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
March 1, 2021
Date of Report (Date of earliest event reported):
NETLIST, INC.
(Exact name of registrant as specified in
its charter)
Delaware
(State or other jurisdiction of
incorporation)
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001-33170
(Commission
File Number)
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95-4812784
(IRS Employer
Identification Number)
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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:
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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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 ¨
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 March 1, 2021, Netlist, Inc. (the
“Company”) issued a press release announcing the Company’s financial results for the fourth quarter ended January
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.
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.
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NETLIST, INC.
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Date: March 1, 2021
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By:
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/s/ Gail M. Sasaki
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Gail M. Sasaki
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Vice President and Chief Financial Officer
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Exhibit 99.1
Netlist Reports Full Year and Fourth
Quarter 2020 Results
IRVINE, CALIFORNIA, March 1, 2021 -
Netlist, Inc. (OTCQB: NLST) today reported financial results for the full year and the fourth quarter ended January 2, 2021.
Net sales for the full year ended January 2, 2021 were $47.2
million, compared to net sales of $26.1 million for the full year ended December 28, 2019. Gross profit for the full year ended
January 2, 2021 was $6.7 million, or 14.3% of net sales, compared to a gross profit of $2.6 million, or 9.8% of net sales, for
the full year ended December 28, 2019.
Net loss for the full year ended January 2, 2021 was ($7.3)
million, or a loss per share of ($0.04), compared to a net loss in the prior year period of ($12.5) million, or a loss per share
of ($0.08). These results include stock-based compensation expense of $0.8 million and $1.0 million for the years ended January
2, 2021 and December 28, 2019, respectively.
Net sales for the fourth quarter ended January 2, 2021 were
$11.5 million, compared to net sales of $9.4 million for the quarter ended December 28, 2019. Gross profit for the quarter ended
January 2, 2021 was $1.5 million, or 12.7% of net sales, compared to a gross profit of $1.4 million, or 15.3% of net sales, for
the quarter ended December 28, 2019.
Net loss for the fourth quarter ended January 2, 2021 was ($1.8)
million, or a loss per share of ($0.01), compared to a net loss in the prior year period of ($1.8) million, or a loss per share
of ($0.01). These results include stock-based compensation expense of $0.2 million for both of the quarters ended January 2, 2021
and December 28, 2019.
As of January 2, 2021, cash, cash equivalents and restricted
cash was $16.5 million, total assets were $25.3 million, working capital was ($2.7) million, total debt and accrued interest, net
of debt discount, was $20.9 million, and stockholders’ deficit was ($2.6) million.
“During 2020 revenue grew by 81%, gross profit dollars
improved by 162% and operating expenses decreased by 3.5%, resulting in a 42% improvement to the bottom line compared to the prior
year,” said Netlist’s Chief Executive Officer, C.K. Hong. “For 2021 we are well positioned to execute on the
product business and our intellectual property initiatives. We look forward to the resumption of the Google case and the SK hynix
jury trial.”
Conference Call Information
C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief
Financial Officer, will host an investor conference call today, March 1, 2021 at 5:00 p.m. Eastern Time to review Netlist’s
results for the fourth quarter ended January 2, 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. 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:
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The Plunkett Group
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Netlist, Inc.
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Mike Smargiassi
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Gail M. Sasaki
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NLST@theplunkettgroup.com
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Chief Financial Officer
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(212) 739-6729
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(949) 435-0025
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Netlist, Inc. and Subsidiaries
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Condensed Consolidated Balance Sheets
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(in thousands)
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(unaudited)
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January 2,
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December 28,
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2021
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2019
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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13,326
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$
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8,966
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Restricted cash
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3,200
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2,750
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Accounts receivable, net
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4,680
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3,672
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Inventories
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3,198
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3,496
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Prepaid expenses and other current assets
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514
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627
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Total current assets
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24,918
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19,511
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Property and equipment, net
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182
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286
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Operating lease right-of-use assets
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114
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968
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Other assets
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58
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1,376
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Total assets
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$
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25,272
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$
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22,141
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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Current liabilities:
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Accounts payable
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$
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5,327
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$
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9,134
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Revolving line of credit
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3,678
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2,990
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Accrued payroll and related liabilities
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806
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740
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Accrued expenses and other current liabilities
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777
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793
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Long-term debt due within one year
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17,056
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412
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Total current liabilities
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27,644
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14,069
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Long-term debt
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146
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15,793
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Operating lease liabilities
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—
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498
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Other liabilities
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102
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144
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Total liabilities
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27,892
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30,504
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Commitments and contingencies
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Stockholders' deficit:
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Preferred stock
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—
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—
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Common stock
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195
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169
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Additional paid-in capital
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192,071
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179,086
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Accumulated deficit
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(194,886
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)
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(187,618
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)
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Total stockholders' deficit
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(2,620
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)
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(8,363
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)
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Total liabilities and stockholders' deficit
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$
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25,272
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$
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22,141
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Netlist, Inc. and Subsidiaries
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Condensed Consolidated Statements of Operations (Unaudited)
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(in thousands, except per share amounts)
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Three Months Ended
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Year
Ended
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January 2,
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December 28,
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January 2,
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December 28,
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2021
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2019
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2021
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2019
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Net sales
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$
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11,485
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$
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9,370
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$
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47,234
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$
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26,103
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Cost of sales(1)
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10,026
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7,933
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40,503
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23,533
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Gross profit
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1,459
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1,437
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6,731
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2,570
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Operating expenses:
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Research and development(1)
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870
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645
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2,953
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2,383
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Intellectual property legal fees
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111
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564
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2,368
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4,131
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Selling, general and administrative(1)
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2,253
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1,822
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8,247
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7,546
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Total operating expenses
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3,234
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3,031
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13,568
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14,060
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Operating loss
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(1,775
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)
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(1,594
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)
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(6,837
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)
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(11,490
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)
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Other income (expense), net:
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Interest expense, net
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(94
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)
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(170
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)
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(531
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)
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(945
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)
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Other income (expense), net
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103
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1
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101
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(4
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)
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Total other income (expense), net
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9
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(169
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)
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(430
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)
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(949
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)
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Loss before provision for income taxes
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(1,766
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)
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(1,763
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)
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(7,267
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)
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(12,439
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)
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Provision for income taxes
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—
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12
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1
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13
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Net loss
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$
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(1,766
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)
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$
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(1,775
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)
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$
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(7,268
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)
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$
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(12,452
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)
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Net loss per common share:
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|
|
|
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Basic and diluted
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$
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(0.01
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)
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$
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(0.01
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)
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$
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(0.04
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)
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$
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(0.08
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)
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Weighted-average common shares outstanding:
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|
|
|
|
|
|
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|
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|
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Basic and diluted
|
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195,964
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|
|
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164,658
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183,594
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|
|
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148,132
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(1) Amounts include stock-based compensation expense as follows:
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Cost of sales
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$
|
2
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|
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$
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6
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|
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$
|
10
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|
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$
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26
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Research and development
|
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42
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|
|
|
50
|
|
|
|
196
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|
|
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213
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|
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Selling, general and administrative
|
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137
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151
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557
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|
750
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Total stock-based compensation
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$
|
181
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|
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$
|
207
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|
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$
|
763
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$
|
989
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|