0001282631 false NETLIST INC 0001282631 2021-11-02 2021-11-02 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

 

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

 

November 2, 2021

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)

 

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:

 

¨    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 November 2, 2021, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s financial results for the third quarter ended October 2, 2021. 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.

 

Exhibit    
Number   Description
99.1   Press Release of Netlist, Inc., dated November 2, 2021.
104   Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

 

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:  November 2, 2021 By: /s/ Gail M. Sasaki
    Gail M. Sasaki
    Vice President and Chief Financial Officer

 

3

 

Exhibit 99.1

 

Netlist Reports Third Quarter 2021 Results

 

IRVINE, CALIFORNIA, November 2, 2021 - Netlist, Inc. (OTCQB: NLST) today reported financial results for the third quarter ended October 2, 2021.

 

Revenue for the third quarter ended October 2, 2021 was $26.7 million which was up 162% year over year. Net loss for the third quarter ended October 2, 2021 was ($10.7) million, or loss per share of ($0.05), compared to a net loss in the prior year’s period of ($2.1) million, or a loss per share of ($0.01). These results include stock-based compensation expense of $0.4 million for the quarter ended October 2, 2021 and $0.2 million for the quarter ended September 26, 2020.

 

As of October 2, 2021, cash, cash equivalents and restricted cash was $73.2 million, total assets were $98.9 million, working capital was $47.2 million, total debt and accrued interest, net of debt discount, was $21.2 million, and stockholders’ equity was $47.9 million.

 

“Third quarter revenue more than doubled compared to the prior year period, while investments in sales, research and development, and legal activities tempered bottom line results. The recent summary judgement in the case against Samsung was a major victory for Netlist. We look forward to the hearing on November 10th in the case against Google which will address the question of intervening rights,” said Netlist’s Chief Executive Officer, C.K. Hong.

 

Conference Call Information

 

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, November 2, 2021 at 12:00 p.m. Eastern Time to review Netlist’s results for the third quarter 2021. 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. 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, 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 26, 2021, 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
[email protected] Chief Financial Officer
(212) 739-6729 (949) 435-0025

 

 

 

 

Netlist, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
         
   (unaudited)     
   October 2,   January 2, 
   2021   2021 
ASSETS          
Current assets:          
Cash and cash equivalents  $62,282   $13,326 
Restricted cash   10,900    3,200 
Accounts receivable, net   4,758    4,680 
Inventories   19,387    3,198 
Prepaid expenses and other current assets   729    514 
Total current assets   98,056    24,918 
           
Property and equipment, net   425    182 
Operating lease right-of-use assets   165    114 
Other assets   282    58 
Total assets  $98,928   $25,272 
           
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)          
Current liabilities:          
Accounts payable  $28,164   $5,327 
Revolving line of credit   4,487    3,678 
Accrued payroll and related liabilities   1,116    806 
Accrued expenses and other current liabilities   424    777 
Long-term debt due within one year   16,692    17,056 
Total current liabilities   50,883    27,644 
Long-term debt   —    146 
Other liabilities   131    102 
Total liabilities   51,014    27,892 
           
Commitments and contingencies          
           
Stockholders' equity (deficit):          
Preferred stock   —    — 
Common stock   226    195 
Additional paid-in capital   229,523    192,071 
Accumulated deficit   (181,835)   (194,886)
Total stockholders' equity (deficit)   47,914    (2,620)
Total liabilities and stockholders' equity (deficit)  $98,928   $25,272 

 

 

 

 

Netlist, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
                 
   Three Months Ended   Nine Months Ended 
   October 2,   September 26,   October 2,   September 26, 
   2021   2020   2021   2020 
Net product sales  $26,749   $10,212   $66,009   $35,749 
License fee   —    —    40,000    — 
Net sales   26,749    10,212    106,009    35,749 
Cost of sales(1)   24,241    8,875    59,135    30,477 
Gross profit   2,508    1,337    46,874    5,272 
Operating expenses:                    
Research and development(1)   2,038    731    5,222    2,083 
Intellectual property legal fees   8,461    784    14,585    2,257 
Selling, general and administrative(1)   2,590    1,816    7,639    5,994 
Total operating expenses   13,089    3,331    27,446    10,334 
Operating (loss) income   (10,581)   (1,994)   19,428    (5,062)
Other (expense) income, net:                    
Interest expense, net   (125)   (139)   (417)   (437)
Other (expense) income, net   (2)   3    641    (2)
Total other (expense) income, net   (127)   (136)   224    (439)
(Loss) income before provision for income taxes   (10,708)   (2,130)   19,652    (5,501)
Provision for income taxes   —    —    6,601    1 
Net (loss) income  $(10,708)  $(2,130)  $13,051   $(5,502)
                     
(Loss) earnings per share:                    
Basic  $(0.05)  $(0.01)  $0.06   $(0.03)
Diluted  $(0.05)  $(0.01)  $0.06   $(0.03)
Weighted-average common shares outstanding:                    
Basic   224,020    192,257    215,135    179,154 
Diluted   224,020    192,257    235,862    179,154 
                     
(1)  Amounts include stock-based compensation expense as follows:                    
Cost of sales  $2   $1   $9   $8 
Research and development   160    63    438    154 
Selling, general and administrative   283    148    715    420 
Total stock-based compensation  $445   $212   $1,162   $582