Netlist reports third quarter 2024 results

IRVINE, CA / ACCESSWIRE / 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 140% to $40.2 million, compared to $16.7 million in the same quarter a year ago.
Order secured finalizing $303 million in damages to Samsung. The United States District Court for the Eastern District of Texas (EDTX) affirmed the jury verdict and damages in the April 2023 trial, confirming that Samsung willfully infringed Netlist’s patented technologies and that none of the asserted claims is invalid. This concludes the case in the EDTX.
Raised $15 million after quarter end to strengthen Netlist’s balance sheet.

“We continue to make significant progress in defending Netlist’s intellectual property and look forward to the upcoming second jury trial against Samsung in the EDTX,” said Chief Executive Officer, CK 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 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 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 prior year period, 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 ($9.7) million and shareholder deficit ($8.4) million.

Conference calling information
CK Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, October 29, 2024 at 12:00 noon Eastern Time to discuss Netlist’s results for the third quarter ended September 28, 2024 to discuss. webcast and archived replay of the call will be accessible 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’s inventions are fundamental to the advancement of AI, which is revolutionizing computing and enabling businesses and industries to thrive in the digital age. For more information about Netlist, please visit www.netlist.com.

Safe Harbor Statement
This press 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 relate to future events or the future performance of Netlist. Forward-looking statements in this press release include statements regarding Netlist’s ability to execute its strategic initiatives. All forward-looking statements reflect management’s current 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 or implied by forward-looking statements. These risks, uncertainties and other factors include, but are not limited to: the risks that Samsung will appeal the final court ruling, the risks that Micron will appeal the final court ruling, which would cause a lengthy delay could affect Netlist’s ability to award damages or set aside the judgment or reduce damages; is at risk that Netlist will be adversely affected in the ongoing lawsuits with Samsung, Micron or Google or in the 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 lawsuits initiated against Netlist by Netlist or others, as well as the cost and unpredictability of such lawsuits; 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, co-development and licensing partnerships; the competitive landscape of the Netlist industry; and general economic, political and market conditions, including quarantines, slowdowns and/or plant closures. The military conflict between Russia and Ukraine could increase the risk of supply disruptions. All forward-looking statements reflect management’s current 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 forward-looking statements expressed or implied. These and other risks and uncertainties are described in Netlist’s Annual Report on Form 10-K for the most recently completed fiscal year filed on February 23, 2024, and in Netlist’s other filings from time to time with the U.S. Securities and Exchange Commission, including any subsequent quarterly and current reports. In light of these risks, uncertainties and other factors, these forward-looking statements should not be relied upon 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 assumes no obligation to revise or update any forward-looking statements for any reason.

Contacts for Investor Relations:

The Plunkett Group
Mike Smargiassi
[email protected]
(212) 739-6729

Gail M. Sasaki
Netlist, Inc., Chief Financial Officer
[email protected]
(949) 435-0025

NETLIST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands) (Unverified)

	September 28			December 30,
	2024			2023
ASSETS
Current assets:
Cash and cash equivalents	$	17,163		$	40,445
Limited cash		12,600			12,400
Accounts receivable, net		1,660			4,562
Stocks		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 EQUITY (DEFICIT)
Current liabilities:
Debts	$	34,183		$	39,831
Revolving line of credit		1,563			3,844
Accrued wage costs and related obligations		1,352			1,346
Deferred income		5,914			–
Other short-term liabilities		2,645			2,569
Total current liabilities		45,657			47,590
Operating lease obligations		787			1,213
Other obligations		187			237
Total liabilities		46,631			49,040

Obligations and contingencies

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

NETLIST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF ACTIVITIES
(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 turnover	$	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 costs:
Research and development⁽¹⁾		2,177			2,268			6,987			6,824
Legal costs in the field of intellectual property		5,349			12,891			28,403			32,908
Sales, general and administrative⁽¹⁾		3,271			3,160			9,353			9,515
Total operating costs		10,797			18,319			44,743			49,247
Business loss		(9,655	)		(17,879	)		(42,113	)		(48,008	)
Other income, net:
Interest income, net		162			507			796			840
Other income (expenses), 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 dilute	$	(0.04	)	$	(0.07	)	$	(0.16	)	$	(0.20	)
Weighted average outstanding common shares:
Basic and dilute		258,025			247,420			256,509			240,974


⁽¹⁾ The amounts include the following stock-based compensation expenses:

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

SOURCE: Netlist, Inc.

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