Form 8-K - Current report

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

October 29, 2024

Date of Report (Date of earliest event reported):

NETLIST, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-33170	95-4812784
(State or other jurisdiction of	(Commission	(IRS Employer
incorporation)	File Number)	Identification Number)

111 Academy, Suite 100

Irvine, California 92617

(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:

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

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

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

¨ 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 ¨

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. ¨

Item 2.02. Results of Operations and Financial Condition.

On October 29, 2024, Netlist, Inc. issued a press release announcing its financial results for the third quarter ended September 28, 2024. A copy of the press release is furnished as Exhibit 99.1 to this report.

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.

Exhibit
Number		Description
99.1		Press Release of Netlist, Inc., dated October 29, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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: October 29, 2024	By:	/s/ Gail M. Sasaki
		Gail M. Sasaki
		Executive Vice President and Chief Financial Officer

Exhibit 99.1

Netlist Reports Third Quarter 2024 Results

IRVINE, CALIFORNIA, October 29, 2024 - Netlist, Inc. (OTCQB: NLST) today reported financial results for the third quarter ended September 28, 2024.

Recent Highlights:

	·	Net sales for the third quarter of 2024 increased by 140% to $40.2 million compared to $16.7 million from the same quarter one year ago.
	·	Secured order finalizing $303 million damages award against Samsung. The United States District Court for the Eastern District of Texas (EDTX) upheld the jury’s verdict and damages award in the April 2023 trial and confirmed that Samsung willfully infringed Netlist’s patented technologies and that none of the asserted claims are invalid. This brings the case to a close in the EDTX.
	·	Raised $15 million subsequent to the end of the quarter strengthening Netlist’s balance sheet.

“We continue to make significant progress in the defense of Netlist’s intellectual property and look forward to the upcoming second patent infringement jury trial against Samsung in the EDTX,” said Chief Executive Officer, C.K. Hong.

Net sales for the third quarter ended September 28, 2024 were $40.2 million, compared to net sales of $16.7 million for the third quarter ended September 30, 2023. Gross profit for the third quarter ended September 28, 2024 was $1.1 million, compared to a gross profit of $0.4 million for the third quarter ended September 30, 2023.

Net sales for the nine months ended September 28, 2024 were $112.8 million, compared to net sales of $35.8 million for the nine months ended September 30, 2023. Gross profit for the nine months ended September 28, 2024 was $2.6 million, compared to a gross profit of $1.2 million for the nine months ended September 30, 2023.

Net loss for the third quarter ended September 28, 2024 was ($9.4) million, or ($0.04) per share, compared to a net loss of ($17.3) million in the same period of prior year, or ($0.07) per share. These results include stock-based compensation expense of $1.1 million and $1.1 million for the quarters ended September 28, 2024 and September 30, 2023, respectively.

Net loss for the nine months ended September 28, 2024 was ($41.2) million, or ($0.16) per share, compared to a net loss in the prior year period of ($47.2) million, or ($0.20) per share. These results include stock-based compensation expense of $3.6 million and $3.4 million for the nine months ended September 28, 2024 and September 30, 2023, respectively.

As of September 28, 2024, cash, cash equivalents and restricted cash were $29.8 million, total assets were $38.2 million, working capital deficit was ($9.7) million, and stockholders’ deficit was ($8.4) million.

Conference Call Information

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, October 29, 2024 at 12:00 p.m. Eastern Time to review Netlist’s results for the third quarter ended September 28, 2024. 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 is a leading innovator in advanced memory and storage solutions, pushing the boundaries of technology to deliver unparalleled performance and reliability. With a rich portfolio of patented technologies, Netlist inventions are foundational to the advancement of AI which is revolutionizing computing and empowering businesses and industries to thrive in the digital age. To learn more about Netlist, please 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 that Samsung will appeal the final order by the trial court, risks that Micron will appeal the final judgment by the trial court, which could cause a lengthy delay in Netlist’s ability to collect the damage award or overturn the verdict or reduce the damages award; risks that Netlist will suffer adverse outcomes in its pending litigation with Samsung, Micron or Google or in its various other active proceedings to defend the validity of its patents; 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, 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 and/or shutdowns. The military conflict between Russia and Ukraine may increase the likelihood of supply interruptions. 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 February 23, 2024, 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.

Investor Relations Contacts:

Mike Smargiassi
The Plunkett Group
NLST@theplunkettgroup.com
(212) 739-6729

Gail M. Sasaki
Netlist, Inc., Chief Financial Officer
gsasaki@netlist.com
(949) 435-0025

NETLIST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands) (Unaudited)

	September 28,		December 30,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	17,163	$	40,445
Restricted cash		12,600		12,400
Accounts receivable, net		1,660		4,562
Inventories		3,768		12,031
Prepaid expenses and other current assets		813		441
Total current assets		36,004		69,879

Property and equipment, net		605		770
Operating lease right-of-use assets		1,153		1,590
Other assets		473		560
Total assets	$	38,235	$	72,799

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	34,183		$	39,831
Revolving line of credit		1,563			3,844
Accrued payroll and related liabilities		1,352			1,346
Deferred revenue		5,914			—
Other current liabilities		2,645			2,569
Total current liabilities		45,657			47,590
Operating lease liabilities		787			1,213
Other liabilities		187			237
Total liabilities		46,631			49,040

Commitments and contingencies

Stockholders’ equity (deficit):
Preferred stock		—			—
Common stock		259			254
Additional paid-in capital		316,319			307,328
Accumulated deficit		(324,974	)		(283,823	)
Total stockholders’ equity (deficit)		(8,396	)		23,759
Total liabilities and stockholders’ equity (deficit)	$	38,235		$	72,799

NETLIST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts) (Unaudited)

	Three Months Ended						Nine Months Ended
	September 28,			September 30,			September 28,			September 30,
	2024			2023			2024			2023
Net sales	$	40,186		$	16,725		$	112,828		$	35,772
Cost of sales ⁽¹⁾		39,044			16,285			110,198			34,533
Gross profit		1,142			440			2,630			1,239
Operating expenses:
Research and development⁽¹⁾		2,177			2,268			6,987			6,824
Intellectual property legal fees		5,349			12,891			28,403			32,908
Selling, general and administrative⁽¹⁾		3,271			3,160			9,353			9,515
Total operating expenses		10,797			18,319			44,743			49,247
Operating loss		(9,655	)		(17,879	)		(42,113	)		(48,008	)
Other income, net:
Interest income, net		162			507			796			840
Other income (expense), net		88			33			167			14
Total other income, net		250			540			963			854
Loss before provision for income taxes		(9,405	)		(17,339	)		(41,150	)		(47,154	)
Provision for income taxes		—			—			1			1
Net loss	$	(9,405	)	$	(17,339	)	$	(41,151	)	$	(47,155	)

Loss per common share:
Basic and diluted	$	(0.04	)	$	(0.07	)	$	(0.16	)	$	(0.20	)
Weighted-average common shares outstanding:
Basic and diluted		258,025			247,420			256,509			240,974

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

Cost of sales	$	16		$	19		$	82		$	90
Research and development		238			231			798			691
Selling, general and administrative		876			895			2,752			2,637
Total stock-based compensation	$	1,130		$	1,145		$	3,632		$	3,418

Cover	Oct. 29, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 29, 2024
Entity File Number	001-33170
Entity Registrant Name	NETLIST INC
Entity Central Index Key	0001282631
Entity Tax Identification Number	95-4812784
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	111 Academy
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Irvine
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92617
City Area Code	949
Local Phone Number	435-0025
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, par value $0.001 per share
Trading Symbol	NLST
Entity Emerging Growth Company	false