-4812784
(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:

 

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

 

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

 

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

 

o            Pre-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:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common stock, par value $0.001 per share

 

NLST

 

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 August 8, 2019  Netlist, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the quarter and six months ended June 29, 2019. The press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein in its entirety.

 

The information included in this Item 2.02 of Current Report on Form 8-K, including the attached 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.

 

Exhibit

 

 

Number

 

Description

 

 

 

99.1

 

Press Release of Netlist, Inc., dated August 8, 2019

 

2


 

SIGNATURE

 

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.

 

 

NETLIST, INC.

 

 

 

 

 

 

Date: August 8, 2019

By:

/s/ Gail M. Sasaki

 

 

Gail M. Sasaki

 

 

Vice President and Chief Financial Officer

 

3


EX-99.1 2 a19-16715_1ex99d1.htm EX-99.1

Exhibit 99.1

 

NETLIST REPORTS SECOND QUARTER 2019 RESULTS

 

IRVINE, CALIFORNIA, August 8, 2019 - Netlist, Inc. (OCTQX: NLST) today reported financial results for the second quarter ended June 29, 2019.

 

Net sales for the second quarter ended June 29, 2019 were $5.5 million, compared to net sales of $8.4 million for the quarter ended June 30, 2018.  Gross profit for the quarter ended June 29, 2019 was $0.4 million, or 7.3% of net sales, compared to a gross profit of $0.5 million, or 5.7% of net sales, for the quarter ended June 30, 2018.

 

GAAP net loss for the second quarter ended June 29, 2019 was ($3.5) million, or a loss per share of ($0.02), compared to a net loss in the prior year period of ($3.4) million, or a loss per share of ($0.04).  These results include stock-based compensation expense of $0.2 million for the quarters ended June 29, 2019 and June 30, 2018.

 

As of June 29, 2019, cash, cash equivalents and restricted cash was $9.5 million, total assets were $17.7 million, working capital was $3.1 million, total debt and accrued interest, net of debt discount, was $19.4 million, and stockholders’ deficit was ($12.1) million.

 

“During the quarter net sales and gross margins improved on a sequential basis,” said Netlist’s Chief Executive Officer, C.K. Hong.  “We signed a memorandum of understanding with a major semiconductor company for the ASIC implementation of the HybriDIMMTM Media Controller.  Finally, we completed the trial against SK hynix at the United States International Trade Commission and look forward to the Initial Determination this fall.”

 

Conference Call Information

 

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, August 8, 2019 at 5:00 p.m. Eastern Time to review Netlist’s results for the second quarter ended June 29, 2019.  The dial-in number for the call is 1-412-317-5443.  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.  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 and provides 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, many seminal, in the areas of 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, including its relationship with Samsung Electronics Co., Ltd.; the competitive landscape of Netlist’s industry; and general economic, political and market conditions.  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 22, 2019, 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/Sharon Oh

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)

 

 

 

(unaudited)

 

 

 

 

 

June 29,

 

December 29,

 

 

 

2019

 

2018

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,432

 

$

14,802

 

Restricted cash

 

2,050

 

1,850

 

Accounts receivable, net

 

2,406

 

2,917

 

Inventories

 

2,294

 

2,946

 

Prepaid expenses and other current assets

 

541

 

677

 

Total current assets

 

14,723

 

23,192

 

 

 

 

 

 

 

Property and equipment, net

 

328

 

279

 

Operating lease right-of-use assets

 

1,267

 

 

Other assets

 

1,393

 

1,394

 

Total assets

 

$

17,711

 

$

24,865

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

8,100

 

$

9,497

 

Revolving line of credit

 

2,060

 

2,293

 

Accrued payroll and related liabilities

 

542

 

604

 

Accrued expenses and other current liabilities

 

797

 

343

 

Note payable

 

127

 

376

 

Total current liabilities

 

11,626

 

13,113

 

Convertible promissory notes and accrued interest, net of debt discounts

 

17,247

 

17,346

 

Operating lease liabilities

 

768

 

 

Other liabilities

 

150

 

78

 

Total liabilities

 

29,791

 

30,537

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

Preferred stock

 

 

 

Common stock

 

142

 

139

 

Additional paid-in capital

 

170,513

 

169,355

 

Accumulated deficit

 

(182,735

)

(175,166

)

Total stockholders’ deficit

 

(12,080

)

(5,672

)

Total liabilities and stockholders’ deficit

 

$

17,711

 

$

24,865

 

 


 

Netlist, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 29,

 

June 30,

 

June 29,

 

June 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

5,512

 

$

8,426

 

$

10,617

 

$

17,305

 

Cost of sales(1)

 

5,108

 

7,944

 

9,934

 

16,444

 

Gross profit

 

404

 

482

 

683

 

861

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development(1)

 

565

 

783

 

1,155

 

1,791

 

Intellectual property legal fees

 

1,093

 

1,388

 

2,588

 

3,599

 

Selling, general and administrative(1)

 

2,004

 

1,585

 

3,977

 

3,276

 

Total operating expenses

 

3,662

 

3,756

 

7,720

 

8,666

 

Operating loss

 

(3,258

)

(3,274

)

(7,037

)

(7,805

)

Other expense, net:

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(258

)

(133

)

(530

)

(280

)

Other expense, net

 

(2

)

(10

)

(1

)

(5

)

Total other expense, net

 

(260

)

(143

)

(531

)

(285

)

Loss before provision for income taxes

 

(3,518

)

(3,417

)

(7,568

)

(8,090

)

Provision for income taxes

 

1

 

 

1

 

 

Net loss

 

$

(3,519

)

$

(3,417

)

$

(7,569

)

$

(8,090

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.02

)

$

(0.04

)

$

(0.05

)

$

(0.09

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

140,773

 

91,685

 

139,906

 

87,073

 

 


(1)  Amounts include stock-based compensation expense as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

$

7

 

$

6

 

$

14

 

$

12

 

Research and development

 

45

 

56

 

96

 

136

 

Selling, general and administrative

 

145

 

111

 

429

 

266

 

Total stock-based compensation

 

$

197

 

$

173

 

$

539

 

$

414